Disney’s Bob Iger has become the latest CEO to fight back against Bernie Sanders’ attacks on his company.
“Anybody making a living wage at Disney?” Sanders said Tuesday in a speech to 1500 people in the Anaheim convention center. “It’s an example of what we are talking about when we talk about a rigged economy. Disney pays its workers wages that are so low that many of them are forced to live in motels because they cannot afford a decent place to live. People are asking, is it right that at Disney you have a CEO making $46 million while they are paying workers starvation wages?”
In a private Facebook post, Iger shot back: “To Bernie Sanders: We created 11,000 new jobs at Disneyland in the past decade and our company has created 18,000 in the last five years. How many jobs have you created? What have you contributed to the US economy?” The Facebook post was obtained by TheWrap. Iger is a supporter of Hillary Clinton.
Meanwhile, Bill Clinton, who clearly relishes campaigning much more than his wife, spent a full thirty minutes in New Mexico defending his economic record to a Sanders supporter who was born around the time Clinton took office. You can read the full account here.
More news below, including the shut-down of McDonald’s headquarters because of a minimum wage protest.
• Oil Be Back
Someone in Asia paid $50 for a barrel of oil for the first time in seven months overnight. It feels very different from the day in 2014 when oil fell below $50 for the first time in five years, and even more different from the day in 2008 when someone first paid $100. That’s because it indicates a market coming back into balance, rather than spinning out of control. Yesterday, data showed U.S. crude inventories are finally falling. Brim-full storage tanks have been a visible symbol of the global glut, but the arrival of spring and cheap gas prices is a combination that never fails to lift U.S. demand, while wildfires in Canada, militants in Nigeria and, not least, failing shale producers are restricting supply. Big round numbers always command more attention in markets than they’re worth fundamentally, but there are producers out there, such as Pioneer Natural Resources, who’ve said they’ll start adding drilling rigs again if prices are above $50 and inventories are falling (albeit not before 2017). That’s the reality of U.S. shale becoming the world’s swing producer, which is one of the main legacies of the price war Saudi Arabia unleashed in 2014. Fortune
• Trump Edges Clinton
After months of pundits and politicos saying that Donald Trump couldn’t possibly beat Hillary Clinton in a general election, the polls are starting to suggest that he could. Leaving aside the personal merits of the GOP nominee-apparent, the factors behind the narrowing of the gap include the marked difference in internal party dynamics: Republicans have started to unite behind Trump, while Bernie Sanders’ refusal to give up the race means that the Democrats are now the ones looking angry and divided amongst themselves. Meanwhile, Hillary Clinton’s vulnerabilities continue to be regularly paraded, exemplified this week by a damaging new report by the State Department’s inspector general into her e-mail arrangements. Fortune, NYT
• Safe Harbor’s Successor Under Threat
Authorities in Ireland cast doubt on the legal argument that Facebook, Google, Amazon and others have used to enable data transfers between Europe and the U.S.. Since the E.U.’s top court struck down the former “Safe Harbor” set of standard regulations on privacy grounds, U.S. groups have relied on so-called “model contract clauses” to keep storing European customers’ data in the U.S. (these being much cheaper than building up whole new data infrastructures in Europe). However, Ireland’s data protection commissioner is now effectively inviting the European Court of Justice to rule on MCCs too, afraid that they don’t offer adequate redress to customers who feel their rights have been infringed. Financial Times, metered access
• McDonald’s Protests
Hundreds of protesters marched through pouring rain to call for higher wages and union rights at McDonald’s Wednesday, leading it to shut down its HQ a day before its annual meeting. The suburban Chicago campus was shut for the third year in a row because of protests centered on today’s shareholder gathering. Employees and their supporters are seeking a $15-an-hour minimum wage and better benefits. Management has mused that it may be cheaper to get robots to flip and serve their burgers at that price. The protests come in a week when Walmart acknowledged that paying employees more had resulted in a ‘better customer experience’ all round, contributing to a remarkably strong set of earnings. Fortune
Around the Water Cooler
• Nikesh Cashes In
Nikesh Arora, the man hired from Google to be Softbank’s venture capitalist-in-chief, was paid $73 million (just over 8 billion yen) in the Japanese company’s latest fiscal year, according to Bloomberg. While that’s more than enough to figure in a Bernie Sanders speech, it’s still less than half he got last year, when his package included a big signing bonus. One of the most conspicuous things about Softbank is that its share price has fallen 20% since Arora joined (the bottom line in 2016 was also the lowest in three years, despite 50% revenue growth since 2014). This goes a long way to explaining why a group of investors are looking to get him out. Softbank’s founder, Masayoshi Son, said Thursday he continues to have “complete trust in Nikesh and one thousand percent confidence” in the man widely tipped to succeed him as CEO. In his defense, Arora has done his best to align his interests with shareholders, having made a $483 million bet on Softbank’s shares last year, the biggest insider share purchase in Japan in over a decade. Bloomberg
• Theranos Class Actions Arriving in 3, 2, 1…
Theranos has been hit with its first class action suit from lawyers representing patients who were subjected to treatments by Edison, the proprietary blood testing technology that has since been exposed as faulty. The suit, filed in the district court of Northern California alleges that patients who used Theranos services were either subjected to “unnecessary or possibly harmful treatments” or failed to receive necessary ones as a result of misdiagnoses, according to The Verge. The suit has more than a whiff of a fishing trip—it will need to produce patients whose suffering actually backs up the allegations. Moreover, Theranos only used Edison in a fraction of all the tests it conducted (a fact acknowledged by the plaintiffs). Separately, the Wall Street Journals spreads the embarrassment from the scandal a bit wider today. It claims Walgreens, in a rush for growth, introduced Theranos to its stores in 2013 without ever testing the Edison technology itself. Verge, WSJ, subscription required
• KKR in for Takata?
Buyout firm KKR is in talks with Takata, the hapless maker of faulty airbag inflators, over a possible rescue. According to Nikkei, KKA has proposed taking a 60% stake in the company and has submitted a restructuring plan to its management, which has hired investment bank Lazard to advise it. It’s been clear for a while that the airbag inflator scandal was going to dilute, if not wipe out, the current generation of shareholders. Over 50 million inflators have been recalled so far, and the Department of Transport has confirmed another 35-40 million will need to be recalled by 2019. The company’s shares leaped over 20% in Tokyo Thursday in response to the report, which hasn’t been confirmed by Takata. Fortune
• Big Oil Faces Down Shareholder Motions
Shareholders at ExxonMobil and Chevron rejected motions at their respective annual meetings that would have asked the companies to compile detailed reports on how their assets could be affected by policy action to combat Climate Change. However, over 38% of Exxon shareholders and 41% of Exxon’s voted for the motions, reflecting a growing disconnect between those for whom the hydrocarbon industry is their life, and those for whom it’s just one of many sources of long-term income. While the motions have triggered some routine sparring between Climate Change apostles and deniers, the key point for investors is not whether you believe in anthropogenic Climate Change per se, it’s whether you think governments will follow through on their pledges at last December’s summit in Paris to limit the use of fossil fuels—a bet that depends on Chinese and Indian attitudes to pollution as much as academic arguments over fluctuations in the ice caps. That translates into material differences in outlooks across the sector. According to the Wall Street Journal, Exxon’s projection for global oil demand in 2050 is 28% higher than the forecasts of its rivals. WSJ, subscription required