World’s Greatest Leaders, Amazon Prime, P&G and Merck: CEO Daily for April 19, 2018
Fortune’s World’s Greatest Leaders list is out this morning, and at the top of it are a bunch of kids—the students at Marjory Stoneman Douglas High School and elsewhere, who have challenged the powerful NRA with surprising effectiveness. That says something important about the nature of modern leadership. We live at a time when the captains of business and government are being taken on by surging currents of social media-fed sentiment. If you have any doubts about that, ask Harvey Weinstein —who once ruled Hollywood but was toppled last year by the #MeToo movement, which is No. 3 on the Fortune list.
Jeremy Heimans and Henry Timms have captured this change in their just-published book, New Power: How Power Works in Our Hyperconnected World–and How to Make it Work For You. They argue that “old power”–top down, jealously guarded, held by the few–is giving way to “new power”–bottom-up, participatory, peer-driven. The future belongs to “those best able to channel the participatory energy of those around them–for the good, for the bad, and for the trivial.” Expect to hear more of this in the future.
Some other interesting changes in the nature of leadership are reflected in the list. The top CEO in the group is Merck’s Ken Frazier, at No. 5, who was the first of President Trump’s business advisers to step down after the president blamed “both sides” for the violence in Charlottesville. Not long ago, no CEO would have dared to throw himself into the midst of such a controversy, with no direct relevance to his or her business. But these days, it is becoming almost commonplace–witness Delta’s Ed Bastian (No. 50 on the list), who eliminated a discount for NRA members in the wake of the Parkland shootings; or the small army of business leaders who opposed North Carolina’s restrictions on transgender access to public bathrooms.
Team Trump makes two appearances on this year’s list. One is Scott Gottlieb, who was appointed by the president to head the Food and Drug Administration. He’s earning broad kudos by pushing creative ways to slow skyrocketing medical prices and speeding the development of digital technologies. (Gottlieb is also a skilled user of social media.) The other is General Joseph Dunford, who has shown remarkable staying power as chairman of the Joint Chiefs of Staff.
Chief executives on the Leaders list, in addition to Frazier and Bastian, include: BlackRock’s Larry Fink (No. 8), GM’s Mary Barra (No. 11), Apple’s Tim Cook (No. 14), Tencent’s Pony Ma (No. 19), Salesforce’s Marc Benioff (No. 21), Reliance Industries’ Mukesh Ambani (No. 24), J.P. Morgan’s Jamie Dimon (No. 33), Grupo Bimbo’s Daniel Servitje Montull (No. 36), DSM’s Feike Sijbesma (No. 44), and Santander’s Ana Botin (No. 46).
You can view the entire list here.
More news below.
Amazon’s Prime subscription service now has 100 million paying members, the company has revealed. This is, in fact, the first time Amazon has said how many Prime subscribers there are. CEO Jeff Bezos says a lot of the company’s expansion is happening overseas—the growth is costing more than it brings in for now, analysts say, but Prime membership means loyalty and investors should be happy at the retention rates of over 90%. Bloomberg
Qualcomm and NXP
Qualcomm’s takeover of rival chip firm NXP Semiconductors may have hit a snag in China. Antitrust regulators there said today that an initial review of the deal highlighted “issues that are hard to resolve, making it difficult to eliminate the negative impact.” What does that mean? Who knows—the Commerce Ministry did not elaborate. But: a) This doesn’t mean the regulator will definitely nix the takeover; and b) This does, of course, come in the context of a U.S.-China trade spat, and the U.S.’s decision earlier this week to ban China’s ZTE from buying U.S. tech for seven years. Wall Street Journal
Comcast and 21st Century Fox
An SEC filing has revealed more about why 21st Century Fox spurned Comcast’s takeover bid in December, opting to sell to Disney instead. It seems Comcast refused to agree to a breakup fee in the event that Justice Department regulators didn’t agree to the deal going ahead. Disney offered a $2.5 billion fee, so the Murdoch clan went with Disney instead. Another factor was that Disney’s stock was seen as more valuable. New York Times
P&G and Merck
Procter & Gamble is buying Merck’s consumer health business, giving P&G new vitamin and food supplements to add to its over-the-counter business. The deal is worth $4.2 billion, and Merck’s OTC sales bring in almost $1 billion a year. Meanwhile, P&G joint venture with Teva Pharmaceuticals Industries will be terminated in July. Fortune
Around the Water Cooler
Wynn Resorts, stung by allegations of founder Steve Wynn’s sexual misconduct, has added three women to its board. “The Wynn Resorts board now comprises 36% women, bringing Wynn into the top 40 S&P 500 companies in terms of female board representation,” the company said. The new independent directors are Disney veteran Wendy Webb, corporate governance expert Betsy Atkins, and former White House press secretary Dee Dee Myers. BBC
Facebook’s Facial Recognition
Facebook may think it’s time to reintroduce facial recognition technology to the EU, but EU privacy regulators aren’t so sure. The problem, which led to the tech being turned off there in 2012, was always that not everyone in Facebook photos consents to having their facial data processed. Despite Facebook’s new drive to comply with EU privacy law, the Irish watchdog (which has jurisdiction over the company) is not convinced that it’s fixed the problem. Fortune
South African President Cyril Ramaphosa has outlined his plan for reviving his country’s economy after the immensely damaging tenure of his predecessor, Jacob Zuma. “I’m approaching it with a private-sector lens,” the president (who has a reported worth of $450 million thanks to his years in business) told the Financial Times. And what about Ramaphosa’s backing of land expropriation without compensation? “We are not going to go for a smash-and-grab,” he promised. Financial Times
Farmers for Trump
Farmer (and Agri-Business Committee chair) Casey Guernsey writes for Fortune that President Trump, whom he supports, really needs to play ball with international partners China, Canada and Mexico on trade: “We recognize and appreciate Trump’s commitment to protect American interests through trade and are fully aware that China is a bad actor on many fronts… Unfortunately, the unintended consequences of the president’s recent trade actions are already being felt among his most loyal supporters across the heartland.” Fortune