By Rick Gould, CPA, JD
It has been a little over two months since the start of the “Occupy Wall Street” movement. In that period, the protests have spread from a local origin on Wall Street to a nationwide show of dissent. Billed as “A Day of Action”, 5,000 protesters marched into Foley Square in NYC as similar protests took place in Chicago, Boston, DC, Berkely, LA, Portland, Las Vegas, Philadelphia, Dallas and other major cities.
New York City mayor Michael Bloomberg’s decision to raid Zuccotti Park at 1A.M. last Tuesday morning was, in my opinion, both inevitable and correct. The safety implications, the tents, the garbage, the lack of toilets, the sleeping bags, the loud chanting and the drum circles in the park made his order a necessity.
I live, work and breathe in this New York City-world of mergers and acquisitions and investment banking. I fully understand public frustration with the many inexplicable abuses on Wall Street. My stomach churns and fists clench at the thought of all the pain and suffering that the abuses of Bernie Madoff, Sylandra, MF Global and other Wall Street greed has inflicted. It is blatantly obvious: we need better controls.
Strip away the drama and it is clear: we need to get people unemployed back to work. We need to curtail the big bonuses given to Wall Street fat cats when they have led their companies to large losses and/or bankruptcy.
However, I don’t agree with the methods being used by the protesters. Tearing down barriers, torching cars, theft, storefront window-bashing, blocking subways and office buildings, and organizing riots… these will never get the protesters what they want. The patience of residents, business people, store owners, NYPD and the Mayor’s office has worn thin.
The protesters need to do a sanity check on their goals, the results desired and how they will get there. What they truly need is a quality PR firm to guide them in communicating their message.
The goal of the protesters seems to be to inconvenience the millions of people trying to get to work, to school, or to the colleges in the area. The protesters feel they themselves are the “exploited masses”. But those that the protesters are ultimately hurting are the hard-working middle class, the 99%- NOT the 1% they claim to be so angry at. This is a misdirected rage that is counterproductive and will not inspire support for the creation and redistribution of wealth they seem to be championing.
The protesters should be targeting the following as their causes: corporate greed, big bankers, home foreclosures and the 9-20% unemployment rate (depending on method of calculation and geography). Pointing out specific problems and proposing exact solutions may lead to actual reform and legislation and the advancement of their cause. Anger, violence and the deprivation of others’ rights will not. Be careful: the world is watching.
Tuesday, November 29, 2011
Monday, August 1, 2011
Review of Billing Rates Should be an Ongoing Process
By Rick Gould, CPA, JD
Our 2011 Billing Rates & Utilization survey clearly showed that firms are focusing on raising rates. Billing rates are now averaging $513 per hour for CEO’s of agencies with $25 million or more in revenues, and $291 among smaller agencies, Agency VP’s average $261, with the highest among Washington DC agencies averaging $306 and SVP’s $356. I believe this uniform spike in billing rates is indicative of a marginally improved economy and is consistent with growth of the industry in both net revenues and operating profit.
Productivity, measured by billable time utilization has been far below optimal levels. Senior VP’s are billing out only 63% of their theoretical yearly capacity of 1700 hours. And while some rank and file account managers are averaging as high as 99%, some are averaging as low as 70%. The goal for account executives should be at least 90%, a goal reached by almost all firms achieving 20% profitability.
For our full report please email me at rgould@stevensgouldpincus.com
Our 2011 Billing Rates & Utilization survey clearly showed that firms are focusing on raising rates. Billing rates are now averaging $513 per hour for CEO’s of agencies with $25 million or more in revenues, and $291 among smaller agencies, Agency VP’s average $261, with the highest among Washington DC agencies averaging $306 and SVP’s $356. I believe this uniform spike in billing rates is indicative of a marginally improved economy and is consistent with growth of the industry in both net revenues and operating profit.
Productivity, measured by billable time utilization has been far below optimal levels. Senior VP’s are billing out only 63% of their theoretical yearly capacity of 1700 hours. And while some rank and file account managers are averaging as high as 99%, some are averaging as low as 70%. The goal for account executives should be at least 90%, a goal reached by almost all firms achieving 20% profitability.
For our full report please email me at rgould@stevensgouldpincus.com
Friday, May 27, 2011
The Myth of the CEO President (of the U.S.)
By Rick Gould, CPA, JD
It was not surprising to learn this week that Donald Trump finally decided not to run for president. I, for one, never expected him to run; too much to lose, too little to gain.
I respect and admire The Donald for his entrepreneurial energy and his razor-sharp ability. Thinking big and turning adversity into business triumphs are his strong suit. He has created a brand second to none. The legacy of his name is a cash-cow. His buildings are among the highest quality. He has done much for New York City. He is a creator, an innovator, a true visionary. The list goes on.
