Donald Trump and Hillary Clinton each won seven states in the Super Tuesday primaries. Ted Cruz and Bernie Sanders did better than expected – by me, at least – with Cruz winning three states and Sanders four.
I’m not ready to predict a winner in this year’s presidential sweepstakes – all pundit predictions have been spectacularly wrong this season. But I am prepared to declare a loser: big business. The so-called “establishment” Republican candidates – Rubio and Kasich – got trounced (Rubio won only in Minnesota.) Donald Trump is prevailing by trampling all over the business agenda – freer trade, more high-skilled immigration, balanced budgets – and demonizing an ever longer list of the Fortune 500 companies – Pfizer was back in his sites last night. Meanwhile, Bernie Sanders, while trailing, has succeeded in his original goal of pushing the Democratic party far to the left. Hillary Clinton now often sounds almost indistinguishable from him, and has dug an anti-bank, anti-business, anti-trade, Elizabeth-Warren-friendly foxhole from which she will find it difficult to extricate herself.
On FORTUNE this morning, Jeffrey Garten, former dean of the Yale School of Management, warns that it “would be a mistake of historic proportions for big business to assume it can control whoever is elected, or that it can limit the damage, or that any new president will tack to the center.” Instead, he calls on business leaders to adopt “a new grand strategy,” not unlike the one they developed after World War II, that, among other things, would build public support for an open, entrepreneurial, multilateral economy; push policies that will mitigate income disparities and other glaring social problems (climate, infrastructure); and identify several dynamic CEOs who can play a stronger role in providing public leadership.
Bottom line: the head-in-the-sand strategy isn’t working.
You can read Garten’s manifesto here.
More news below.
• Ex-Chesapeake Energy CEO indicted
Aubrey McClendon, former chief executive officer of Chesapeake Energy and a legend in the U.S. energy industry, was charged on Tuesday with conspiring to rig bids to buy oil and natural gas leases in Oklahoma, the Justice Department said. The indictment follows a nearly four-year federal antitrust probe that began after a 2012 Reuters investigation found that Chesapeake had discussed with a rival how to suppress land lease prices in Michigan during a shale-drilling boom. Although the Michigan case was subsequently closed, investigators uncovered evidence of alleged bid-rigging in Oklahoma.
• Valeant CEO calls for more time
Valeant, which has been featured in the CEO Daily newsletter many times in recent months, made news again after it was reported CEO Michael Pearson held calls with sell-side analysts telling them he needed time to understand the company’s performance after a two-month absence. The conversations with Pearson were described by a few analysts that cover the stock, which has fallen 75% since its August peak. “Investors are frustrated with the constant spate of seemingly bad news regarding the company and the resulting sell-off in the stock; however, we urge some patience,” one analyst with a buy rating on the stock advised.
• Trump, Clinton win Super Tuesday
Hillary Clinton and Donald Trump earned huge wins yesterday and in the process, tightened their grips on the Democratic and Republican presidential nominations as they extended their delegate leads against their rivals. Trump won a majority of the 11 states contested while Ted Cruz scored victories in Texas and Oklahoma and Marco Rubio won Minnesota. On the Democratic side, Clinton won seven states compared to the four Sanders took. None of the seven remaining candidates from both parties has indicated they will drop out of the race.
• Why Trump’s taxes may prove he’s not that rich
Fortune‘s Shawn Tully on two occasions spent weeks striving to demystify the Vatican’s finances. Now he’s attempting to solve the riddle of Donald Trump’s income and net worth. Because Trump hasn’t publicly released his tax returns, voters have to look to other documents the Trump campaign has already provided, including a balance sheet released in June. When closely read, Tully argues that Trump appears to have overstated his income, by a lot, which could be the reason he has so far tried to avoid releasing his returns. Tully thoroughly crunches the numbers by adding up all the revenue that Trump claims as income. A clearer picture emerges of the GOP frontrunner’s business interests.
• Sports Authority files for bankruptcy
Sports Authority CEO Michael Foss said the athletic gear retailer has decided to file for Chapter 11 bankruptcy as a way to implement a financial and operational restructuring that it sees as necessary to better appeal to customers. The company has identified 140 stores to close or sell in the coming months. Media reports had long speculated this move could come soon, especially after Sports Authority missed a $20 million interest payment in January. That prompted a 30-day grace period during which it could compromise with creditors. That window ended February 14.
Around the Water Cooler
• Starbucks COO won’t return to post
Starbucks said one of the executives instrumental to the coffee giant’s ascent would not be returning to the company now that his year-long sabbatical is over. Chief Operating Officer Troy Alstead resigned a year after he went on an indefinite leave of absence, a move that was effective February 29. He was seen as second-in-command at Starbucks’ to CEO Howard Schultz. Alstead, who had been with the company for 23 years prior to the sabbatical, initially took time off (Starbucks calls it a “Coffee Break”) to spend more time with his family.
• Zynga CEO Pincus is out again
Social-gaming company Zynga said co-founder Mark Pincus would again step down as CEO at the company and will be replaced by the former president of Electronic Arts, Frank Gibeau. Zynga continues to sputter after failing to create new hit games after achieving early success by building games that were once very popular on Facebook. After an IPO five years ago, Zynga’s shares have slumped more than 85%. Pincus previously served as CEO until 2013 when he stepped aside amid mounting troubles at the time. He returned again last April.