Good morning.
Both Delta and United airlines announced Saturday that they were withdrawing from agreements to provide discounted travel to members of the National Rifle Association attending the group’s annual meeting. That followed similar action by other companies to end partnerships and discount programs with the pro-gun group, including First National Bank of Omaha—which issues the NRA Visa Card; MetLife; Chubb insurance; Hertz, Avis, Budget, Alamo, Enterprise and National car rental; and a number of other firms, including Symantec, Simplisafe, TrueCar and Starkey Hearing. Also yesterday, investment giant Blackstone sent an email to about a dozen hedge funds in which Blackstone has an interest, asking for information about “any ownership or lending” of or to “gun manufacturers or gin sellers.”
There is risk in these corporate actions. The NRA has called them “a shameful display of political and civic cowardice.” And as The New York Times detailed yesterday, the gun group has an intense and devoted following that has proven its willingness to take action against those who support gun restrictions. Moreover, Americans overall are much more evenly divided on gun ownership questions than many urban and coastal dwellers suppose. Prior to the Parkland shooting, for instance, when the Pew Research Center asked: “Which do you think is more important—to protect the right of Americans to own guns, OR to control gun ownership?”, Americans have routinely split right down the middle, at around 50-50.
Given those risks, the corporate response is especially significant, and shows companies feel they can no longer hide from such high-wattage social issues. The pressure on them, often driven by social media campaigns, is growing. And their willingness to respond to that pressure appears to be growing as well. That’s one more sign that we are in the midst of a significant reframing of the relationship between corporations and society.
Separately, IBM this morning is releasing a survey of 12,500 C-suite executives that suggests fears of disruption by digital natives may be abating. When asked, “What types of enterprises are leading disruption within your industry?”, some 72% cited “innovative industry incumbents,” which was more than twice the percentage who cited digital giants such as as Apple, Google, Amazon and Alibaba, and more than three times the number who cited startups or companies from other industries.
News below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Labour Shift on EU
The U.K.'s Labour Party will today amend its stance to favor a "soft" Brexit that will involve the country remaining in a customs union with the EU, according to reports. The shift falls short of calling for the U.K. to remain in the European single market, but it would place immense pressure on Theresa May's government, as she is also being pressured by the right wing of her Conservative Party to go for as hard a Brexit as possible. Guardian
Xi for Life?
China's ruling Communist Party has proposed allowing President Xi Jinping to serve beyond the two-term limit that is currently mandated by the country's constitution. If the National People's Congress approves the constitutional amendment next month, it could pave the way for Xi to remain in his position for life. The restriction was intended to obviate Mao-style personality cults in China. CNN
Bank of Ireland Dividend
In a further sign of Ireland's economic recovery, the Bank of Ireland is proposing to pay out its first dividend in a decade. The bank was bailed out to the tune of €7 billion ($8.6 billion) in the wake of the 2008 financial crisis. Today it posted a pre-tax profit of $1.05 billion for 2017—lower than the previous year due to charges relating to the overcharging of mortgage customers—and new CEO Francesca McDonagh says the dividend proposal is a "significant milestone." CNBC
PE Buyouts
Private equity buyouts are now taking place at the fastest rate since before the financial crisis, according to Bain & Co. The firm said there were 152 instances last year of private equity groups buying listed companies, up from 94 the year before. The deals in 2017 were worth a total of $180 billion. Bain & Co. also listed 72 potential targets in the U.S., including LBrand and Brunswick. Financial Times
Around the Water Cooler
Trump Pilot
President Donald Trump's personal pilot, John Dunkin, is on the shortlist of people who might take over as head of the Federal Aviation Administration. Trump reportedly recommended Dunkin for the post personally. "John Dunkin isn't just a pilot," an unnamed administration official told Axios. "He's managed airline and corporate flight departments, certified airlines from start-up under FAA regulations, and oversaw the Trump presidential campaign's air fleet." Axios
The Weinstein Company
The Weinstein Company says it will file for bankruptcy, after its hoped-for $500 million takeover deal fell through. This probably means that the many people suing the firm over the alleged misdeeds of Harvey Weinstein will get nothing out of it—although they may have more luck winning compensation from the other co-defendants, including Weinstein himself. Fortune
Samsung's New Flagship
Samsung has unveiled its new top-of-the-line handset. The Galaxy S9 features a camera with two apertures and can shoot super-slo-mo video. Samsung also has a new feature to take on Apple's Animoji—this one is called AR Emoji—that lets users put their real facial expressions on an animated version of themselves. Pricing for the unlocked models will reportedly run from $720 through $840. The Verge
Black Panther
Marvel's Black Panther has continued its barnstorming success with a remarkable $108 million in North American second-weekend takings. So far, the critically-acclaimed movie has grossed $400 million domestically and more than $300 million internationally—not bad for a film released outside the traditional summer and holiday season "corridors" for blockbusters. Variety
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
