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CEO Daily: Thursday 14th July

Fortune Brainstorm Tech ended yesterday with a tribute to Bill Campbell, the legendary executive coach to many of Silicon Valley’s most successful, who died in April. Investor John Doerr, Uber executive Emil Michael, MetricStream CEO Shellye Archambeau and Intuit CEO Brad Smith shared lessons they learned from him. Among them:


Don’t assume your employees respect you because you’re the boss. “Your title makes you a manager,” Smith recalls Campbell saying. “Your people will decide if you’re a leader.”


Lean into hard problems, because they won’t go away. Campbell helped Michael “be brave” about the layoffs necessary following the dotcom bust.


Great companies are bought not sold. Focus on building a great company, not finding a buyer, Campbell told his mentees. If you do the first, the second will follow.


Do the right thing. “Bill was focused on diversity, especially gender diversity, before it was cool,” Archambeau recalled.


You can read Erin Griffith’s full report on the session here, and all our Brainstorm Tech coverage at


I had to miss the final session and fly back to New York for an announcement of Time Inc.’s management restructure, when landed me in a new job: Chief Content Officer, overseeing all of the company’s editorial operations. I’ll remain editor of Fortune for now, and try to keep this newsletter going for as long as I am able.


More news below.


Alan Murray

Top News

Stocks Hit New High as Oil Tumbles

World stocks marched to a new high for 2016 Wednesday against a backdrop of earnings that ‘avoided disappointing’ rather than exceeded expectations (KFC owner Yum!’s release being upbeat more for what it said about the outlook for its Chinese business than anything else). The world economy seems set to be underpinned by the prospect of cheap oil for the foreseeable future, after the International Energy Agency forecast that the global glut would continue despite strengthening demand and despite the biggest drop in non-OPEC output in years. The market had appeared to be coming back into balance around $50 a barrel, but fell nearly $2 to below $45 after the IEA’s warning. It’s now back at $45.39.  JP Morgan has kicked off today’s earnings on a positive note with a clear beat.   Reuters

Wanda’s Movie Spree Reaches Paramount

The conglomerate run by China’s richest man Wang Jianlin, Dalian Wanda Group, is after a 49% stake in Hollywood studio Paramount. If completed, the deal would be Wanda’s second major dive into Hollywood, after its January buyout of production studio Legendary Pictures for $3.5 billion. That was Asia’s biggest deal in Tinseltown since Sony bought Columbia Pictures in the late 1980s. But don’t hold your breath. The sale may be supported by beleaguered CEO Philippe Dauman, but is reportedly opposed by controlling shareholder Sumner Redstone. The deal comes as Wanda pursues two big acquisitions in the movie theater space: it said earlier this week it was buying Europe’s largest cinema chain Odeon & UCI for $650 million, and is waiting for the shareholders of Carmike Cinemas Inc. to vote on its offer for their company and its 280 theaters in the U.S. And yes, it’s the same Wang Jianlin who has been making threatening noises about Disney’s incursions into China recently. Fortune


All Change in Whitehall, None From BoE

Theresa May made her first senior appointments (and sackings) as U.K. Prime Minister, making Boris Johnson in Foreign Secretary and–in one of the best Autocorrects of this or any other year–making veteran Euroskeptic David Davis ‘Secretary of State for Exciting the EU.’ Davis’ public statements so far suggest he will prioritize immigration controls over access to the Single Market (i.e., appeasing working-class voters rather than business). Treasury chief George Osborne has gone the same way as his deficit reduction plan. The aim appears to be to ensure that those who argued for Brexit own the process, so that blame can be correctly apportioned when the pre-referendum promises come up against the reality of negotiating with a spurned and resentful EU. Elsewhere today, the Bank of England decided not to fresh monetary stimulus for the first time since 2009, despite a heavy hint from Governor Mark Carney to the contrary last week. Fortune

Monsanto’s Plan B(ASF)

Monsanto has revived talks with Germany’s BASF about possibly combining their agrochemicals businesses, according to Bloomberg’s sources, as its search for a definitive response to the Dow-Dupont merger continues. Monsanto had rejected a reasonably rich merger offer ($122/share) from BASF’s German rival Bayer in May as too low. Bloomberg said that BASF would get newly issued shares from Monsanto in return for its agribusiness assets, which include both seeds, pesticides and fertilizers and generates over $6 billion a year in revenue. Monsanto shareholders may have chafed over the rejection of Bayer earlier—the shares haven’t traded near $122 in over a year—and they may not be best pleased the issuance of new shares in a move that appears aimed as much as protecting the management’s position as much as anything else. Bloomberg

Around the Water Cooler

Another Cut-Price Tesla

Tesla introduced a slightly cheaper version of its Model X SUV, in what appears to be an attempt to juice seocond-half sales to give the company a chance of hitting its full-year target. The Model X 60D is kitted out with a smaller 60 kilowatt-hour battery pack that cuts its driving range to 200 miles and, at $75,200, costs $9,000 less than the cheapest Model X currently available. The company had previously offered a similarly clipped and discounted version of the Model S sedan. Tesla has repeatedly fallen short of its sales and revenue targets, a problem that will assume greater importance if it wants to finance its mass-market ramp-up with debt rather than equity. WSJ, subscription required

Amazon’s Prime Day Was a Blowout After All

It looks like we may have spoken too soon yesterday. Amazon said its Prime Day pulled in 50% more orders than last year’s debut offering in the U.S.. Worldwide, orders were up more than 60%. It was also the biggest day ever for Amazon devices globally and new records were set for each Amazon device category including Fire TV, Fire tablets, Kindle e-readers and Alexa-enabled devices. The company had added a bunch more special offers in the evening of July 12th, which may have contributed to the discrepancy with initial estimates. The company’s shares still fell 0.7%, even so. Amazon

Dying Beyond Our Means

National health spending will average more than $10,000 a year for the first time this year, according to the Obama administration’s projections. After a couple of years of relatively low growth, spending rose 5.5% and is set to accelerate in the next decade, according to a report published in the Health Affairs journal. Officials preduct that it will rise by an average 5.7% a year through 2019, then by 6% a year from 2020-2025. By the end of that timeframe, health spending will account for 20% of GDP (by far the highest among advanced nations), and one in five Americans will be on Medicare, receiving an average of nearly $18,000 a year (50% more than last year). Although the Affordable Care Act may have put downward pressure on spending in some areas, the health sector won’t escape rising wage pressures in the broader economy, while the issue of drug pricing is set to remain as contentious as ever. NYT

Fat Lady Still Not Singing for VW

California rejected Volkswagen’s plan to fix the excess emissions of 85,000 vehicles with 3-liter diesel engines, raising the prospect that it will have to buy them all back. The California Air Resource Board said VW’s latest data submission was “incomplete” and “substantially deficient” for legal purposes. That means that the $14.7 billion settlement agreed last month is unlikely to be the final bill even for government claims against the world’s largest automaker. It will also embolden European regulators who are still pressing for better compensation terms for the (much bigger number of) European drivers affected by the scandal. VW still faces lawsuits by at least five states plus investors and dealerships in the U.S., as well as parallel lawsuits, including consumer complaints, in Germany. Bloomberg