CEO Daily: Thursday, 23rd March

Good morning,

Today, we’re publishing our 2017 list of the World’s Greatest Leaders.

This year we’re honoring Theo Epstein, the owner of the Chicago Cubs and the man who got them to break their 108-year championship drought. How could we not?

In our profile, which you can read here, Sports Illustrated senior baseball writer Tom Verducci describes the evolution of man whose understanding of important human qualities among his players—the character, discipline and chemistry that turn skilled athletes into leaders—enabled him to engineer one of the most remarkable turnarounds in sports.

The full list, which we’re proud to highlight includes 25 women out of 50, can be found here.

More news below, including the latest update from London after a suspected terrorist killed three and injured 40 more before being shot by police outside the Houses of Parliament. The next few days will be a test of leadership qualities not just for Prime Minister Theresa May, but for all of the U.K.’s politicians, security forces and religious communities.

Top News

• Paris, Nice, Brussels, Berlin…London

Police raided six addresses and made seven arrests overnight in connection with the murders outside the Houses of Parliament in London yesterday. The “working assumption” is that the attacker was directed by some kind of Islamist terrorist organization. The U.K. has left its alert level at “severe,” a view that assumes an attack is “highly likely.” The attack, which killed three and injured 40, was the worst in the U.K. in 12 years. A man drove an SUV into crowds outside parliament before fatally stabbing a policeman. He was shot dead by police. The authorities have not yet publicly identified the attacker, or commented on the level of direction he may have had. Time

• Social Media in the Spotlight

No direct link has been proved, but the attack could not have come at worse time for social media giants like Facebook, Twitter, and YouTube owner Alphabet. The furor in the U.K. over Google’s poorly targeted programmatic ads has focused on examples of household and even government ads ending up on video clips carrying extremist content. AT&T became the first major U.S. company to pull its ads from Google-owned sites yesterday. With the attack happening so close to U.K. lawmakers personally, more intense regulatory scrutiny of the governance of social media appears inevitable. London’s tourist sector also looks vulnerable: The 2015 Paris attacks (admittedly a much more significant outrage by any standard) led to a 6.1% drop in takings the following year. Fortune

• Sears Fears

Shares in Sears fell 12.3% after the company acknowledged “substantial doubt” about its ability to continue operating over the next year. The fears themselves are nothing new and the shares still finished above their recent record low. But Sears’ bond prices now imply a default within the next two years. Elsewhere in the vale of tears that is bricks and mortar retail, discount shoe retailer Payless appears set to file for Chapter 11 bankruptcy protection next week and shutter up to 500 of its 4,000 stores. Fortune

• GE Appeases Nelson Peltz

General Electric promised to cut an extra $1 billion a year in annual costs by 2018 under pressure from activist investor Nelson Peltz. CEO Jeff Immelt’s promise in January of a billion in cost cuts over that timeframe had failed to satisfy investors. In a deal with Peltz’s Trian outlined in a regulatory filing Wednesday, GE said it had also changed its bonus plan so that Immelt and his direct reports could have their bonuses adjusted up or down by as much as 20% according to whether the new targets are reached. In return, Trian, which holds a relatively small $2.5 billion stake, will not immediately seek a board seat to press its agenda. WSJ, subscription required

Around the Water Cooler

• Microsoft Partners With Toyota for Connected Cars

Microsoft agreed to license its patents for Internet-connected cars to Toyota, its first such deal with an automaker and a signal that it may be willing to partner with others. Its trove of patents includes car operating systems, Wi-Fi, motion sensors, voice recognition, and navigation. Business development head Peggy Johnson distilled its rationale by saying that the connected car is “at the core…a software challenge.” It’s also, of course, a network issue. Verizon rolled out an upgrade of its car-focused Hum product range yesterday, including a dongle that provides a WiFi hotspot. Fortune

• Investors Fret About Nike Fretting About Retail

Shares in Nike fell 7.2% after a weak set of quarterly figures that took in the holiday season. Sales rose a modest 3% year-on-year in the key North American market (they rose 5% globally). CEO Mark Parker flagged the trend of customers going online to shop, a trend that has also hit rival Under Armour, which, like Nike, is tied to a high degree to distribution through physical stores. Parker said the company will profit from investing in personalized services that reinforce brand power and customer loyalty. Fortune

• Manafort Got His Hands Dirty Cleaning Russia’s Image

The AP reported that in 2006 Paul Manafort, who briefly managed Donald Trump’s campaign last year, had had a $10 million annual retainer from Oleg Deripaska, a Russian aluminum magnate, for lobbying work that furthered the interests of the Russian state. “Keeping Ukrainian gangsters’ hands off a refinery that had a vital place in the supply chain of Russian smelters” would also have been an accurate description, if obviously not the whole truth. While the Trump campaign clearly has questions to answer on the Russia score, and while Deripaska’s record puts him ethically in the same bracket as other Manafort clients such as Ferdinand Marcos, the current hysteria does scant credit to the complexity of Russian-Ukrainian relations in the 2000s. Fortune

• Michael Eisner Is Getting Into English Soccer

File this one under “unlikely" if you like. Michael Eisner, the former CEO of Walt Disney Co., is in talks to buy a fallen giant of English soccer, Portsmouth FC, according to the Financial Times. The club currently languishes in the fourth tier, after several scrapes with bankruptcy while being effectively looted by its previous owners. Watching Eisner adapt to the transition from the happiest place in the world (or, at least, the company that owns it) to the largest base of the Royal Navy, a place once memorably and unfavorably compared to a Gulf War battlefield, will be an interesting spectacle. The FT reports that Eisner first developed an enthusiasm for soccer watching Arsenal. Fans can draw their own conclusions as to what switching allegiances to “Pompey” says about Arsenal’s current state. FT, metered access