U.S corporations are sitting on some $3 trillion in cash, which some commentators view as an economic mystery. Why aren't they investing that money productively — in factories or in R & D? And would the economy see a positive bump if they did? Michael Faulkender, a professor of finance at the Smith School thinks much of the answer has to do with tax-avoidance strategies. Read more ...
Multinational American companies with significant operations in countries with low corporate taxes take on less debt than companies that face higher taxes, according to a new study from the Smith School. A link between higher corporate taxes and debt levels is predicted by economic theory, but some recent studies have failed to find such a connection. In this new study, however, the authors assume U.S. companies will keep their foreign profits abroad indefinitely. Read more ...
Two massive drug companies, New York-based Pfizer and Dublin-based Allergan (maker of Botox), are discussing a merger that could end up being the biggest in a year of blockbuster combinations. The merger also reignites debate over the corporate tax rate in the U.S., given that Pfizer's CEO has made it clear that a chief goal of the plan is to cut Pfizer's tax rate. Smith School finance professor Michael Faulkender shares insights. Read more...
Can U.S. companies be embarrassed out of paying their CEOs hundreds of times what the average worker makes? The SEC wants to find out. By a 3-2 vote, the agency recently ordered that companies begin disclosing the ratio of their CEO’s pay to that of the median employee. The rule’s backers believe it's indefensible that CEO pay has grown in the last-half century from 50 times what the average worker makes to roughly 300 times, even as middle-class wages have stagnated. Smith School professors Hui Liao and Michael Faulkender have differing viewpoints. Read more...
In this episode of Smith Business Close-Up with the Smith School, host Jeff Salkin sits down with Michael Faulkender to talk about tax reforms.
The fifth anniversary of the landmark Dodd-Frank legislation, Congress's response to the financial crisis of 2007-08, arrives next month, prompting reflections on whether it has done what the Democratic-controlled Congress that passed it intended: Increase transparency and accountability in the banking system and — most importantly — reduce the likelihood of another crisis. Smith School professor Mike Faulkender gives the legislation mixed reviews and offers suggestions for reform. Read more...
September 27, 2012 & September 30, 2012
MEDIA ALERT: May 3, 2011
Business Lessons Could Hold Clues to How Bin Laden’s Death Will Impact Al Qaeda, Economy
UMD’s Smith School of Business Experts Offer Insights
With the 10-year U.S. manhunt for Osama Bin Laden ending in the terrorist leader’s death, the world is watching for the impacts. Lessons from business could hold clues to how the loss of the leader might impact the Al Qaeda organization and the global economic climate.
Professor Paul Tesluk weighs in on how Bin Laden’s death may affect the Al Qaeda organization.
Thursday, Oct. 1, 2009, 7:30 p.m.
Sunday, Oct. 4, 2009, 7:30 a.m.
Monday, Oct. 5, 2009, 4:30 a.m.
Setting CEO Pay – Executive Compensation
Michael Faulkender, associate professor of finance in the University of Maryland's Robert H. Smith School of Business, says companies will find ways around the Department of the Treasury's new measures to deter U.S. firms from relocating headquarters to countries with lower tax rates – the basis of a “corporate inversion.” Instead of focusing on this business strategy, he says, U.S. officials should target and lower the corporate tax rate.