Final Class Project
Financial Analysis of State Street Corporation
By
John Borges
Jason Dionne
Ann Lynch McCusker
Dong
Reza
Kerry Najarian
submitted as a requirement of the Financial Management Class
MBA/Master’s Program
In the
Department of Economics and Business Administration
At Framingham State University
Subject:
Financial Management (FINA 929)
Instructor:
F.M. Kemegue, Ph.D.
12-10-2013
TABLE OF CONTENTS
1. INTRODUCTION………………………………………………………………..……………..1
2. CORPORATE GOVERNANCE ANALYSIS.……………………………………………..2
3. STOCKHOLDER ANALYSIS………………………………………………………………….
4. RISKS AND RETURNS………………………………………………………………………..
5. CAPITAL STRUCTURE……………………………………………………………………….
6. LIST OF TABLES……………………………………………………………………………….
1. INTRODUCTION
Founded in Boston, MA in 1792, State Street Corporation is considered a world leader in the
Enancial services industry. Given the amazing amount of technological changes that have
occurred since its inception, it is remarkable that State Street has not only survived but thrived
over the past 221 years! With its long history of banking and investing knowledge, State Street
is able to continue to grow and provide value to its customers and shareholders.
State Street Corporation (STT) has been able to craH a corporate governance policy that
provides leadership to a global workforce of almost 30,000 employees and satisfy the goals of
its diverse shareholders.
The corporation is able to manage the delicate balance of risk and return. Given the
volatility of Enancial markets (especially in recent years) this is not a small accomplishment.
Others in the Enancial services industry have had diIculties when trying to aggressively to
maximize proEts. By using sound Escal policies and adhering to strong rules of corporate
governance, State Street was able to avoid bankruptcy and government bailouts.
State Street Capital structure is solid. It utilizes a great deal of debt (as their competitors do)
but seems to use it wisely and more conservatively. All of these factors have contributed to the
longevity of this Erm. By staying on this path and adhering to its internal policies, State Street
should continue to prosper well into the future.
2. CORPORATE GOVERNANCE
Corporate governance is covered and emphasized greatly by State Street Corporation. State
Street serves many of the leading investors around the world and is a publically traded company
on the New York Stock Exchange (NYSE). They currently have their own governance and
standards in place, but they also put in place the regulations in the Sarbanes-Oxley Act of 2002.
This act is the rules and regulations of the SEC and NYSE, this in combination with their
governance, further strengthens what they already have. State Street uses the governance they
have in place to help the board of directors exercise their duties and to serve their shareholders
in the best way possible. Under these guidelines State Street has in place a board of directors
who have major duties and responsibilities. The board also has committee in place who
