Good morning. The corporate tax provisions of the Tax Cuts and Jobs Act (TCJA) are set to expire this year. And Pascal Desroches, AT&T’s CFO and senior executive vice president, says that’s a cause for concern.
President Trump will need to extend the provisions in of the TCJA, the signature tax law of his first term, by the end of 2025. If the law expires, it will mean changes to the corporate tax rate, capital expensing, the pass-through income deduction, and international taxation. Notably, it would bring an end to the TCJA’s corporate income tax reduction, which dropped rates from 35% to 21%. It also capped deductions for state and local taxes at $10,000, doubled standard deductions, and expanded the child tax credit, according to Bloomberg Government.
“When the first Trump administration passed the tax incentives in 2017, it was really successful in stimulating investment,” Desroches said in a fireside chat during the Barclays Communications and Content Symposium on Tuesday.
“You look at our company, we were at record levels of investment in the last several years, in part funded by the tax benefits,” he said. “We added jobs, both nationally and in individual states. So it was a good thing for the American public.”
Desroches added: “I’m hopeful, based on all of the discussions, that we will see an extension of those tax cuts.”
If it’s extended, you will see AT&T invest more, he said. “It will be a combination of both incremental investments and augmentation of shareholder returns,” he commented. “So we’ll see how that plays out.”
John Stankey, CEO of AT&T (No. 32 in Fortune 500) was vocal about TCJA during the company’s Q4 2024 earnings call on Jan. 27.
“I’m hopeful and I’m optimistic that a Washington that has one party in control can figure out how to set priorities for themselves,” Stankey said regarding TCJA. “My indications would be that from an economic growth perspective, the Republicans believe this is a key driver of what will get the economy moving in the right direction.”
There’s been some pushback from lawmakers on fully extending the expiring tax provisions TCJA due to the cost. Permanently extending the TCJA would increase primary deficits by $4 trillion over the next decade, according to the Penn Wharton Budget model.
The extension of the TCJA is a “positive driver” that companies of all sizes are using to determine future planning, according to Dan Ujczo, a senior counsel in the business law firm Thompson Hine LLP. “While it is a major data point, it is only part of the overall matrix each company is using to evaluate the potential growth from regulatory reform, unleashing the supplies of domestic resources, and potentially offsetting the costs of tariffs,” he told me.
However, there are several moving parts to the president’s economic strategy that need to fall in place with precise timing, Ujczo said.
“Tariffs without TCJA and regulatory reform will harm the economy and not assist companies and that timing is all in Congress’ hands,” he said.
Have a good weekend. See you on Monday.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Fortune 500 Power Moves
Jamie Miller, EVP and CFO of PayPal (No. 145) was named to the expanded role of chief financial and operating officer, according to a Feb. 25 regulatory filing. Miller joined PayPal in 2023.
Ahmed Moghal was promoted to CFO of Baker Hughes Company (No. 161), effective Feb. 24. Moghal most recently served as CFO of the industrial and energy technology business. He succeeds Nancy Buese, who, “by mutual agreement with the company,” ceased to serve as CFO, effective Feb. 24. Buese held the CFO role since late 2022 and will become an adviser to the company before departing on April 30.
Kent A. Pflederer was promoted to CFO at Packaging Corp. of America (No. 471). Pflederer is currently the company's general counsel. He will succeed Robert P. Mundy, EVP and CFO, who will step down from the role, effective May 1. Mundy will remain employed by PCA in an advisory role until his retirement on March 1, 2026. He has served as CFO since 2015.
Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.
More notable moves this week:
Fernando Fernandez, CFO at Unilever was promoted to CEO, effective March 1. Fernandez will succeed Hein Schumacher, who is stepping down as CEO by mutual agreement, and will leave the company on May 31. Before becoming CFO in January 2024, Fernandez was president of Unilever’s Beauty & Wellbeing businesses.
Jessica Holscott was appointed CFO of Nielsen, a global audience measurement, data and analytics provider, effective Feb. 24. Most recently, Holscott was the CFO of Spotter, a creator-focused company. Before that, she served as CFO and EVP for Warner Media. Holscott also served as CFO and EVP for HBO.
Jochen Breckner was promoted to CFO of luxury carmaker Porsche, effective Feb. 26. Breckner succeeds finance chief Lutz Meschke, who is leaving the company after 24 years. Breckner has worked for Porsche since 2000 beginning as an intern. Since September 2018, he served as head of the general secretariat and corporate development.
Chadwick Westlake was named EVP and CFO of OpenText (Nasdaq: OTEX), effective March 5 to succeed Madhu Ranganathan. Westlake previously served as the CFO of EQB Inc., a digital financial services company. Before that, he held various positions at Scotiabank for more than 18 years, including his last role as EVP of Enterprise Productivity and Canadian Banking Finance.
Big Deal
The upswing in global private equity and venture capital investments in the consumer sector seen in 2024 is continuing into this year, according to a new analysis by S&P Global Market Intelligence.
In 2024, the sector’s deal value increased by 45.8% year over year to $81.4 billion. Of this total, consumer discretionary (nonessential consumer goods and services), accounted for $69.58 billion, up 52.6% from 2023. The deal value of consumer staples increased slightly to $11.82 billion from $10.22 billion.
In January, there were a total 136 consumer sector deals worth a combined $720 million, according to S&P Global Market Intelligence data.
Investors now see opportunities to analyze and modify the portfolio of consumer brands or products to align with market trends, mitigate risk and drive growth, Mike Ross, PwC U.S. consumer markets deals leader, told Market Intelligence in an interview.
Going deeper
Here are four Fortune weekend reads:
“Vista’s CEO is the second richest African American. He says firms will hire the best people—and this group will be diverse” by Luisa Beltran
“Trump has a path to killing the Fed’s independence—if he wants it” by Greg McKenna
“Experts warn of federal government brain drain that could be ‘devastating’ for the U.S. economy” by Alicia Adamczyk
“Coca-Cola is Olipop’s and Poppi’s latest prebiotic soda competitor. But are ‘healthy’ sodas actually good for you?” by Ani Freedman
Overheard
“It is the first model that feels like talking to a thoughtful person. I have had several moments where I’ve sat back in my chair and been astonished at getting actually good advice from an AI.”
—OpenAI CEO and cofounder Sam Altman wrote in an X post on Thursday as the company announced the debut of its GPT-4.5 model. It’s one of the most highly anticipated products in the generative AI market, Fortune’s Jeremy Kahn writes in a new report. “But the launch, coming two years after GPT-4 was introduced, only served to highlight how the high-flying AI company is struggling to stay at the front of the race it helped kick off,” Kahn writes.
