Four high-profile leadership stories advanced significantly yesterday. All have been developing for years. Here’s what’s happening now:
-Yahoo added two new directors yesterday, indicating that CEO Marissa Mayer and the board will continue to battle Jeff Smith’s Starboard Value, which wants Yahoo to sell its operating businesses as soon as possible. The move achieves two goals, adroitly covering Yahoo’s bases. First, Starboard is threatening a proxy fight if Yahoo doesn’t act fast enough, and it has until March 26 to name a competing slate of directors. By adding two directors, replacing Charles Schwab and PayPal co-founder Max Levchin, who resigned recently, Yahoo increases the number of board seats Smith would have to win in order to take control. Second, the two new directors – former Morgan Stanley exec Catherine Friedman and former Broadcom CFO Eric Brandt – share deep expertise in finance. If Yahoo does end up selling operations – a committee of independent directors is fielding offers – that expertise could come in handy.
–Ray Dalio’s Bridgewater Associates, the world’s largest hedge fund, named a new co-CEO. It’s the latest move in what the firm blandly called “a planful transition from a founder-led boutique to a professionally managed institution.” Behind the scenes was recent tension between Dalio, 66, and his presumed heir, co-CEO Greg Jensen, 42. It reached a point, the WSJ reported, that they asked senior employees to vote on their behavior. The new co-CEO is Jon Rubinstein, a long-time associate of Steve Jobs at NeXT and Apple. Some observers noted that a recent trend has run the opposite way, with high executives moving from finance to tech. But the larger trend may be that the distinction between the industries is disappearing. Increasingly, every company is a tech company. Some just realize it sooner than others.
-A Brazilian state prosecutor charged former president Lula with money laundering and identity fraud. The corruption scandal in Brazil just keeps growing, and this is by far the biggest name so far charged with a crime. By Brazilian standards, the charge is piddling—that Luiz Inacio Lula da Silva, as no one calls him, secretly owned a luxury beachfront condo; he denies it. But prosecutors often build big cases from small beginnings, and this charge could conceivably lead into the much larger investigation of corruption at the state oil company, Petrobras, or to Lula’s political protégé, President Dilma Rousseff. Corruption is so rampant in Brazil, including in the judiciary, that we must be cautious in concluding anything. But a mushrooming investigation combined with a shrinking economy and an angry populace suggest that bigger changes are ahead.
–Aung San Suu Kyi’s party nominated a close adviser to be Burma’s president, a critical move in a delicate process of taking control of the government. Her National League for Democracy won a landslide victory in parliamentary elections last year, but she can’t be president, barred by a constitutional provision that the previous government created to keep her out. She has described her role as “above the president,” which grates on Western ears, though everyone realizes it’s accurate. After 27 years of campaigning for democracy, she has won, and the world will be watching what happens now.
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What We’re Reading Today
FBI claims Apple “raised technological barriers”
…to thwart authorities. In a filing, the FBI adds that Apple has positioned itself as the “primary guardian of Americans’ privacy,” as it turns its back on the courts and laws. Tim Cook‘s Apple continues to fight an order that it build an operating system specifically designed to get past its security features, in order to help the FBI access the iPhone of the shooter involved in the San Bernardino attack in December. Apple called the FBI’s latest claims insulting. Reuters
Candidates tone down attacks in GOP debate
In a much cooler version of a Republican debate, Ted Cruz and Marco Rubio reduced the number of attacks on each other and against Donald Trump. And Trump gave his most reserved performance, hardly mentioning his poll numbers and calling for party unity. The calm offered more time to speak about policy, which Trump still struggles with. Fortune
Yahoo names two new board members, setting up potential proxy fight
Yahoo named former Morgan Stanley banker Catherine Friedman and CFO of Broadcom Corp. Eric Brandt to its board despite activist investor Jeff Smith‘s request for seats. This sets up a potential proxy fight, as Smith’s Starboard Value could nominate nine people to run against Yahoo’s current board. Smith is urging Yahoo to sell the Internet business and he has expressed a lack of confidence in CEO Marissa Mayer. Los Angeles Times
Congress to Valeant: Where are the documents?
House Committee on Oversight and Government Reform Chairman Jason Chaffetz and Representative Elijah Cummings wrote to Valeant CEO J. Michael Pearson, asking why the drug company hasn’t turned over information requested in August. The documents relate to the drug-maker’s strategy of buying niche drugs and increasing their prices dramatically. Valeant, which has already provided 78,000 documents related to the investigation, says it’s working to get the rest to the committee. Bloomberg
Building a Better Leader
Gen Xers may be the most engaged employees
In a new poll, 52% of executives said that Gen X had the most engaged workers, while only 23% felt that way about Millennials. HRE Daily
Some cities are offering to pay your student loans
But don’t expect to live in the likes of Chicago or Boston. Think smaller. Fortune
CEOs who report to an independent chairman…
…earn 20% less than those who report to themselves. That comes out to an average of $2.9 million less per year. WSJ
Honest Co. product contains ingredient it promised to avoid
The cleaning supply and consumer products company that touts its chemical-free products may have sodium lauryl sulfate (SLS) in its laundry detergent. Jessica Alba‘s company posts SLS as the very first ingredient on a list of things it says it doesn’t use and suggests to keep out of your home. Honest disputes the claim brought by the Wall Street Journal, which commissioned two independent lab tests on the detergent. WSJ
Shocking accusation riles J. Walter Thompson
Former chief communications officer of JWT Erin Johnson claims in a lawsuit that CEO Gustavo Martinez made sexist and racial slurs against employees. She also claimed that Martinez said that one female employee should be “raped into submission.” Johnson says when she reported the behavior to JWT and its parent company, her bonus was cut and she was excluded from meetings. Martinez denies the accusations. Fortune
Brazil seeks the arrest of its former president
Prosecutors claim that Luiz Inacio Lula da Silva laundered money to conceal the purchase of an apartment. Last week, investigators raided Lula’s home. He is among the most prominent figures caught up in a corruption scandal involving the country’s oil company Petrobras. While the cases are separate, prosecutors have asked to place him in “preventive custody.” BBC
Up or Out
Hedge fund Bridgewater Associates has named former Apple executive Jon Rubinstein as its co-CEO. Barron's
Houghton Mifflin Harcourt has named Joseph Abbott its new CFO. WSJ
Fortune Reads and Videos
Vladimir Putin’s former media chief died…
…last year in Washington due to blunt force trauma to his head and neck, according to authorities. The results could turn the investigation of Mikhail Lesin‘s death into a murder probe. Fortune
Hudson’s Bay plans to invest over $1 billion…
…in German chain Kaufhof. The Saks owner wants to expand in Europe. Fortune
Kohl’s plan to revive its business involves…
…relaunching its top in-house apparel brand, Sonoma. Fortune
Trump calls Tiananmen Square protest ‘a riot’
China’s government, no doubt, prefers Donald Trump‘s wording. Fortune
Rupert Murdoch, founder and executive chairman of News Corp., turns 85 today. Biography
Mitt Romney celebrates his 69th birthday tomorrow. Biography
Founder of Southwest Airlines Herb Kelleher turns 85 on Saturday. Biography
Jamie Dimon, CEO of JPMorgan Chase, celebrates his 60th birthday on Sunday. Biography
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|Produced by Ryan Derousseau|