Corporate Risk Mitigation Tactics Whether the

Transcript:Corporate Risk Mitigation Tactics Whether the:
Corporate Risk Mitigation Tactics Whether the White House Stays Red or Turns Blue October 1, 2020 © 2020 Willis Towers Watson. All rights reserved. Jay Heidbrink Director, Mergers & Acquisitions Group Corporate Risk & Brokering +1 617 283 2573 Jay.heidbrink@willistowerswatson.com Laura Burns Senior Vice President, Political and Credit Risk, Financial Solutions +1 301 692 3053 Laura.burns@willistowerswatson.com Executive Summary 2 © 2020 Willis Towers Watson. All rights reserved. WARNING!!!! This is not a political prognostication presentation! You will sadly not learn the winner of November’s general election. Executive Summary 3 © 2020 Willis Towers Watson. All rights reserved. 4 Assumptions & Methodology Part I: © 2020 Willis Towers Watson. All rights reserved. Assumptions Campaign Platforms will be enacted This is a big “IF.” Remember Obamacare - Even in the earliest days of a unified Republican government, repeal efforts failed. Concessions are always made on both sides, regardless of which party controls all of Congress. Take, for example, the attempts to repeal the Affordable Care Act. Companies won’t adapt to change Impacted industries generally have months — if not years — to adapt and diversify around the opportunities that are created from change. Smart, long-term investments are not typically predicated on a political landscape that potentially changes every two years. BUT…has the pandemic created a new norm Ceteris paribus – “with other conditions remaining the same.” While the concept is a useful tool for economic theory, it rarely prevails. There are many moving parts within the economy, company fundamentals, and other investment variables © 2020 Willis Towers Watson. All rights reserved. 5 Methodology 6 Broadly speaking, political forecasting is as follows: “Forecasting of events that affect the structure of political systems and the configurations of political power. In relatively stable, prosperous, democratic, and developed countries, political forecasting largely involves two related forecasting activities: Predicting what individual or political parties will win elections Predicting what sort of policies will be implemented by the ruling parties © 2020 Willis Towers Watson. All rights reserved. 2020 has thrown this all out the window 7 Overview of Candidate Platforms Part II: © 2020 Willis Towers Watson. All rights reserved. Taxes 8 Biden An increase in the corporate tax rate Arguably the biggest change from Donald Trump's hallmark Tax Cuts and Jobs Act (TCJA) would be the partial undoing of the tax cut passed along to corporations. Under the Biden tax plan, the corporate tax rate would