Adding Value through Taxes

Paul Caja and his tax department are saving MTD Products valuable tax dollars by staying informed on ever-changing tax laws while engaging in the operations of a successful manufacturing business

Paul Caja, MTD Products Photo by Emily Bobrowicz

Unless they want to overpay taxes every year, corporate leadership teams should consider the tax function much more than just a compliance function. As part of senior leadership at MTD Products, a global manufacturer of outdoor power equipment, Paul Caja calculates the tax implications of business decisions in advance. The vice president of taxation, Caja works with his team and other key leaders to mitigate potential additional costs with the correct tax advice, which ultimately is a key contribution to the continuing success of this eighty-six-year-old Cleveland, Ohio-based company.

“When people are making a business decision, taxes should be a consideration, not the driving reason,” Caja says. For example, he recently advised MTD’s senior leadership about the tax implications of selling its award-winning outdoor power equipment directly to consumers online in a new venture. The challenge, according to Caja, is properly calculating, collecting, and remitting sales taxes for these purchases in potentially thousands of state and local tax jurisdictions where the customer is located.

Due to Caja’s leadership at the private, family-owned company, his department has contributed real tax savings into the millions that have freed up cash for further growth of the core business in the twelve years he has been the vice president of taxation. These savings were driven by advanced planning to make sure business decisions made the most sense on a local, state, federal, and even international tax level. Proper tax planning and open communication with key executives remain an integral part of Caja’s philosophy.

Today, the tax department continues to play a crucial role in MTD’s senior leadership group at the international company. Caja’s latest move is converting MTD to cutting-edge tax software, improving the ability of the four-person tax department to respond quickly and provide quality information at a moment’s notice. The modernization of the tax department makes the year-end closing process highly efficient and reduces preparation time dramatically.

Caja reports directly to the CFO, which grants him access to key personnel when needed. “Our CFO, Jeff Deuch, is very tax-savvy,” Caja says. “In other words, he understands the importance of the tax function, and not all CFOs do. On the rare occasion I reach an impasse with a particular executive in a particular area, Jeff provides the support I need to ensure we’re managing the tax portion while working to satisfy the business need.”

Caja arrived at MTD in 2006 after a decade at PricewaterhouseCoopers (PwC). Prior, he served tax teams at the world’s largest greeting card producer, American Greetings, and the multinational professional services firm EY. He earned a bachelor’s degree in accounting and business from Indiana University Bloomington as well as a master’s degree in taxation at the University of Akron.

MTD’s products are sold throughout the world, spanning the United States, Canada, Australia, Europe, and Asia. Its family of brands includes Cub Cadet, Troy-Bilt, WOLF-Garten, Rover, Robomow, and Remington, among others. Caja contributes to the growth at MTD by assisting in deriving transfer pricing policies and procedures. Transfer pricing is the method of sharing value when selling products across the world through related parties.

“Transfer pricing is one of the more highly contested areas of the tax world,” Caja explains. “Most governments look at multinationals and make sure they are getting their fair share of the profitability of a product. So that is one of my bigger responsibilities. My biggest role is to make sure the transfer pricing is in place in all jurisdictions.”

Caja’s leadership and the tax department’s efforts have resulted in MTD receiving two consecutive no-change audits of its tax returns from the IRS. “For a substantial and complex company, that is very unusual,” says Caja, who praises his tax director’s efforts in particular.

In fact, a key part of Caja’s leadership role is to keep the company’s relations running smoothly with agencies such as the IRS, along with the outside auditors, tax firms, and consultants that collaborate with his department. Caja emphasizes the importance of maintaining good relationships with everyone his department works with, including internal MTD departments. “I believe you treat people the way you want to be treated,” Caja says.

That philosophy extends to his leadership style, which Caja describes as hands-off but caring. “I want to make everyone feel that they contribute,” he explains. “The more you work to do the right thing by the people that work for you, the better off you will be.”

Caja also has adapted his leadership style from several important mentors throughout his career. He credits his mentor at EY, Moses Awe, for his technical training. He also points to his mentor Mark Stevens, a partner at PwC, who Caja cites as a major influence on his life, management style, and how to treat people in the workforce.

Yet Caja learned teamwork from a more personal source: his ten brothers. They formed an amateur softball team that has been playing together for years. He applies that same dynamic of learning to work together through sports for business purposes in smaller groups, like golf foursomes.

“Golf is a great social mediator,” Caja says. “I only play golf with people I’m interested in getting to know. Playing golf is a good environment to learn what people are about. For twenty years, I’ve used golf as an opportunity to meet and get to know customers and providers.”

Finally, Caja credits MTD Products CFO Jeff Deuch as a great mentor for managing his expectations for the tax function. “A good mentor puts their needs aside for the development of their people,” says Caja, who adds that he also tries to empower his own tax staff.

“My goal is to elevate the tax department within the organization and develop people that can replace me when it’s time for me to retire,” he says. “To a certain extent, I’ve reached that goal of elevating my department, but there’s always room to do more. I strive for continuous growth.”

NERA Economic Consulting understands that it takes a passionate and forward-looking leader to make an impact on an organization. It has been our honor to support Paul Caja in implementing his vision and we wish him success.