San Jose, Calif., November 1, 2011  – Asked for their input on subjects such as balancing the federal budget, the challenge of China, and the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act, top financial executives in Silicon Valley recently weighed in on the issues that will impact the financial health of the area. More than 100 of the 500 members of the Silicon Valley chapter of Financial Executives International (FEI-SV) responded to a poll taken October 12-19 and released today. The survey serves to frame the issues that will be energetically discussed at the FEI Silicon Valley Conference to be held November 17, 2011, “Economic Worlds Colliding? Washington DC vs. Enterprise Growth USA.”

“FEI-SV’s membership responded strongly to the challenge we issued, to speak up and have our voice be part of the dialogue on today’s most pressing economic issues,” said George de Urioste, FEI-SV’s Board President. “Through the lens of financial leadership, the collective wisdom of our group brings expertise to business growth issues. These are the corporate financial decision-makers who affect Silicon Valley and our country’s economic recovery. ”

Concerns

Two issues that yielded the strongest majority of concern was the impact of European instability on the US economy -- which 91% feel is somewhat or very significant -- and advice on closing the federal budget gap, on which 86% favor deriving some or all of savings from cuts in spending rather than increasing revenues. The third strongest finding is a resounding 79% who are not confident in the federal “Super Committee’s” chances of cutting one trillion dollars from the 2012 national budget.

The survey illuminates some sources of worry for Silicon Valley’s financial leaders:

• Looking ahead to “visibility and predictability” of business growth in 2012, poll respondents are divided in their confidence levels: 26% expect some improvement, 21% expect somewhat or substantial worsening, and 46%, expect no change.
• Given a list of pressing issues, those ranked the most concerning by senior financial executives are: the ability of federal politicians to achieve bi-partisan agreement on economic solutions; balancing the Federal budget and tax reform. These score higher than deficit reduction, Social Security, Medicare reform and healthcare reform.
• Regarding possible outcomes of imposing higher capital requirements on banks, 81% fear negative consequences such as tighter lending requirements by banks. Only 3% feel there would be no impact.
• 72% are concerned that state of the economy will have a negative effect on mergers and acquisition activity.
• A large majority, 75%, believe that Chinese exports are a threat to the US manufacturing sector.
• On the issue of data security, 39% express concern that their organization will experience data theft in the next six months.

Predictions

Two topics related to the possible impact of the Dodd-Frank legislation illustrate the complexity of that act’s possible outcomes:

• 59% feel that it would increase the cost of doing business, while 39% feel it will have little impact.
• In terms of the effect of the legislation on investors, 42% believe the legislation will be either not beneficial or disastrous.

Advice to Washington, DC

Through the poll, FEI-SV members offer two pieces of advice for Washington, DC. The first is on the issue of closing the budget gap, as mentioned above. Fully 86% favor deriving some or all the savings from cuts in spending. The breakdown on that question includes 63% indicating a preference for deriving some portion of savings from new revenues, and a not-insignificant 13% favoring doing nothing until the economy improves.

The second piece of advice from the survey is directed to the Federal Reserve Board regarding the actions that body should take to help the economic recovery. The FEI-SV polling revealed that 35% of the members advocate for adding more stimulus; 14% suggest stopping all stimulus activities and a very significant plurality - 48% - is in favor of waiting six months and then reconsidering options.

About FEI-SV

FEI Silicon Valley is the professional association of senior corporate financial executives from high-profile public companies and venture-funded startups in the greater Silicon Valley. With more than 500 members, the association’s mission is to represent the interests and contribute the insights of its members to address economic issues affecting business and life in Silicon Valley. FEI-SV is the third largest chapter of the national organization, Financial Executives International, which has 15,000 members and 85 chapters in the USA and Canada.

Available: detailed spreadsheets and charts with results.

CONTACT: Elisabeth Handler (PRx), 408 309-1298 (cell),
elisabeth@prxinc.com