Solving the Corporate Tax Puzzle

Arthur Walker Jr. extends his zeal for international tax planning to the whole of Ocwen Financial Corporation

In 2012, Ocwen Financial Corporation continued its innovation of the mortgage industry when it moved a significant portion of its mortgage servicing ownership and oversight off-shore to the US Virgin Islands with its subsidiary Ocwen Mortgage Servicing Inc.

The significance is that, because Ocwen has its mortgage servicing operation off-shore, the company gets tax deferral on a large portion of its servicing income. It’s a relatively novel idea that came to fruition because the executive team saw that its mortgage servicing operation was one of its largest revenue streams, identified an opportunity to save on the company’s taxes, and committed to the plan.

That’s when Arthur Walker Jr. stepped in. As an expert in tax law with more than twenty years of experience in international corporate tax planning, Walker was the perfect person to dot the i’s and cross the t’s, so to speak.

“I personally came in right after it was planned because they needed somebody to make sure that the structure was implemented correctly, contemporaneously documented, monitored, and that the business units were educated about the structure,” Walker says.

As the senior vice president of global tax at Ocwen, Walker says the move would not have been possible without the dedication and complete support of the company’s leadership. In fact, over the past few years the company’s CFO, general counsel, president of US Virgin Island operations, a number of servicing and senior finance executives, the entire capital markets desk, and Walker himself have moved from the continental United States to the St. Croix, US Virgin Islands. In addition, the company has hired roughly seventy call center employees locally. Walker provided the expertise and guidance to ensure the entire process was properly structured and went as smoothly as possible. It involved several moving pieces, but it wasn’t a chore. On the contrary, the entire process was just the type of project that excites Walker.

Before he entered the world of international corporate tax, Walker earned degrees in accounting and international business from Georgetown University because he wanted to be an entrepreneur. After graduation, he remained at Georgetown but took the path toward law school to learn more about the laws that entrepreneurial operations would face.

“It turns out that being a lawyer has its entrepreneurial side as well,” Walker says. “I liked being a consultant that was able to specialize in one area while also taking the business’ goals and constraints into account.”

The area he ended up specializing in was taxes. He earned an LLM in taxation at Georgetown University Law Center following his JD. His first job at a big law firm was with Baker & McKenzie, where he worked before and during his final year of law school.

There, he found a passion and a zeal like never before in tax planning, and his vision for his career crystallized. “I really just fell in love with doing tax law,” he says. “It allowed me to really get involved in the business. I like to figure out what practical and tax efficient solutions might work for the business. It was like having a giant number of puzzle pieces. You could put that puzzle together a number of different ways to accomplish what the business wanted to do. But putting that puzzle together in a manner that adds significant value and meshes well with the way the business operates is extremely satisfying.”

That zeal for solving tax puzzles has not wavered after more than twenty years in the industry, including more than nearly fifteen years at Mayer Brown LLP. At the same time, he was trying to encourage his love of tax law into a new generation of lawyers. He taught night classes for more than five years on corporate taxation to JD students as an adjunct professor at Columbus School of Law in Washington, DC. Today, he extends that same zeal to the rest of Ocwen.

“At Mayer Brown, Art was very smart, creative, and extremely hard-working,” says Kenneth Klein, one of Walker’s partners and mentor at Mayer Brown. “He was a fabulous project manager. At Ocwen, Art has used those skills to build a first-class multinational tax department, almost from scratch.”

Everyone on the Ocwen leadership team knows Walker is more than happy to talk taxes, and he says the team is always open to explore and consider any opportunities he might see to make the organization more tax efficient. To execute those plans, he often works closely with the various business unit leaders and the business development team, as well as the entire C-suite, treasury department, and other senior leaders. It helps, though, that the company views tax planning as an investment.

“I think it’s hard to save money on your tax budget and improve your tax efficiencies in the short term,” Walker says. “We actually look at tax efficiencies as you would any other investment. You may have to spend more in the short term in order to save and/or improve your long-term position. Putting those tax investment decisions in a cost-benefit analysis often highlights the value that tax can bring to a transaction. It is often worth spending a little bit more now if you do it smartly and if you’re getting a good return on it. That’s an investment that is worth it to make.”

By selectively choosing those tax investments, Walker has been able to reduce the overall tax spend at Ocwen while strengthening the company.

A major factor in making those tax planning investments possible is Walker’s team. To help them succeed, he starts by looking for proactive problem-solvers to join the tax department. He then ensures that they have all the resources needed to accomplish their goals, while still providing guidance and holding them accountable. At the same time, he encourages everyone to push themselves and pursue projects that excite them and continue their education through seminars, trainings, webinars, and other similar opportunities. Above all, he enjoys mentoring team members on their career and goals.

Throughout his career, Walker says he has benefited from outstanding mentors, so he pays it forward by providing guidance and advice to his team members. Conversely, his team helps him stay ahead of the curve by monitoring news sources, recognizing trends in tax law as they develop, and constantly looking for new opportunities for efficiency in their department.

Although the sheer scale of navigating taxes on a global scale can be daunting, it helps that he surrounds himself with people that are just as passionate about the field as he is.

“We all get excited about this stuff,” Walker says. “It goes back to those puzzle pieces. As the puzzle changes, it’s exciting to see how the new and changed pieces impact all the other pieces. Sometimes that means making minor adjustments, and sometimes you have to rethink the entire structure in order to stay up on the puzzle. But that’s what’s challenging about it. That’s what’s exciting about it. It’s always evolving. It’s never boring.”

Photo: Eric Bern