Power Sheet - June 10, 2016
Updating four important leadership stories we’ve been tracking:
–Donald Trump, deadbeat? Stories have circulated for years that Trump routinely stiffs contractors who work on his projects, in some cases supposedly telling them that though he’s not paying them, they’ll make money just by being able to say they worked on a Trump building. Those stories had gone largely unreported because no news organization had done the necessary voluminous reporting. Now the WSJ this morning and USA Today yesterday have documented hundreds of such cases – lawsuits, liens, judgments, and other filings. Trump responds that when contractors don’t do their work satisfactorily or on time, he docks their pay – “and that’s what the country should do.” But in several cases, the newspapers show, the general contractor had approved the work, and in some cases Trump later rehired or tried to rehire contractors who had sued him for non-payment.
USA Today reports that Trump has been involved in an extraordinary 3,500 lawsuits over the past three decades. That’s a lot publicly available documents. Expect them to be a rich trove of material for the media and for Hillary Clinton.
–Bob Iger plays offense. With Clinton, Bernie Sanders, and even Trump lambasting big companies, few CEOs want to speak up in defense of corporate America. But Iger, CEO of Walt Disney, is willing. Yesterday he told CNNMoney that U.S. companies are paying too much tax, that the tax system is “ridiculously complex,” and that “the tax base should be lowered, and the loopholes should be closed.”
After Sanders ripped into Disney two weeks ago in a campaign speech near Disneyland, Iger ripped into Sanders with a biting Facebook post. “He picked the wrong company to criticize,” Iger told CNNMoney yesterday. We’ll see if Iger has reason to regret putting his head above the parapet. I bet he won’t.
–Rodrigo Duterte will pay you $108,000 to kill a drug lord. If that offer came from another drug lord, no one would be surprised. But it comes from the president-elect of the Philippines. The legal process is too slow for Duterte, who promised voters he would clean up crime by doing whatever it takes. As mayor of Davao, he was widely believed to have encouraged free-lance squads to kill criminals. In response to his recent bounty offer, says the incoming chief of the national police, drug lords were offering bounties of $1.1 million to anyone who kills Duterte or the police chief. The chief’s response to the drug lords’ bounty offer: “Bring it on. When we assume office on June 30, let’s see if you can still pay for our assassination.” This is getting ugly fast. And Duterte hasn’t even been inaugurated.
–Bill de Blasio’s scandal problem gets worse, again. On Wednesday the FBI arrested the head of New York City’s correction officers’ union and charged him with fraud. Through a web of connections too Byzantine to detail here, this could lead back to the mayor. Already at least five investigations are underway by six agencies or prosecutors, most of them related to fundraising by de Blasio or organizations connected to him. I keep updating this situation because it’s a textbook example of a leader facing a mushrooming problem and trying to regain control of the narrative. De Blasio still hasn’t done it.
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What We're Reading Today
Sumner Redstone seeks new Viacom directors
He’s doing it through National Amusements, the company he controls and through which he owns 80% of Viacom and CBS. Potential new directors reportedly include Huffington Post co-founder and Internet investor Kenneth Lerer, former Sony executive Nicole Seligman, and former Discovery Communications exec Judith McHale. Redstone’s objective is to force out Viacom chairman Philippe Dauman, a longtime Redstone ally and confidant until recently; Redstone may also be contemplating recombining Viacom and CBS. Viacom’s board has vowed to fight any ouster attempt. WSJ
Only 8 million of the 70 million U.S. cars with Takata airbags…
…have been fixed. Fixing all of them could take two years. Takahiro Hachigo‘s Honda has been the target of particular criticism from regulators and experts because it was the largest user of Takata airbags, and some say the company knew about safety issues years ago, which Honda denies. Fortune
Donald Trump and his businesses have faced a large number of lawsuits and mechanic’s liens over the years from small businesses, contractors, and former employees arguing that he didn’t pay them. Trump allegedly tied up the cases in court for years, hoping the plaintiffs would give up or go out of business. Trump responds that he withholds payment when workers do their work poorly or late. USA Today
Muhammad Ali’s memorial service is today
Bill Clinton, who awarded Ali the Presidential Citizens Medal in 2001, will deliver a eulogy. Ali died last week at 74. His memorial service will be held at what is now known as the KFC Yum! Center, the building where he began his boxing career at age 12. Thousands are expected. TIME
Building a Better Leader
Using anonymity to hire for diversity…
…has advantages. But B Byrne, founder of cybersecurity company Clef, says instead think about what a candidate can teach you that you don’t already know. Inc.
Startup CEOs shouldn’t get over-exuberant about their ideas
It can wear out your employees and yourself. Fortune
Employee training isn’t enough to resolve conflict
The dynamic underlying the conflict must also be addressed, or the problem will rise up again. Knowledge@Wharton
Charles Koch changes his tune
The billionaire known for his support of conservative causes plans a national campaign aimed at ending the partisan divide. The “end the divide” campaign looks to bring people together to discuss ideas and agree on solutions. The campaign will still support Koch‘s free-market beliefs. He has also disbanded a research arm that investigated Democratic candidates and liberal groups. USA Today
P&G’s attempt to innovate again
Procter & Gamble hasn’t developed a new billion-dollar brand in over a decade. New CEO David Taylor has vowed to change that by moving innovation to product managers closer to the customer than senior executives. P&G has lost market share in over half its products in 14 of the past 17 quarters. Fortune
VW manager may have encouraged employees…
…to get rid of evidence. German prosecutors are investigating whether the manager instructed employees to destroy documents in the days just before the emission cheating scandal broke. Such action would show that senior managers understood the issue’s severity — another headache for Matthias Müller‘s company as it negotiates with U.S. authorities over potential punishment and fines. NYT
Up or Out
Tom Perkins, co-founder of Silicon Vally venture capital firm Kleiner Perkins Caufield & Byers, died last night at age 84. Fortune
Ralph Lauren has poached Coach CFO Jane Hamilton Nielsen for the same role. WSJ
Fortune Reads and Videos
Hillary Clinton’s campaign called for Trump…
…to delete his Twitter account, sparking an epic Twitter war between the candidates. Fortune
Twitter has responded to a recent data breach…
…by locking people’s accounts until they update their password. The company still doesn’t know how 32 million accounts were compromised. Fortune
Disney’s Bob Iger attacks U.S. tax code
He says companies pay too much tax, and the tax system should be simplified. Fortune
VP Joe Biden responds to Stanford rape victim
In an open letter to the unnamed survivor, Biden says “I do not know your name—but I will never forget you.” Fortune
Former Louisiana Governor Bobby Jindal turns 45 today. Biography
Charles Rangel, a U.S. representative from New York since 1971, turns 86 tomorrow. Biography
Former President George H.W. Bush celebrates his 92nd birthday on Sunday. Biography