Becker's Hospital Review

54 CIO / HEALTH IT CEOs see pay raises after cyberattacks, study finds By Mackenzie Garrity C EOs were more likely to receive pay raises aer their firms suffered a cy- bersecurity breach, according to a Warwick Business School study. e U.K.-based school analyzed data breaches at 41 publicly traded companies in the U.S. be- tween 2004 and 2016, focusing on breaches re- ported by the media, including stolen hardware, insider attacks, poor security and hacking. While security breaches had a lasting impact on how firms were run, the stock market "shock" was forgotten aer a few days. ese firms were no more likely to fire their chief executive. Instead, CEOs were more likely to see an increase in total and incentive pay years aer a security breach. Chief executives at firms that were not target- ed by hackers saw their pay decrease by more than $2 million a year over the same period. "Firms that suffer a data breach do not typical- ly respond by firing the management, but by investing more in the existing CEO," Daniele Bianchi, an assistant professor at the business school, said in a news release from Warwick. "At first, these results may look puzzling. However, they are consistent with the idea that the average response is to invest more in the management to address possible structur- al flaws, as well as maintaining the integrity of the firm in response to the reputational dam- age it has suffered," Mr. Bianchi said. Companies typically saw share value and li- quidity drop on the day the breach was dis- closed, but aer two days the negative mar- ket reaction had "vanished," according to the news release. Aer a cyberattack, companies are more like- ly to invest less in research and development. ese companies also paid lower dividends over the next five years. Instead, companies invested in managing financial risks caused by data breaches. n Oracle revenue drops 1% as competition increases in cloud By Jackie Drees O racle reported earnings results for the third quarter of its 2019 fiscal year on March 13, posting a 1 percent decrease in total revenues. The company generated $9.6 billion in revenue for the quarter, down 1 percent from $9.68 billion one year prior, The Wall Street Journal reported. The results come after cloud competitors like Microsoft and Ama- zon reported earnings increases. For Microsoft's second quarter of 2019, the company posted a 12 percent increase in revenue, attributing its cloud segment Microsoft Azure for the growth. The tech giant does not disclose exact revenue figures from individual products but reported 76 percent growth in Azure for the second quarter. Additionally, Amazon saw a 31 percent increase in net sales for its 2018 fiscal year, with its cloud platform Amazon Web Services generating a 47 percent increase in net sales from the year prior. Oracle's cloud services and license support revenues, which is the company's largest segment, increased 1 percent in the third quarter. "As a percentage of our total software business, cloud is now more than double what it was just three years ago and provides us with the ability to acceler- ate overall software revenue growth as this mix shift continues," Oracle Co-CEO Safra Catz told The Wall Street Journal. n Social media posts could affect insurance costs, experts say By Jackie Drees I nsurance companies may start looking to an individual's so- cial media accounts to determine an applicant's risk for life, car and property insurance, The Wall Street Journal reported. Three things to know: 1. Within the next few years, insurance underwriters may use automated reports based on an individual's social media us- age and posted content to assess potential customers. "We're going through a period now where most life insurers are exploring using all types of data, not just data they get di- rectly from the customer proactively, but other external sourc- es of data — social media being a big one," Ari Libarikian, a se- nior partner at management consulting firm McKinsey & Co., told The Wall Street Journal. 2. To avoid high insurance premiums, social media users should post content that highlights healthy activities rather than risk-like behaviors. "Paragliding, ice-climbing, riding a motorcycle while drinking a beer: They are a little over the top, but honestly, I've been surprised at what people post," Mike Vogt, executive director of data and analytics at insurance consulting firm SPR, told The Wall Street Journal. "That history never goes away, even if you remove the post a few hours later." 3. Technology that analyzes individuals' social media accounts to apply to underwriting decisions is still underdeveloped, and insurers are not confident that it is "better" than current sources, such as application questions and blood and urine samples, according to the report. n

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