Today we are publishing part two of our story on the Sony hack, which among other things shows that the company was woefully unprepared for the cyber attack, despite having been a popular target of hackers for a decade. You can read it here. If you missed part one, it is here. (Apologies to those of you who encountered a broken link yesterday). We’ll publish part three tomorrow. Or you can read the whole thing in the magazine, on news stands next week.
The story is a chilling narrative that needs to be read by anyone in business today. In our recent poll of Fortune 500 CEOs, 10% said cyber security is the single biggest challenge their company faces; another 56% said it was one of the top three or four challenges. Only one respondent said it is not yet a significant challenge – and we suspect that fellow has his head in the sand.
But while companies recognize the challenge, many — like Sony — are clearly not prepared to deal with it. This story, the product of six months of reporting by Fortune’s Peter Elkind, should serve as a wake-up call.
More news below.
• Nadella sets out Microsoft agenda
An internal memo by Microsoft CEO Satya Nadella has leaked and named three of the software giant’s “bold ambitions”: reinventing productivity, building the intelligent cloud platform, and creating more personal computing. Fortune deduces those pillars are a reiteration of a cloud-first-mobile-first slogan that the CEO has preached during his first 16 months leading Microsoft.
• Could Humana be up for sale?
We’ve already noted the trend of health industry consolidation that is in a part a reaction to the Affordable Care Act, as hospitals and insurers seek greater scale to improve their profitability prospects. Now it appears Humana is pursuing a deal to sell itself and could reach an agreement next week. Interesting timing, as the Supreme Court on Thursday ruled the government could provide tax subsidies for Americans to buy health insurance.
New York Times (subscription required)
• Valeant may soon bid for Zoetis
Valeant Pharmaceuticals reportedly made a preliminary approach to buy animal-health giant Zoetis, which was spun off from Pfizer in 2013 and is the largest seller of vaccines and medicines for livestock and household pets. No word yet on the company’s reaction. Zoetis had a market capitalization of about $25 billion when Valeant’s approach was reported.
WSJ (subscription required)
• Wall Street pay looks out of sync
Wall Street pay is a popular target of derision in the United States even as salaries for high-paid executives continues to climb. But the paycheck of the top executive of Japan’s largest brokerage does raise questions about the culture of compensation in the U.S. Nomura’s CEO pay package was worth $2.65 million for the latest year — and there doesn’t seem to be a single top executive among Wall Street’s biggest firms paid anywhere close to that total.
• IMF wants Fed to drop the dots
The International Monetary Fund has advised the U.S. central bank remake its communications policy, saying the “dot plot” of interest rate projections that the Fed issues every three months is confusing.”It is not straightforward to connect the dots to get a coherent vision of the path ahead,” IMF researchers wrote. The dot plot shows the individual rate projections published anonymously by Fed policymakers, often leaving analysts guessing which dot belongs to Chair Janet Yellen.
Around the Water Cooler
• Why Coke’s CEO doesn’t dine alone
Coca-Cola CEO Muhtar Kent says he is often asked about the single attribute that he thinks is most accountable for his success in business. His simple response? “I never dine alone.” Kent believes that each moment of his day is an opportunity to start or strengthen a relationship, and those ties are the “single-most important” element that he brings to his role as chairman and CEO.
• Facebook diversity problem barely budges
Facebook released its employee demographics and there were some disappointing stats that suggest the social network still isn’t nearly as diverse as its user base. Hispanics represent just 4% of the company’s workforce in the U.S. and only 2% are African Americans, both the same as last year. Facebook only saw a slight improvement on the gender front: 68% of Facebook employees are men, a slight improvement from last year’s 70%.
• Wall Street’s perennial glass ceiling
Bloomberg points to three female executives that could all potentially one day break an important barrier: become the first female CEO at one of the 22 largest U.S investment banks or financial firms. Problematically, other women have gotten close to the top of a Wall Street bank only to get derailed or decamp for other offers. Several factors are to blame, including the fact that parity still hasn’t occurred among MBA graduates and women at investment banks opt to leave because they see few opportunities for advancement.