Power Sheet – April 18, 2016
Biggest leadership news of the coming week, most likely: Tomorrow’s New York primaries. The winners aren’t in doubt, but the details will be revealing. In his home state, Donald Trump may, for the first time, attract more than 50% of the votes in a primary or caucus; the Real Clear Politics poll average shows him with 52% support. He could also win all 95 of New York’s delegates, which are awarded by congressional district, making this his best day by far of the past two weeks. Another significant possibility is that John Kasich could beat Ted Cruz, denouncer of “New York values,” for second place; polls show them essentially tied. Among the Dems, Hillary Clinton will almost certainly beat Bernie Sanders, but she’d better do it by at least 10 points to make a decent showing.
Told ya so of the week: OPEC oil ministers meeting in Doha, Qatar, over the weekend did not agree to freeze production. Some of us went out on a limb last week predicting this outcome, arguing that the anti-agreement forces that are always present in cartels were too strong. This they proved to be. Iran stayed away from the meeting, making clear that it intends to pump all the oil it can; the remaining members decided they could only lose by agreeing to freeze production in an effort to raise prices. Oil investors last week expected the opposite outcome, pushing prices up in anticipation of an agreement. Prices plunged this morning in early trading.
Most intriguing fast-food idea of recent weeks: A McDonald’s franchise owner recently broke ground for a real-world laboratory unit in St. Joseph, Missouri, continuing CEO Steve Easterbrook’s program of creative experimentation as he turns the company around. Among the massive, 6,500-square-foot restaurant’s features: table service, arm chairs, sofas, kiosk ordering, infinitely customizable burgers, and the concept that will draw the most attention, endless fries. As one blogger observed, that could be heaven or hell.
A trend to watch this spring: As corporate annual meeting season gets intense, watch say-on-pay votes. Of the top 250 companies in the Fortune 500, 101 are asking shareholders to approve the pay of the CEO and four other highest-paid officers. Shareholders have voted yes at the 20 companies that have met so far this year. The issue is hot after shareholders of British Petroleum (on the Fortune Global 500, not the Fortune 500) last week rejected CEO Bob Dudley’s pay package.
Most depressing day this week: Today, tax day, not because we Americans must file tax returns by today but because we’re reminded of Washington’s continuing monumental leadership failure in not reforming a corporate and personal tax code that is clearly impairing economic growth.
Most inspiring day this week: Today, Boston Marathon day, because we’re reminded of the tremendous, selfless leadership shown by scores of ordinary people in combining and self-organizing to help victims of the terrorist bombing three years ago. Here’s hoping that leadership continues to reveal itself when it’s needed most.
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What We're Reading Today
Amazon Prime offers monthly memberships
In a direct attack on Reed Hastings's Netflix, Amazon will begin to offer Amazon Prime memberships on a monthly basis as well as annually. Amazon Prime includes free shipping on Amazon purchases, music, and a slate of TV shows and movies. Jeff Bezos's company is also introducing a monthly subscription for just TV and movies at $8.99 a month, a dollar less than Netflix's new pricing. CNNMoney
Yahoo suitors bow out
A number of Yahoo suitors decided not to bid for the company's core businesses by today's deadline. Time Inc. (Fortune's parent), Alphabet, Comcast, and AT&T were among companies interested in Marissa Mayer's company but reportedly did not bid. Lowell McAdam's Verizon Communication appears to be the frontrunner, with a number of private equity firms still considering a bid. WSJ
Brazil takes the next step to impeach Rousseff
The lower house of Brazil's Congress yesterday voted overwhelmingly to impeach President Dilma Rousseff. The Senate would next have to vote twice to remove her from office. If the Senate agrees to vote on the motion, which it's expected to do in a few weeks, Rousseff would have to step down for 180 days. Vice President Michel Temer would likely replace Rousseff during that time. The Guardian
OPEC meets without a resolution...
...to freeze oil production in order to maintain or raise prices. Iran, recently freed from international sanctions, did not attend the meeting; President Hassan Rouhani plans to increase production until the country reaches pre-sanction levels. Iran's absence led Saudi Arabia to withdraw support for an agreement to hold production at January levels. Fortune
Building a Better Leader
41% of all super PAC funding comes from 50 donors
More than 70% of that has come from 36 Republican donors. Donors have given $607 million to super PACs this election cycle. Washington Post
It's okay to do some work for free...
...but make sure you're benefitting. If you're launching a new product and you need testimonials, or the people who want to "pick your brain" can offer something in return, then it's worth considering. Fortune
As the market turns sour, investors question...
...the quantities of stock options tech companies pay to employees. NYT
Costco fruit linked to hepatitis A outbreak
Officials in Canada have linked a hepatitis A outbreak to frozen fruit from Nature’s Touch. The organic berry and cherry blend was sold in Canadian stores and linked to 12 cases of hepatitis A. Craig Jelinek's Costco and authorities are trying to determine if the ingredients have also been used in products for the U.S. Fortune
The EU investigates Google Android
European Union antitrust chief Margrethe Vestager is investigating whether Google has hindered competition and innovation in apps by forcing phone makers and operators to include certain apps on Android phones. Potential fines could reach $7.4 billion. Reuters
Southwest Airlines responds to criticism...
...after a California college student was removed from a plane for speaking Arabic. After a phone conversation in Arabic, Khairuldeen Makhzoomi was asked by a Southwest employee why he was speaking the language and was then removed from an April 9 flight. Gary Kelly's Southwest said its response was a safety issue, but it does not condone discrimination. USA Today
Fortune Reads and Videos
Internet of clothing is created...
...with a new deal between label maker Avery Dennison and manager of digital identities Evrythng. You'll be able to check the manufacturing history of your pants or receive smartphone content based on your shirt. Fortune
Toyota, Sony hit by massive Japan quake
Both companies may have to cut production. Fortune
Bill Gates to U.S. government: Invest in R&D
His call comes as corporations have dramatically reduced R&D spending. Fortune
22 U.S. companies are excluded from the world's biggest wealth fund...
…because they rely on coal. Norway's sovereign wealth fund expects to ban investment in over 120 companies worldwide. Fortune
Quote of the Day
"Nobody has been more assiduous than [Ted] Cruz at staying on the same page as the conservative base of the Republican Party...That said, it was also the man meeting the moment. He was always a constitutionalist conservative, and then constitutionalism became cool among conservatives." -- Ramesh Ponnuru, senior editor of National Review, who first met Cruz when they were students at Princeton University, discussing the presidential candidate's conservatism. NYT
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|Produced by Ryan Derousseau|