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Brexit Quagmire, Roundup Damages, Grindr Fears: CEO Daily for March 28, 2019

March 28, 2019, 10:19 AM UTC

Good morning.

One of the big arguments in favor of the 2017 tax bill was that it would let companies repatriate the estimated $2.7 trillion in cash that they were holding overseas, by cutting the tax rate to only 15.5% from the usual 35%.

So did it work? Well, kind of. The latest Commerce Department data show companies brought back $665 billion of overseas profits last year. That’s only a quarter of the estimated total—and a far cry from the $4 trillion Trump promised. But it’s real money, all the same.

The bigger unanswered question is what they did with that money. Did it fuel corporate investment, or buy back stock? That’s a harder question to answer. Data from Citigroup show companies in the S&P 500 repurchased more than $800 billion in shares last year—and for the first time, that total exceeded their roughly $700 billion in capital expenditures. It seems likely that repatriated funds fueled both numbers, but the former more than the latter.

Political economists will debate the tax bill’s effects for years to come. But it’s hard to argue with the solid 3% economic growth in 2018. And as yet, there is no sign that the resulting increase in federal debt is “crowding out” private investment or driving up interest rates: the 10-year Treasury note yield dipped below 2.4% yesterday.

More news below, including the stunning revelation that Nissan paid $600,000 to put Carlos Ghosn’s four (well qualified) children through Stanford as part of his executive compensation package. That’s a new one to me: Do companies do that?

Alan Murray

Top News

Brexit Quagmire

A lot happened yesterday, but there's still no clear way forward. British Prime Minister Theresa May promised to resign early if her negotiated Brexit deal passes on a third attempt—this won over some hardline Brexiteers in her party, but not the Northern Irish DUP party that is implacably opposed to the deal, so she still doesn't have the numbers. Meanwhile, lawmakers voted on eight alternative options and none got a majority (but the most popular options were a second referendum to affirm May's deal, and the U.K. staying in a customs union with the EU.) Guardian

Roundup Damages

Bayer has been ordered to pay $81 million in damages to Edwin Hardeman, who claims the Roundup weedkiller caused his cancer. The same San Francisco jury last week found that the substance played a significant role in causing Hardeman's disease. Two suits down, and only 11,200 to go! Fortune

Grindr Fears

The U.S. is reportedly trying to get the Chinese company behind gay dating app Grindr to sell up, on the basis that the personal data collected by the app could be used by Chinese authorities to blackmail people with U.S. security clearances. Beijing Kunlun Tech has owned Grindr since the start of last year, and this is not the first time fears have been expressed over blackmail potential. Wall Street Journal

Tuition Perk

When now-embattled Carlos Ghosn was CEO of Nissan, the automaker gave him an unusual perk: fully-paid tuition for his four children at Stanford University. A spokesman for Ghosn's family said Nissan had also paid for the children's pre-university schooling and pointed out that Ghosn's three daughters and one son all graduated at or near the top of their high school classes. Bloomberg

Around the Water Cooler

Swedbank CEO

The board of Swedbank, which is caught up in a money-laundering scandal, has sacked CEO Birgitte Bonnesen. A few days ago, she apparently had its full support, but then Swedish authorities raided Swedbank's headquarters and Swedish TV alleged that the bank had misled U.S. investigators in relation to the Panama Papers scandal, so now she's out. Reuters

Emissions Controls

There's a call for new federal controls on methane emissions, and it's coming from… a fossil fuel company? BP America chief Susan Dio writes for the Houston Chronicle that controls are needed for the planet and to stop losing gas from pipelines, and BP and its peers are trying to address the issue, but "the best way to help further reduce and ultimately eliminate methane emissions industrywide is through direct federal regulation of new and existing sources." Houston Chronicle

JPMorgan Cuts

JPMorgan is reportedly cutting hundreds of jobs in its asset and wealth management unit globally, and with the ax mostly set to fall on support roles. Spokesman Darin Oduyoye: "It is normal course of business for us to review our staffing annually to ensure appropriate levels, and adjust as necessary… We continue to invest in our business and talent." Bloomberg

Facebook Ban

Facebook has decided to ban white nationalist and white separatist content, following the Christchurch massacre. "It’s clear that these concepts are deeply linked to organized hate groups and have no place on our services," Facebook said, explaining that people trying to search for white-supremacy-related terms on the platform will be redirected to the NGO Life After Hate. Fortune

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.