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CEO Daily: Thursday, June 25

June 25, 2015, 10:45 AM UTC

This morning, we publish the first installment of an extraordinary 12,000 word story by Fortune’s Peter Elkind about the now famous cyber attack against Sony Corp. We recommend you read it. It is a chillingly compelling, behind-the-scenes narrative of the events leading up to the attack. Were it not about them, the folks at Sony Pictures might make it into a movie.

More importantly, the story, based on six months of in-depth reporting, contains important lessons that every company needs to learn – and many still haven’t. Cyber security is one of the critical challenges of our era. Attacks in the past year against Sony, Anthem, J.P. Morgan, Target, Home Depot and most recently, the government’s Office of Personnel Management, should have made it abundantly clear that this is an existential threat to business, and it isn’t going away.

It’s also a critical challenge for foreign policy. In the nuclear era, we have avoided conflagration because of a strategy of deterrence – nations know if they use nuclear weapons, retaliation will be swift and certain. But in the cyber era, we have no such strategy. The U.S. government may be convinced North Korea is behind the Sony attack and China is behind the OPM attack – but what price has either country paid?

The full Sony story appears in the July issue of Fortune, on newsstands next week. In the meantime, you can read the first installment here, and my editor’s note here. We’ll publish part two online Friday, and the rest Saturday.

An update from yesterday. I wrote that Jim McNerney’s pay package of $29 million last year exceeded Jeff Immelt’s of $18.8 million. But a new analysis out this morning by the Wall Street Journal and the Hay Group puts Immelt’s 2014 total pay at $37.3 million, reflecting a change in the value of his deferred compensation and pension — thus exceeding McNerney’s by more than $8 million. This is a tough game to score.

Enjoy the day. And mind your cyber hygiene.

Alan Murray

Top News

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The Wall Street Journal's annual pay survey found that all 10 of the CEOs that posted the best shareholder returns were paid more than they got a year earlier, while all but two of the 10 worst performers got pay cuts. Two of the best paid CEOs — Viacom's Philippe Dauman and General Electric's Jeff Immelt — got higher compensation even though the value of their shareholders' investments in the company declined.  WSJ (subscription required)

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On Wednesday, investors' fears over the future of Greece's economy caused a falloff in U.S. stock prices and today, concerns about that nation's talks with creditors dented stock markets abroad. European stocks were hurt on Thursday by the lack of progress in negotiations on a cash-for-reform deal for Athens pushing investors towards safe-haven German Bunds. The talks appeared to stumble on Wednesday.  Reuters

Around the Water Cooler

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