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Power Sheet – May 31, 2016

Noteworthy news of power and leadership from the weekend (a long holiday weekend here in the U.S.) and expected in the week ahead:

-We’re almost done with the primaries! And it can’t happen soon enough. Virtually nothing happens this week (the Virgin Islands hold a Democratic primary). Interest, what’s left of it, will focus on June 7, a week from today, when California, Montana, New Jersey, New Mexico, and South Dakota hold primaries for both parties, and North Dakota holds Democratic caucuses.

Why should anyone care? After all, Donald Trump has clinched the Republican nomination, and Hillary Clinton has a virtual lock on the Democratic nomination. The remaining issue is how strongly Bernie Sanders performs. It’s still practically impossible for him to be the nominee, but if he again embarrasses Clinton with a win or a close finish in California, or more than one of the other states, he’ll take more power into the convention. There he could wield additional clout in writing the platform and potentially divide the party further if his supporters raise a ruckus. But if Clinton steamrollers him in all those primaries, her road becomes far smoother.

-Volkswagen reports earnings Tuesday, and we’ll see whether damage from the scandal is growing or fading. Events have not been going well for CEO Matthias Müller, who badly needs a bit of good news.

-OPEC meets Thursday in Vienna. Remember when the world used to tremble in anticipation of these meetings? No more. The oil cartel once again will not perform its only reason for being, which is to restrict production and thus raise prices. Of course OPEC’s largest member, Saudi Arabia, can argue that this is exactly what it wants – to keep pumping like mad in order to force prices down and drive high-cost producers, such as U.S. shale-oil companies, out of the market. As supply shrinks, prices will rise naturally. The Saudi’s can even argue that their strategy is working; U.S. producers have indeed been cutting production, and prices have risen. But – as prices rise, some of those producers will re-enter the market, putting new downward pressure on prices, and then what has OPEC accomplished?

The larger reality is that OPEC is losing power and relevance. The reasons: multiplying sources of non-OPEC hydrocarbon supply, plus weakening discipline within the cartel as members secretly or openly produce more than their quotas. OPEC’s moment has passed, and it isn’t coming back.

-The Libertarian Party nominated its presidential ticket over the weekend, and for the first time in the party’s history it could actually be relevant. That’s because it nominated former New Mexico Governor Gary Johnson for president and former Massachusetts Governor William Weld for vice president, by far the most strongly credentialed ticket it has ever put forward. They have no chance of winning, but large numbers of voters say they’re open to a third-party candidate, and this will likely be the only third-party ticket on the ballot in all 50 states. It’s just possible that it could deny a state or two to Trump.

It will be instructive to see how the party handles more potential power than it has ever held. Step one is probably persuading candidates for party chairman not to take their clothes off onstage at the nationally televised convention.

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What We’re Reading Today

Viacom directors vow to fight any ouster 

Viacom’s six independent directors, anticipating an attempt by controlling shareholder Sumner Redstone to throw them out, say they’d fight any such attempt because it wouldn’t reflect Redstone’s true wishes. In a letter released yesterday, lead independent director Frederic Salerno says they would ask a court to determine Redstone’s mental competency. Like Viacom Chairman Philippe Dauman, who Redstone recently dismissed as a trustee of his health care trust, they argue he’s being manipulated by his daughter, Shari Redstone CNNMoney

Verizon workers to end strike

The workers in the company’s landline business and CEO Lowell McAdam agreed to a tentative deal that would provide 1,400 new jobs and raise pay just over 10%. The deal is a good one for the workers; the drawn-out strike was beginning to affect Verizon’s service. Some analysts speculate the deal could encourage McAdam to explore a sale of the landline business. Fortune

U.S. Chamber of Commerce pushes for a Republican Senate

The business lobby will launch an initiative today to ensure Republicans hold the Senate in November. Thomas Donohue‘s organization will work with senators, including some who haven’t endorsed Donald Trump, such as Senator Lindsey Graham, to raise funds for closely contested seats. Mitt Romney, Jeb Bush, and Carly Fiorina will also help with the initiative.  WSJ

Building a Better Leader

New overtime rules could doom prestige jobs

Young applicants battle for prestigious positions as assistants subjected to long hours and grueling expectations in fields such as publishing and movies (think The Devil Wears Prada). But the new overtime rule could endanger those jobs and the prospects of those who would hold them. NYT

You’re not heartless for firing a longtime employee… 

…assuming it makes financial sense for the company. Fortune

Paid leave for pet loss

A pet health insurance company is offering pet bereavement leave. Will other employers follow? Idaho Statesman

Worth Considering

Report questions the VA inspector general’s authority

A Senate report claims the Department of Veteran Affairs inspector general’s office lacks the independent authority needed to investigate the department and in at least one investigation had no benchmark for defining wrongdoing. It cited “systemic” problems that must be addressed. Secretary Robert McDonald, formerly Procter & Gamble’s CEO, has struggled to turn around the troubled department since taking over two years ago. USA Today

Banks look to downsize 

A switch in strategy has led a number of banks to change their plans to serve all financial needs. Michael Corbat‘s Citigroup wants to leave retail banking in 20 countries. John Cryan‘s Deutsche Bank and Tidjane Thiam‘s Credit Suisse are attempting similar reversals after the financial crisis showed that a bigger balance sheet didn’t necessarily protect banks. WSJ

Trump’s leadership style takes a bite out of his campaign

As a business leader, Donald Trump often pitted managers against one another, creating a competitive workplace. That same style has led to a competition internally between campaign manager Corey Lewandowski and Paul Manafort, who was brought in to oversee operations. The schism led to the departure of political director Rick Wiley after only six weeks. Fortune

Up or Out

Bruce Cleaver has been named CEO of De Beers, which is controlled by Anglo American.  Reuters

Fortune Reads and Videos

Pirate Bay co-founder likens Facebook to a private nation…

…and calls Mark Zuckerberg a dictator. Peter Sunde, whose company is a file-sharing site, says European leaders must do a better job ensuring Facebook plays by the rules. Fortune

Familiar characters spotted at Disney competitor’s park

You’ll see Marvel characters, Mickey Mouse, and Star Wars Stormtroopers — all of them Disney property — at a mall inside Dalian Wanda Group’s new theme park in China. Disney plans to take action. Wanda blames retailers for using the characters. Fortune

YouTube, Twitter, and Microsoft all sign…

…European hate-speech pact. The companies vow to react to illegal hate speech on their sites within 24 hours. Fortune

The latest episode of Silicon Valley hits close to home…

… on the tech industry’s thin skin and propensity to launch lawsuits. But there’s no way it could have known about the Gawker-Peter Thiel battle when it planned its latest episode, right? Fortune

Quote of the Day

“[W]e feel the responsibility to challenge in court what we honestly believe would be legally flawed removals…That is especially so because the flaw we see would be the inexplicable assertion that Sumner [Redstone] was acting of his own free will and with the mental competency to do so.” — Viacom lead independent director Frederic Salerno writing about the directors’ plan to fight any attempt to remove them from the board.  Reuters

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Produced by Ryan Derousseau
@ryanderous
powersheet@newsletters.fortune.com