In a Wednesday interview with CNBC’s Jim Cramer, Paychex CEO John Gibson told government leaders to provide more clarity on taxes and tariffs in order to help small businesses.
“I would give some advice to our policy makers,” Gibson said. “Let’s bring some more clarity to the situation, and I think we’ll see entrepreneurs take off and grow.”
Paychex provides services like payroll, human resources and benefits to companies. The outfit reported a mixed quarter Wednesday morning that failed to impress Wall Street, and shares were down 9.4% by close.
Gibson was fairly optimistic about the mood of Paychex’s client base, saying that client retention was up year-over-year. He said there were some “anomalies” during the latest quarter, but the company’s overall value proposition is fine.
There was a spike in financial distress and bankruptcies in the company’s “micro segment,” meaning entrepreneurs and small businesses, Gibson said. However, that sort of action isn’t uncommon when there is an “external shock,” he continued. He also said seasonal businesses, like landscapers, usually survey the future in the spring, and some may have decided to pull back. Gibson said he sees no signs of recession, adding that he anticipates moderate and stable growth in small businesses, as well as continued deceleration in wage inflation.
Gibson was also positive on Paychex’s recent acquisition of payroll accounting firm Paycor. The deal closed in April, and Gibson said the companies have been moving to integrate quickly. Paychex and Paycor are “stronger and better together,” he said, adding that his company has “basically expanded our sales coverage going into this fiscal year.”
“I think we’re very well-positioned to deliver stronger returns and long-term value our for our shareholders,” Gibson said.
