Coca-Cola-Costa, Trade War Threats, BlackRock and Tesla: CEO Daily for August 31, 2018
On the cusp of Labor Day weekend, Microsoft announced that it will require its U.S. suppliers to offer a minimum of 12 weeks of paid parental leave to their employees at up to $1,000 a week. The company acknowledged the move “may ultimately result in increased costs for Microsoft,” and exempted suppliers with 50 or fewer employees.
“We have long recognized that the health, well-being and diversity of our employees helps Microsoft succeed,” Dev Stahlkopf, general counsel at Microsoft, said in a blog post. “We also know that we rely on a wide array of other companies to supply us with goods and services that reflect their core competencies, and thus that the people who work for our suppliers also are critical to our success.” You can read the full blog post here.
Expect to hear more of this sort of thing in the years ahead. As discussed earlier this week, the big tech companies are under assault on multiple fronts—one of them being the degree to which they contribute to widening inequality. Much as companies like Walmart and Whole Foods changed environmental practices by putting pressure on their supply chains, the big tech companies now see an opportunity and an obligation to change labor practices and improve the lot of workers beyond their own payrolls.
More news below.
Coca-Cola is buying Costa, the largest coffee chain in the U.K., for $5.1 billion. The acquisition is driven by more than a desire to combine as many “Co”s as possible (look out, Costco)—it gives Coke “a scalable coffee platform with critical know-how and expertise in a fast-growing, on-trend category.” Coca-Cola already owns the Georgia Coffee brand in Japan, but that’s a ready-to-drink beverage; Costa is a proper Starbucks competitor. BBC
Trade War Threats
President Trump seems set on going ahead with tariffs on $200 billion of Chinese exports next week, as soon the public comment period closes. Meanwhile, he also appears to have tired of the U.S.’s still-young trade truce with the EU, describing the bloc as “almost as bad as China, just smaller.” Oh, and he’s talking about pulling the U.S. out of the World Trade Organization again. Trump’s offensive caused shares to fall around the world for a second day. Bloomberg
BlackRock and Tesla
BlackRock-run funds voted for the recent Tesla shareholder proposal that would have seen CEO Elon Musk replaced as chairman with someone independent—had the proposal succeeded. Tesla said 17 million shares backed the proposal, while 86 million voted against it. “Our approach to engaging with companies and proxy voting activities is consistent with our commitment to drive long term shareholder value for our clients,” BlackRock said. Reuters
Wells Fed Up
More than a dozen employees—from analysts to managing directors—of the Wells Fargo investment bank have been suspended or shown the door after the company cracked down on after-hours meal expenses. Dozens more are being investigated for the violations, which apparently revolve around the doctoring of time stamps on emailed receipts for meals ordered through delivery services. Wall Street Journal
Around the Water Cooler
President Trump has again insisted on freezing the pay of over two million civilian federal employees next year. He wants to slow the growth of federal spending, at a time when companies are paying less tax as a result of his reforms. The move is seeing a lot of pushback, even from some Republicans. Washington Post
Buffett and Apple
Warren Buffett, who has bought yet more Apple stock, reckons the iPhone is “enormously underpriced.” He says: “It’s got competition so you can’t push the price, but in terms of its utility to people and what they get for a thousand dollars…you can have a dinner party that would cost [$1,000], and here this is, and what it does for you, it’s incredible.” CNBC
Google and MasterCard
Google bought in a “stockpile” of Mastercard transactions in order to help advertisers track people across online and physical sales. The companies never told Mastercard’s two billion customers about the deal, which took four years to negotiate. Privacy advocates are unsurprisingly less than pleased. Google claims it “built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information.” Bloomberg
Jeffrey Skilling, the disgraced former Enron CEO who was jailed in 2006 over the energy company’s bankruptcy-causing accounting fraud, has been released from a prison camp in Alabama to a halfway house in Houston. He was originally sentenced to 24 years, but his lawyers managed to get a decade lopped off the total five years ago. Fox Business