Wells Fargo CEO Tim Sloan is stepping down, after two years of trying valiantly, but unsuccessfully, to demonstrate that an insider could clean up the bank’s broken culture. Fortune’s Geoff Colvin highlighted the challenge of pulling off that trick back in June 2017. The bank would have been better served by choosing an outsider from the outset.
Elizabeth Warren, Wells Fargo’s most relentless critic, gloated on Twitter: “About damn time.” Sloan simply said: “It has become apparent to me that” the company “will benefit from a new CEO and fresh perspectives.”
Meanwhile, since it is Friday, some feedback. About my commentary on Carlos Ghosn’s $600,000 college tuition perk, D.M. said:
“I wish I knew a company like Nissan that has a benefit package of putting children through college. Most of the companies that I work for the benefit is usually between 5K – 10K per year.”
That doesn’t go very far at Stanford. And T.C. said:
“I really wasn’t following (Ghosn’s) situation very closely, but he just lost any of my support in the court of public opinion… We have a very modest scholarship fund here… and even though I would love to help defray some of my kids’ tuition, I choose not to just because I know there are many others in our company who could benefit more than I do.”
P.H. took a more sympathetic approach:
“In the real world of proper expatriate comp and benefits, it is par for the course that a non-taxable (gross/net) educational allowance (tuition, transport, books) is paid in full from age 4 to minimum 18 and in some cases to age 21.”
Wish I had lived in that world when my kids were in college.
On the tax bill, P.M., who knows a thing or two about taxes, challenged me to explain why I implied that stock buybacks—which put money into the hands of investors—are somehow not as good as capital expenditures. My answer: in a world where capital is plentiful, direct corporate capital expenditures are more likely to lead to growth and jobs.
Finally, after my post on Levi Strauss’s IPO, E.S. points out that the company “has been public before.” I knew that, but apologies if I didn’t make it clear.
Other news below. And be sure to read Shawn Tully’s Fortune article about the new yardstick for CEO pay.
Investigators believe Boeing’s contentious automated stall-prevention feature was activated in the Ethiopian Airlines 737 Max that crashed earlier this month, adding to suspicions that the same design flaw downed both that jet and a Lion Air plane in Indonesia last year. Meanwhile, the children of a Rwandan victim of the Ethiopian crash have sued Boeing in a Chicago court. Wall Street Journal
Lyft’s IPO will value the company at $24.3 billion, at a pricing of $72 a share. Trading is expected to begin this morning under the ticker LYFT. This will be the first of a series of planned IPOs this year from tech firms that have become big names without, as yet, going public—see also: Uber and Pinterest. Fortune
Yeah, we’re all tired of it, but here goes. Today was once supposed to be Brexit day, but that’s been pushed back by two weeks, unless Prime Minister Theresa May can get Parliament to back her Brexit deal, in which case there’s another month and a bit on top of that. May will hold yet another vote on the deal today, but this time only part of it, in a bid to win over skeptical lawmakers. Chances of success: minimal. Chances of chaos: as high as usual. Despair factor: off the charts. Al Jazeera.
Huawei may have ongoing problems convincing people that its products are safe, but that didn’t stop the Chinese telecoms equipment vendor from clearing $100 billion in revenue for the first time last year. It’s worth noting, though, that its core infrastructure business declined very slightly—the growth driver was its consumer business, i.e. smartphones. CNBC
Around the Water Cooler
Officials negotiating a China-U.S. trade deal are now reportedly going through a draft text with a fine-toothed comb. Per Bloomberg, which spoke to unnamed officials: “The two sides have very different understandings of certain words, according to one of the officials.” Bloomberg
AstraZeneca and Daiichi
Shares in Japan’s Daiichi Sankyo popped by 16% after the announcement of a $6.9 billion deal with AstraZeneca to develop and sell a drug called trastuzumab deruxtecan, which is for treating breast and gastric cancers. AstraZeneca is funding the deal partly through a $3.5 billion share sale, and the two companies will share costs and global profits outside Japan (Daiichi will retain exclusive rights back home.) Financial Times
Germany’s government may be keen on the idea of a merger between the country’s biggest lenders, Deutsche Bank and Commerzbank, but the German public are markedly less so. A poll found all of 17% favored the tie-up, while 43% opposed it. Reuters
Facebook has tightened up its political advertising rules in Europe, ahead of the European Parliament elections in May. