The High Value Of Corporate Tax Executives

Having the opportunity to work with thousands of corporate tax executives over three decades has provided insightful information many people are unaware of in running a corporate tax function. There are three topics that will be discussed in this article that are important to know. A corporate tax executive may not have the opportunity to communicate this information to top management teams. However, it is important to know this information and what we are privately hearing from corporate tax executives.

Lead tax executives are under more pressure in running a corporate tax function than ever before in history. With multiple tax revenue authorities increasing their activity investigating corporations today to generate revenue, corporate tax organizations are experiencing an increase in audit activity from Federal, State, and Foreign tax revenue authorities. As a result, corporate tax executives have a heavier workload as they manage increased risk for corporate organizations. While many corporate executive teams are searching for ways to cut costs, the tax department needs an increase in its budget to support their growing workload. Note To CFOs and Human Resource EXecutives: Ask your Tax Executives what they need to be more successful for your organization? Then give them the financial support they need.

Over the previous two years, we have experienced the highest amount of turnover in corporate tax departments we have seen in decades. Allow me to share a truth with you most corporate executive teams are unaware of. The impetus of the great exodus and early retirements in the tax profession has a lot to do with the complexity of the tax executive workload. Tax work is a high risk job, demands substantial technical knowledge, has greater complexity nationally and internationally, and many tax organizations are working with understaffed tax teams with an increase in workload. Tax Executives will not tell you they do not know the answer to all your technical questions. However, they know how to find the answers from selected industry experts. Therefor, give them the budgets they need to access industry specialty experts. It is technically very complicated in the world of tax! A tax executives technical knowledge is as sophisticated as a pilot driving a jumbo jet! We are talking about a highly trained and educated group of tax professionals.

Another factor affecting corporate tax organizations today is the difficulty finding staff for their tax departments. In the year 2020, public accounting firms were not hiring staff level tax professionals. The staff who were fortunate enough to be hired were working from home with little mentorship available to them while working alone from home. The pandemic had a devastating effect on training in your children’s schools; it also had an impact on training tax staff. I have personally spoken with corporate tax executives who have looked for over a year for qualified tax staff. Many tax departments are hurting for tax staff support. My recommendation is for corporations to hire and train tax staff themselves as interns and rotate the staff among their tax team so tax staff receive more exposure to how a corporate tax department operates over multiple tax jurisdictions.

The Big Four are burning out their tax staff as many leave due to the stress of extraordinary overtime demands on them in these firms. Unfortunately, the experience has motivated many tax staff to leave the tax profession altogether at the three to five year level. This contributes to the lack of available trained tax staff talent for hire today. In the old days, you knew if a tax staff was trained by Arthur Andersen (who ceased operations August 31, 2002 from the Enron debacle), the tax staff went through a rigorous training program. Nowadays, you put tax staff on zoom call in front of a computer and hope they understand the highly technical concepts.

Another issue privately discussed with tax executives that corporate management teams are likely unaware is the increasing demand of technical expertise required by tax executives today. Tax legislation is changing rapidly across multiple tax jurisdictions. The changes are evolving at a pace impossible for any human to keep up with and take time to identify, assess, and select the best solution for the company. I would certainly not leave the solutions to A.I. as it would likely be favorable to tax revenue authorities. There are often several ways tax planning can be utilized so it is best to have the experience of a tax expert who also understands the issues and corporate business objectives. Give your competent tax executive the support and the budget they need to get the job done properly.

Companies need to understand that many organizations make mistakes which cause them to lose great tax talent. Tax Executives are very valuable to corporations today as they save companies enormous amounts of tax revenue that would otherwise be lost forever. One situation I often see is human resources making the mistake of thinking tax salaries and accounting, and finance salaries are in the same pay range. This is not the case as companies often find out when making offers to new tax executive hires. It is a very sensitive subject and best handled in the hands of a professional who has deep knowledge of the subject matter about tax compensation. Having placed more than one thousand tax executives over three decades and negotiated some of the largest tax executive compensation packages in the tax profession, I know how to help companies get the talent they need that will save companies millions (and sometimes billions in tax revenue over a ten-year period just on the way they structure their IP). Technically talented tax executives are one of the most valuable assets a company has these days. Treat your tax executives with the respect they deserve by supporting them with what they need.

Do you have a need for a tax executive currently or anticipate a need in the future? As an internationally proven expert in completing multiple tax executive searches for corporate clients, please be comfortable contacting me with your questions or needs: https://www.taxconnections.com/tax-executive-search-services

Contact kat@taxconnections.com or call 858.999.0053 or text 858.232.4415. Available to speak with you 7 days a week. Call me if you have questions on tax compensation.

Contact me if you would like to participate in our year end 2023 private corporate tax compensation study.

A CFOs Courage To Hire: Building A Strong Internal Corporate Tax Team Versus Outsourcing A Tax Function

Watching the constant movement of CFOs in multinational organizations over three decades, it is a fact these executives are constantly tested with the decisions they make for companies. What I will share with you in this article are patterns that have occurred again and again as CFOs make decisions on building a strong inhouse tax organization or outsourcing the tax function. The purpose of this article is to share valuable insight learned from the many experienced CFOs and Tax Executives I have had private discussions with over the years. The goal is to educate corporate executives by learning from those who navigated challenging markets before them.

Foresight is a very valuable tool because it provides lessons learned from hindsight. The examples provided in this article are the lessons I learned from numerous experienced CFOs and Lead Tax Executives as they navigated challenging times. What qualifications do I have to share this knowledge with you? View our accomplishments along with our great team at this link: View Our Clients Here.

