Good morning,
| Geoffrey Smith | |
| @geoffreytsmith | |
| geoffrey.smith@fortune.com |
It’s an article of faith at Fortune that we provide readers with the best in business journalism, but it’s nice to have that faith corroborated by others from time to time.
The Society of American Business Editors and Writers honored us with six prizes at its annual “Best in Business” awards for 2016 on Friday, a total topped by no-one and matched only by Bloomberg News (an organization with considerably more resources).
In the words of Fortune’s new editor-in-chief, Clifton Leaf, “This extraordinary string of SABEW awards is a recognition not only of our phenomenally talented journalists, but also of the culture these same journalists and their colleagues have created at Fortune—a culture that holds sacred deep and thoughtful storytelling, even as other media brands have abandoned such reporting as old-fashioned, or as somehow inconsistent with the demands of a modern digital audience. In truth, such reporting couldn’t be more essential today.”
The stories honored by the judges were:
Bitter Sweets, by Brian O’Keeffe, which exposed the intransigent problem of child labor in the cocoa industry;
Hot Mess by Erika Fry, which told the the saga of one of the strangest public relations stumbles by a major corporation in memory—after a crisis with Nestlé’s popular Maggi noodles product in India;
Hoaxwagen by Geoffrey Smith and Roger Parloff, which dug deep into the mess of Volkswagen’s emissions scandal;
The Disturbing Decline of Sumner Redstone by Peter Elkind and Marty Jones, which detailed the bizarre and alarming story of the controlling shareholder in CBS and Viacom.
Finance editor Steven Gandel and reporter Phil Wahba, for his consistently excellent reporting on the retail sector, round off the list of laureates. You can find the full list of SABEW’s winners here.
News below.
Top News
• Dollar Weakens as G20 Flags Trade War Risk
The dollar is continuing to give ground, while global stocks have opened the week lower, after a meeting of G20 finance ministers that failed to dispel the risk of a trade war. Treasury Secretary Steven Mnuchin pushed the group into dropping a pledge “to resist all forms of protectionism.” It’s far from clear what that means in concrete terms. However, it suggests very strongly that the U.S. is trying to rewrite the rules of global trade. Mohammed El-Erian points out in Bloomberg this morning that the U.S. is launching this initiative from a position of strength, as the world’s consumer of last resort and issuer of its reserve currency. However, it risks losing its leadership role if others feel so threatened that they then reduce their reliance on both the U.S. and the dollar. Fortune
• The Changing Face of Chinese Brands
An interesting coda to the G20 meeting comes out today in WPP’s list of the 100 most valuable brands in China. Heading it is Tencent, which runs the country’s most popular social network WeChat. Second is Alibaba and third is search engine Baidu. Without wanting to downplay the obvious talent of the people behind them, all three have benefited from either official policy or covert protectionism that have kept U.S. pioneers from establishing their services in the country. Another striking point about the list is that the two fastest-rising names are both in education, specifically in English-language learning. Protecting national champions clearly does not preclude global, and globalist, ambitions. Fortune
• Uber Keeps Losing Executives
Uber is losing more and more senior managers. President Jeff Jones, who joined only six months ago from Target, left with a thinly-veiled swipe at its well-documented governance problems. The prospect of a new chief operating officer crowding his space may also have contributed. In another departure, the New York Times reported that mapping head Brian McClendon, who joined from Google two years ago, is heading back to Kansas to pursue a career in politics. Gary Marcus, head of the AI startup Geometric Intelligence, which Uber bought in December, also left this month, as did Raffi Krikorian, a director in Uber’s struggling self-driving project, and Ed Baker, VP for product and growth. Fortune
• FBI, NSA Heads to Testify On Snooping Claims
FBI head James Comey and NSA director Mike Rogers will testify in front of the House Intelligence Committee as it begins its investigation of Russia’s role in hacks of the Democratic party last year, and of President Trump’s so far unsubstantiated claim that his predecessor Barack Obama authorized a wiretap of Trump Tower. Trump indirectly repeated the claim on Friday at a joint press conference with German Chancellor Angela Merkel. Committee chairman Devin Nunes (R-Calif.) said he had seen no evidence to support Trump’s claim, while the ranking Democrat Adam Schiff called the claim “patently false.” Fortune
Around the Water Cooler
• Merger Mania in Indian Telecoms
The world’s second-biggest mobile telecoms market, India, is in upheaval. Vodafone and Idea Cellular agreed to merge Monday, creating what will be India’s biggest wireless carrier with almost 400 million subscribers, a 35% market share and a market value of $23 billion. It’s the latest response to a hugely disruptive $25 billion bet on the industry by energy group Reliance, whose new service Jio has racked up 70 million subscribers since launching a loss-leader campaign of free high-speed data and voice calls last year. Two other big providers, Bhati Airtel and Telenor, merged their Indian services last month. Bloomberg
• 7% for the 1%
Median pay for the chief executives of the biggest 100 U.S. companies rose nearly 7% last year to $11.5 million, according to The Wall Street Journal, thanks largely to the strong performance of the stock market, which pumped up the value of equity-linked compensation. Twice as many companies raised CEO pay as cut it, although there were some notable inclusions in the latter category—Apple’s Tim Cook and GE’s Jeff Immelt, to name but two. CEOs will have to work hard to defend the value of those stock awards this year. According to Robert Shiller’s metric of the cyclically-adjusted price-earnings ratio, U.S. equities are at their most expensive in 15 years. WSJ, subscription required
• IBM Ties up With Wanda for China Cloud Business
IBM will hook up with Wang Jianlin’s Wanda Group to sell its Cloud services business in China. The new Wanda Cloud Company will go live in 2018, an IBM spokeswoman said. Wanda is recycling the money it made in real estate through various channels, including movies, sports and, since last year, Internet technology, and a strong local partner will help ensure IBM stays the right side of local rules. Amazon and Microsoft, its two biggest U.S. rivals, already have such partners. On top of that, it will also have to compete with Alibaba. Fortune
• A Beast of a Box-Office Weekend
Whatever the problems at ESPN, Disney has still got it at the box office. Its live action remake of Beauty and the Beast took $170 million at its opening weekend, the highest ever for a U.S. opening in March and $10 million more than its production budget. It’s well set up for a run at the $967 million benchmark for live-action remakes of its own animated classics set by The Jungle Book last year. Elsewhere, Time Warner’s receipts for Kong: Skull Island fell 53% to $29 million, while Blumhouse’s Get Out took another $13.2 million, bringing its total takings to date to $133 million, 30 times its $4.5 million outlays. Fortune
