 |
Cathryn
Arnell is the Vice President of Tax
at Yahoo!, Inc. in Sunnyvale, CA.
Prior to joining Yahoo!, Inc. in 2004,
Cathryn provided executive level tax
consulting services for Fortune 500
companies. Preceding Cathryn’s consulting
service was her VP Finance, CFO position
at Iscribe, Inc. in Redwood City,
CA, a medical technology startup company.
Prior to Iscribe, Inc., Cathryn held
several positions at Silicon Graphics,
Inc. in Mountain View, CA, which included
VP, Treasurer, Program Director, Y2K
and Director of Tax. Prior to Silicon
Graphics, Inc., Cathryn was Director
of Tax at The Cooper Companies, Inc.
and was Tax Manager at Peat, Marwick,
Mitchell & Co. Cathryn was also
an
|
Editor
for the monthly publication of the
International VAT Monitor in Amsterdam
Netherlands where she assisted in its creation
and publication. Cathryn received her BS in
Accounting
and Economics from Boston College in Chestnut
Hill, Massachusetts where she graduated as
Valedictorian. She earned her JD from Hastings
College of the Law in San Francisco, CA.
KJ- What perspective can you give me on
Yahoo! in terms of size and growth?
CA- Yahoo! started in 1994 and has grown
to about $5 Billion in revenue. However, the
Tax Department’s work is not driven
by revenue as much as it is by the complexity
and diversity of our business. The company
has grown significantly via acquisitions and,
in fact, doubled in size in 2003 through the
large acquisition of a company called Overture.
KJ- Everyone knows that Yahoo! is a household
name but what is the culture like at Yahoo?
CA- Yahoo! has a great work environment.
It has a very inclusive and rational business
environment. If you present your case well
for a certain investment or have a need for
more resources, management will listen to
and respect you. Jerry Yang, our CEO, is very
approachable and extremely smart. You can
email him and he will actually email back
to you! The other co- founder is David Filo;
the engineering community loves him. These
two men have a passion for the company and
a passionate vision of where the Internet
is going.
From a tax perspective, it is a really fun
place to work because we are on the cutting
edge of tax. The tax laws were not written
with Cyberspace in mind so we are in the position
of interpreting the tax laws. In a way, we
are helping to develop new tax laws as they
evolve with the industry; this is what makes
our jobs so fun.
KJ- You mention that setting up processes
are important! What advice would you give
a Tax Director on how to set up processes?
CA- When I joined Yahoo! in 2004 it was,
to some extent, a $3 Billion dollar start-up.
It was still a very young company and it was
fun to come in as a seasoned tax professional
and put new processes in place.
SOX Compliance has forced a lot of process
on companies, but I was a strong believer
in process even before the SOX legislation.
Unfortunately, process isn’t necessarily
the most interesting work from a tax perspective.
However, it makes your tax life much easier
when you have processes in place and everyone
knows what their roles are in every single
transaction. In order to put processes in
place, you need to have the proper resources
– in general, start-ups don’t
have sufficient resources to focus on processes
because they are so busy growing the business
itself.
In the current environment, a Tax Director’s
first priority should be developing and documenting
his or her tax provision processes. There
is so much focus today on provisions and financial
statement accuracy, and it is such a high
risk area for the tax department. It doesn’t
take a very large mistake for tax to have
either a significant deficiency or a material
weakness.
I believe that another important process is
to internally set team goals or areas of focus
and monitor progress towards these goals throughout
the year, i.e., management by objective. Tax
tends to be a very regulated, detailed area
of expertise, and it is easy to get distracted
by the day- to-day minutiae of issues that
you face. Maintaining focus on your key objectives
assures that you will add value to the company
on a broader scale. The process should incorporate
a means of communicating your progress and
achievements up and across the organization.
One issue we’ve faced in setting and
achieving our objectives is the impact of
operating in a highly dynamic environment.
So rather than setting specific objectives,
we identify key areas of focus, with underlying
tactical objectives, the target dates or even
results of which we review and adjusted regularly
as the business environment changes.
Yahoo! transacts a high volume of mergers
and acquisitions, investments, joint ventures,
business development deals, and commercial
deals. The Tax department of any company with
this orientation needs processes to ensure
that they have the proper information to analyze
and document the tax impact of the company’s
transactions. It is important for the team
to know: Who are the key drivers of the deal?
What information is readily available? How
do you measure the tax issues involved? How
do you escalate issues and ensure they receive
executive visibility when material? Fortunately,
Yahoo! already had a very good centralized
process for its transactions in place when
I came on board and we’ve continued
to utilize and improve this process since
such time.
Lastly, as a company operating globally, Yahoo!
has had to develop and document its transfer
pricing policies. SOX and tax legislation
have both helped to force processes upon us
in this regard. In particular, SOX has helped
engage the controllership and legal departments
to monitor the implementation of our transfer
pricing.
KJ- Do you see any trends from a futuristic
standpoint?
CA- The one thing about the Internet industry
is that it is still so young, it is almost
impossible to trend and is always full of
surprises. There is so much changing day-by-day;
for example, who would have known that social
networking would have changed and grown so
rapidly? It truly makes for an exciting ride.
KJ- Cathryn, thank you for the time you gave us to answer our questions. Your perspective is valuable to the Tax Intelligence Report readers around the world. We genuinely appreciate the time you gave to share your experience.
Kathleen Jennings (KJ)
Editor, The Tax Intelligence Report
Kathleen@etsearch.com
If you would like an introduction to Yahoo!, Inc. or if you would like to send a private email to Cathryn, please contact Kathleen Jennings at Kathleen@etsearch.com.
|