Historically, since the 1930s there have been 14 recessions but for the sake of this article my discussion involves what I learned working through the last four recessions with CFOs and Lead Tax Executives. Here are the four markets our team worked through over the years, and in all these times we had to adapt to succeed.

The Gulf War Recession (July 1990 – March 1991)This was a result of the Gulf War and its effect on oil prices and the savings and loan crisis. It also greatly impacted small local banks and put many of them out of business due to rising interest rates in response to growing inflation.

The Dot Com Recession (March 2001 – November 200) This recession occurred when tech IPOs and stock prices became grossly overvalued. The recession started when the stock prices of internet companies crashed as the Fed began raising interest rates in 2000.

The Great Recession 2008 (December 2007 – June 2009) This recession was triggered by the subprime mortgage crisis and the collapse of the U.S. housing bubble. In 2007, subprime lenders were filing bankruptcy due to bundled bad mortgages loaded with borrowers unable to repay. Major financial firms went bankrupt, the stock market fell which triggered a global recession.

The Covid – 19 Recession (February – April 2020) is when more than 24 million people lost their jobs in the U.S. The stay-at-home orders by the government had an impact on businesses that is greater than any previous one. Tax and financial teams ahead of the curve on the adoption of software and technology were able to adapt and rebound more easily.

What We Learned From Our Private Conversations With CFOs and Tax Executives
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Tax Jobs And Hiring Tax Professionals: What You Need To Know Now!

While talking to numerous hiring professionals this week, I want to share happy hiring stories with you. Although the public accounting firms are known to trim staffs after tax season, many are looking at what they can do to keep their tax professionals in place. They will look at who they can retire early first and then they are trimming salaries across the board. However, the tax professionals may have a different experience on salaries since there are not enough of them available to meet the demand. You can be guaranteed the demand will rise as a result of all the stimulus legislation and economic impact payments coming out of Washington D.C. Additionally, governments around the world are now making changes to their tax laws. Tax professionals are in for a very strong future in the profession. Tax experts with the experience of the Tax Reform Act under President Reagan in 1986 and the Tax Cuts And Jobs under President Trump in 2017 know what is coming. The future is big business in the tax profession.

My executive search clients are calling to share behind the scenes stories occurring right now for tax professionals. A client I have in San Francisco, CA has four openings we have been retained to fill. There was a fifth but this Tax Manager starts from Monday at home. When the stay at home initiative is lifted they will work from the office. Here is what the client did during the pandemic. First, they assured all employees their jobs were safe; they shipped all employees a company computer to their home; they sent all employees a check for $500 to cover any internet connection upgrade costs required from their homes; they then gave them an extra $100 for their favorite charity. They consistently do so much more for their employees. If anyone has 2-10 years of experience with family offices, partnerships or investment groups contact me now as I will let you know if you have the tax qualifications to join this extraordinary corporate team.
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Kat Jennings, TaxConnections CEO

Over the years, I have called my biggest competitor in tax executive search on occasion. We are both well-known as two of the most experienced tax recruiters for multinational corporations, law firms and accounting firms (probably in the world). We recently discussed the years of experience we have in searching for tax executives for our multinational clients. Our competitiveness disappeared long ago into a mutual respect and admiration for each other with the challenges we faced working on tax executive searches that are some of the toughest encountered.

For the unknowing beginner, it takes years to build the skills required to represent multinational corporate clients. We understand search for tax executives involves a lot of very hard work. You do not just go into your files to find a candidate for a client. The work involves helping clients build a job description that attracts the right candidates, extensive research of tax candidates in the industry, thousands of emails, hundreds of phone, working nights and weekends; it is seven days a week. You need to know what you are talking about when you interview tax executives. They are highly educated and very strategic thinkers. The bottom line is it takes years to acquire the level of expertise a highly skilled tax executive search expert brings to company. It is truly the art of search for tax executives that you learn over many years to master.

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Kat Jennings, Tax Executive Search Expert

According to a report issued by BNA, corporate tax departments are evolving into higher risk environments. A majority of corporate tax executives surveyed said that tracking the legislative changes is one of the biggest challenges they face this year; in addition to the burden of compliance and the challenges of implementing technology and automated tax systems. On top of all of these current challenges are the difficulties companies experience in hiring and retaining technically qualified tax professionals to complete work timely to meet tax deadlines. While corporate management teams continue to place more pressure on tax leadership, something has to give in this type of business environment. It is imperative C-suite executives provide tax leadership with what they need to mitigate the increased risks facing companies today.

Here is what management can do to support tax executives working in this very high risk environment.

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Kat Jennings - Hiring Tax Executives Over 55

According to the United States Department of Labor, the “U.S. is undergoing a demographic shift that is changing older Americans’ relationship in the workplace. The average and median age of the U.S. population is rising, and the composition of the workforce with it. By 2020, it is estimated that workers 55 and over will make up 25% of the U.S. civilian labor force, up from 13% in 2000.

In addition, individual workers are tending to remain in the workforce longer and retire later. The number of workers over the traditional retirement age of 65 is seeing a marked increase, and it is projected that they will make up even more of the American labor force by 2020. Employers rate older workers high on characteristics such as judgment, commitment to quality, attendance, and punctuality.” Smart companies have increased the interviewing and hiring of tax executives over 55 and it is a movement on the rise.

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