I am happy for him to continue in this role, as well as in his very lucrative prime-time role in “The Apprentice” and “Celebrity Apprentice”. (Yes, I’m a viewer.) However, his idea of a CEO President, in my view, is a dream. A myth. Far from reality. Let me explain.
His concept is fueled by wealth, power and, yes, a very large ego. It is further fueled by those who support him and by people who want to identify with him, and with the buzz. With the glamour and excitement. These things are subordinate to what a successful president really needs to be focused on. Does The Donald, or any other high-profile CEO, really have the humility to put this aside in fulfilling the job description of U.S. President?
Many dynamic and successful corporate CEO’s dream of ascending to high political office. In addition to Mr. Trump, there is Mitt Romney - a founder of Bain Capital in Boston (for President), Carly Fiorina - former CEO of Hewlett Packard (for Senator of California), and Meg Whitman - former CEO of E-Bay (for Governor of California) to name just a few. But can these CEO’s and former CEO’s withstand the media and public scrutiny that comes with the territory of running for elected office? Can they handle the requisite financial disclosure, the dirty laundry and skeletons in the closet being aired? The divorces and love-children playing out in the media? The incredible number of political surprises and resignations from candidates and elected officials of the past few years shows running for any office a challenge, one that is well beyond an accumulation of votes. The possibility of being smeared by the media, right or wrong, true or untrue, always exists.
I, being a product of the business world, wonder if these successful CEO’s can truly run the country as well as their own companies. Would they be as effective as a CEO President as they are as Chief Executive? It takes extremely different skill sets to run a country. In addition to their charisma, which they all seem to have, being President requires diplomacy and the ability to inspire and engage people of all walks of life... both friends and enemies. The Chief Executive is not accountable to voters, only to his/her board of directors and investment bankers. The President is accountable to his/her cabinet, to congress, to special interest groups… and ultimately to the voters.
Few American Presidents have the background, experience and ability to run a large Fortune 500 company. And even fewer CEO’s have what it takes to handle the realm of personal exposure a presidency brings. Those who believe that our country can be run like a corporation and by a corporate Chief Executive are in for a long wait. I doubt if it will ever happen.
It was not surprising to learn this week that Donald Trump finally decided not to run for president. I, for one, never expected him to run; too much to lose, too little to gain.
I respect and admire The Donald for his entrepreneurial energy and his razor-sharp ability. Thinking big and turning adversity into business triumphs are his strong suit. He has created a brand second to none. The legacy of his name is a cash-cow. His buildings are among the highest quality. He has done much for New York City. He is a creator, an innovator, a true visionary. The list goes on.
I am happy for him to continue in this role, as well as in his very lucrative prime-time role in “The Apprentice” and “Celebrity Apprentice”. (Yes, I’m a viewer.) However, his idea of a CEO President, in my view, is a dream. A myth. Far from reality. Let me explain.
His concept is fueled by wealth, power and, yes, a very large ego. It is further fueled by those who support him and by people who want to identify with him, and with the buzz. With the glamour and excitement. These things are subordinate to what a successful president really needs to be focused on. Does The Donald, or any other high-profile CEO, really have the humility to put this aside in fulfilling the job description of U.S. President?
Many dynamic and successful corporate CEO’s dream of ascending to high political office. In addition to Mr. Trump, there is Mitt Romney - a founder of Bain Capital in Boston (for President), Carly Fiorina - former CEO of Hewlett Packard (for Senator of California), and Meg Whitman - former CEO of E-Bay (for Governor of California) to name just a few. But can these CEO’s and former CEO’s withstand the media and public scrutiny that comes with the territory of running for elected office? Can they handle the requisite financial disclosure, the dirty laundry and skeletons in the closet being aired? The divorces and love-children playing out in the media? The incredible number of political surprises and resignations from candidates and elected officials of the past few years shows running for any office a challenge, one that is well beyond an accumulation of votes. The possibility of being smeared by the media, right or wrong, true or untrue, always exists.
I, being a product of the business world, wonder if these successful CEO’s can truly run the country as well as their own companies. Would they be as effective as a CEO President as they are as Chief Executive? It takes extremely different skill sets to run a country. In addition to their charisma, which they all seem to have, being President requires diplomacy and the ability to inspire and engage people of all walks of life... both friends and enemies. The Chief Executive is not accountable to voters, only to his/her board of directors and investment bankers. The President is accountable to his/her cabinet, to congress, to special interest groups… and ultimately to the voters.
