Happy Good Friday.
The battle over bathrooms in North Carolina is once again putting big business on the front lines of the nation’s culture wars.
In case you aren’t following: The North Carolina legislature called a special session Wednesday to void a Charlotte ordinance that would have enabled transgender people to legally use restrooms aligned with their gender identity. The new law makes North Carolina the first state to require people to use bathrooms that match their gender at birth.
Businesses operating in the state, including American Airlines, IBM, Dow Chemical, Biogen and Paypal—which just last week announced plans to hire 400 people in Charlotte—took to Twitter to condemn the law, and put the state on notice that it could affect their willingness to invest. Even the NCAA joined in, threatening to withhold championship games from the state—a potentially mortal blow to basketball-obsessed North Carolinians. You can read IBM’s statement here.
Taking a more cautious path was Bank of America, which is one of the state’s largest employers. It didn’t specifically condemn the law, but did release a statement saying the company is “steadfast in our commitment to non-discrimination and in our support for LGBT employees through progressive workplace policies and practices.”
This is just the latest example of businesses taking on state legislatures on behalf of LGBT employees. Salesforce CEO Marc Benioff has been leading a business campaign against a “religious liberty” law in Georgia, after doing the same in Indiana last year. It’s also a dramatic change from an era when business leaders preferred to stay out of controversial social issues that didn’t directly hit their bottom line.
More news below. And if you missed it yesterday, be sure to read Adam Lashinsky’s story from our April magazine on how Jeff Bezos is becoming a power beyond Amazon. Bezos topped Fortune’s new list of World’s Greatest Leaders.
• Chipotle CEOs got a big paycut
Not only did last year’s E.Coli crisis dent Chipotle Mexican Grill’s financial results, but the outbreak also cut the burrito chain’s co-CEOs’ total compensation by more than half. Steve Ells and Monty Moran each saw their 2015 base pay rise a bit, but each executive’s total compensation fell sharply because neither received options or non-stock awards in 2015 as they had the previous year. Last year, the restaurant chain was rocked by an E. coli outbreak that closed dozens of stores, made headlines for months, and decimated sales results. Shares are about 40% below pre-crisis peaks, a tough reversal of fortune for the one-time Wall Street darling.
• Marissa Mayer’s shrinking parachute
Ousting CEO Officer Marissa Mayer could cost Yahoo about $12.4 million. Thanks to Yahoo’s declining share price and the vesting schedule of Mayer’s awards, letting her go now would be a bargain compared with 15 months ago. Had she been terminated in December 2014, Mayer would have been able to collect $36.1 million in severance and equity awards vesting early, Bloomberg reports, adding that if her termination would have come within a year of selling the company, the exit package at that time would have swelled to $157.9 million. Because termination-related payouts are tied to equity, Mayer’s golden parachute has diminished as Yahoo shares slid more than 30% in the past 15 months.
• Gilead ordered to pay Merck in dispute
A federal jury ordered Gilead Sciences to pay Merck $200 million in damages for infringing two Merck patents related to a lucrative cure for hepatitis C. The damages amount was far less than the $2 billion Merck had demanded. On Tuesday, the same jury in San Jose, Calif., upheld the validity of the patents, which lie at the heart of the dispute over Gilead’s blockbuster drugs, Sovaldi and Harvoni. Together the medicines had more than $20 billion in U.S. sales in 2014 and 2015.
• Time is running out for SunEdison
The Belmont, Calif.-based renewable energy giant has until March 30 to submit its 2015 annual report, a document the company has delayed filing twice already this year, Bloomberg reports. If SunEdison blows past a third deadline, it will have to begin negotiating with creditors on an outstanding $1.4 billion it has borrowed, or else it will face a technical default. SunEdison’s debt ballooned to $11.67 billion in the third quarter of last year from $7 billion in the last quarter of 2014, a spike fueled in part by an international shopping spree for clean energy projects and developers. Some warn that questions remain about whether the company can make good on its financial commitments.
Around the Water Cooler
• Car makers on hunt for tech startups
Automakers and car-parts suppliers have hooked into tech startups in recent years to boost their in-vehicle connectivity and to accelerate autonomous-car development. A recent example of M&A action in this space is General Motors’ purposed purchase of tiny Cruise Automation for more than $1 billion, a deal that would be one of the auto industry’s biggest Silicon Valley acquisitions to date. The Wall Street Journal reports it won’t certainly be the last. Consultants at PricewaterhouseCoopers estimate 2015 M&A activity by automotive suppliers reached nearly $50 billion, more than three times that of the prior year. The industry’s need for new capabilities is helping fuel the spending.
The Wall Street Journal (subscription required)
• The Trump campaign’s social experts
For the 2016 election cycle, social media is a critical part of communications and electoral involvement. And if social media popularity were the deciding factor, Donald Trump would walk away with the presidency. While Trump largely runs his Twitter account by himself, there are two insiders behind the scenes. Justin McConney oversees social media and new media at both the Trump Organization and Trump himself. And Dan Scavino has been the director of social media for the Trump campaign since July 2015. He is on the road and posts on social media from the campaign trail.
• Playboy hires bankers for possible sale
Playboy, the magazine and business enterprise long synonymous with founder Hugh Hefner, may soon begin a new chapter under new management. Playboy Enterprises has reportedly retained boutique investment bank Moelis & Co. to advise it on a potential sale that could fetch more than $500 million for the magazine and its bunny-branded licensing assets. Talk of deals comes at a time when Playboy continues to struggle for financial and cultural footing after a heyday during which the magazine pushed the boundaries of sexual mores while publishing well-regarded articles. But the Internet cut into the once-dominant magazine format, resulting in a drop from a mid-’70s circulation high of 5.6 million to less than a million today.