This morning I’m turning over this note to my excellent colleagues, who have advanced three of the big leadership stories of the moment.
-Today is the scheduled meeting between Donald Trump and House Speaker Paul Ryan in Washington, apparently to see if they can iron out their differences sufficiently that Ryan, the country’s highest ranking elected Republican, could bring himself to support Trump. Party chairman Reince Priebus will also attend. As noted here yesterday, this is a classic power struggle, and Zeke J. Miller of our sister publication Time analyzes it insightfully. Those hoping for unity cannot be encouraged by a statement Trump issued yesterday, in which he seems to have decided the meeting’s outcome already: “Reince feels, and I’m okay with that, that we should meet before we go our separate ways. So I guess the meeting will take place and who knows what will happen.”
-On Tuesday I noted briefly that Sumner Redstone’s video-recorded testimony in a lawsuit last Friday raised serious questions about his health and his ability to lead CBS and Viacom, two publicly traded companies that he controls. For a truly revealing look at how this bizarre situation arose — the most deeply reported account you’ll find anywhere — please check “The Disturbing Decline of Sumner Redstone” by Peter Elkind with Marty Jones. The story is disturbing not only in human terms but also for the questions it raises about how these companies could have failed to tell shareholders about the condition of their executive chairman. It’s also a cautionary tale about the damage that unwise succession planning can do in a family business. You’ll shake your head in wonder.
-If you’re puzzled by what on earth happened to U.S. retailers yesterday, Phil Wahba explains. The sector collapsed loudly on Wall Street after Macy’s reported weak results and slashed its forecast of revenue and profit for 2016. Investors were already nervous; Gap, Victoria’s Secret, and Costco had all reported bad news last week. The Macy’s announcement tipped the balance, and investors stampeded away from the industry; Macy’s stock dropped 15%, Michael Kors fell 12%, Target and Kohl’s each fell over 5%, and many other major retailers took a beating.
But one of them did not. The eMarketer research firm yesterday released data to Fortune that pretty well explains what’s going on. It shows that Amazon, already America’s largest online retailer by far, is widening its lead. That’s why Amazon stock was up 1.5%. Investors don’t dislike retailers. They just dislike retailers who aren’t Amazon. How the rest will climb out of this hole is the great question they all face.
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What We're Reading Today
Brazil Senate suspends President Rousseff
By a vote of 55 to 22, the Brazilian Senate voted to move forward with the impeachment trial of President Dilma Rousseff. She will be suspended from office and Vice-President Michel Temer will take the reins in her absence, which will likely run through the August Olympics. Rousseff is accused of manipulating government finances to hide the country’s true deficit ahead of the 2014 election.
Paul Ryan and Donald Trump to meet today
The two will begin a conversation that they hope will help unify the Republican Party. It’s only the second time House Speaker Ryan has met with Trump, the presumed GOP presidential nominee, in person, the last being in 2012. The stakes are high for both; a unified party would improve election prospects for Trump and for Republican candidates in the House.
Nissan to buy $2.2-billion stake in Mitsubishi
Mitsubishi, cleaning up after a vehicle emissions cheating scandal, gets the cash infusion from one of its biggest partners, Carlos Ghosn‘s Nissan, which will own over a third of Mitsubishi. The two were already cooperating on manufacturing; this deal will broaden that partnership into technology, among other areas, at a time when Ken Kobayashi‘s company needs the funds to address expected recalls and fines.
Upheaval at Theranos
The troubled blood testing lab will part ways with president and COO Sunny Balwani. The decision to step down by one of Theranos’s key early employees, announced as a retirement, comes as CEO Elizabeth Holmes fights for the company’s future; U.S. regulators are investigating the efficacy of Theranos’s technology. The company also added three new board members: Dr. Fabrizio Bonanni, Dr. William Foege, and former Wells Fargo CEO Richard Kovacevich.
Building a Better Leader
Regulators will release workplace injury and illness data
The Labor Department says the employer-specific information will help reduce the number of workers who suffer work-related injuries or illnesses, estimated at three million annually. But businesses think it will be used against them by unions and lawyers.
Hillary Clinton claims she will cap child care costs…
…at 10% of income if elected. Many U.S. families spend more on child care than on rent. Will child care costs become a hot-button topic in the election?
Watch out for the dangers of angel investors
Too many angel investors can scare away venture capital.
One cause of increasing crime: Viral videos
FBI Director James Comey says some police hesitate to act, fearing they’ll be caught on a video that’s streamed to the world. Comey believes this fear is affecting policing in areas with rising crime rates, such as Las Vegas and Chicago.
Hospitals yet to see breaks in Valeant drug prices
At a recent Senate hearing, Valeant director and investor Bill Ackman promised heart-drug price cuts expected to be as much as 30%. But top heart hospitals across the nation say they have yet to see a price change. New CEO Joseph Papa says the pricing committee has met and hopes to announce action soon.
Lyft ups settlement proposal
A federal judge last month rejected a $12.25-million proposed settlement between Lyft and former drivers who claimed the ride-hailing service misclassified them as contractors instead of employees. Logan Green‘s company has more than doubled the proposed settlement price to $27 million. The designation of drivers is critical to the business model of Lyft, Uber, and other ride-hailing companies.
Up or Out
Fortune Reads and Videos
Belgian police warn Facebook users…
…on using reaction emoticons. Apparently, it’s a privacy issue. The police claim Facebook uses the emoticons to time when to send ads.
The majority of Nike’s U.S. employees are minorities
The sports apparel maker sought a more diverse workforce to improve the creative process and reflect its global footprint.
Michael Bloomberg: The GOP is no longer the party of business
Bloomberg adds that the Republican Party has spent the last few years trying to attract union members.
Larry Ellison just gave $200 million for cancer research
It will fund the creation of the Lawrence J. Ellison Institute for Transformative Medicine of USC.