Few American Presidents have the background, experience and ability to run a large Fortune 500 company. And even fewer CEO’s have what it takes to handle the realm of personal exposure a presidency brings. Those who believe that our country can be run like a corporation and by a corporate Chief Executive are in for a long wait. I doubt if it will ever happen.
Saturday, January 1, 2011
Financial Injustice
By Rick Gould, CPA, JD
The Securities & Exchange Commission and the Financial Industry Regulatory Authority (FINRA) have imposed massive changes, licensing requirements and continuing education accountabilities on financial industry professionals.
What amazes me, though, is how little has been accomplished by the Justice Department in prosecuting those guilty of corporate abuses for personal gain since the debacles of Enron, Worldcom, Tyco and others of the early part of this decade. Only a select few have gone to prison.
Are today’s cases more complex than Enron or Worldcom or Tycos? And we were successful in convicting Enron’s Ken Lay, Chairman, Jeff Skilling, CEO and Andrew Fastow, CFO? We convicted Bernie Ebbers, CEO of Worldcom and Dennis Kozlowski, CEO of Tycos. All are serving prison terms, other than Mr. Lay whose premature death, before sentencing precluded the humiliation of prison.
And Bernie Madoff got his rightful fate, a 150 year sentence, after turning upside down the lives and financial stability of thousands of hardworking individuals. The bankruptcy trustee, Irving Picard, is committed to recovering, via “Clawback”, the financial gain of many feeder firms for Madoff, as well as Madoff relatives, employees, his CPA and others who gained from this debacle.
Now the Justice Department, led by Attorney General Eric Holder, is increasing major efforts against “Insider Trading” abuses. Public company executives, hedge fund partners and managers are all subject to criminal investigations.
I ask where are the investigations and prosecution to those responsible for the financial crisis that caused the worst recession since the great depression?
What about those from Lehman, Bear Sterns, Merril Lynch, Citigroup, AIG or the many mortgage companies that participated and benefited from the Sub-Prime Meltdown? The settlement with Countrywide’s Angelo Mazilo was a joke in relation to how he personally benefited. And why, if the team is as high quality as professed, is it taking so long?
Why aren’t those executives that are responsible for the mess created being held accountable? Why are they embellishing the position that corporate crime pays?
Isn’t corporate fraud as serious a crime as theft or robbery of a store or a home or a business?
The financial crisis of the past few years needs to result in more prison terms, more very heavy fines, more accountability to restore the trust and confidence of the American public. Throwing the book at those responsible will further that vote of confidence in support of the SEC, FINRA and our Justice Department.
The Securities & Exchange Commission and the Financial Industry Regulatory Authority (FINRA) have imposed massive changes, licensing requirements and continuing education accountabilities on financial industry professionals.
What amazes me, though, is how little has been accomplished by the Justice Department in prosecuting those guilty of corporate abuses for personal gain since the debacles of Enron, Worldcom, Tyco and others of the early part of this decade. Only a select few have gone to prison.
Are today’s cases more complex than Enron or Worldcom or Tycos? And we were successful in convicting Enron’s Ken Lay, Chairman, Jeff Skilling, CEO and Andrew Fastow, CFO? We convicted Bernie Ebbers, CEO of Worldcom and Dennis Kozlowski, CEO of Tycos. All are serving prison terms, other than Mr. Lay whose premature death, before sentencing precluded the humiliation of prison.
And Bernie Madoff got his rightful fate, a 150 year sentence, after turning upside down the lives and financial stability of thousands of hardworking individuals. The bankruptcy trustee, Irving Picard, is committed to recovering, via “Clawback”, the financial gain of many feeder firms for Madoff, as well as Madoff relatives, employees, his CPA and others who gained from this debacle.
Now the Justice Department, led by Attorney General Eric Holder, is increasing major efforts against “Insider Trading” abuses. Public company executives, hedge fund partners and managers are all subject to criminal investigations.
I ask where are the investigations and prosecution to those responsible for the financial crisis that caused the worst recession since the great depression?
What about those from Lehman, Bear Sterns, Merril Lynch, Citigroup, AIG or the many mortgage companies that participated and benefited from the Sub-Prime Meltdown? The settlement with Countrywide’s Angelo Mazilo was a joke in relation to how he personally benefited. And why, if the team is as high quality as professed, is it taking so long?
Why aren’t those executives that are responsible for the mess created being held accountable? Why are they embellishing the position that corporate crime pays?
Isn’t corporate fraud as serious a crime as theft or robbery of a store or a home or a business?
The financial crisis of the past few years needs to result in more prison terms, more very heavy fines, more accountability to restore the trust and confidence of the American public. Throwing the book at those responsible will further that vote of confidence in support of the SEC, FINRA and our Justice Department.
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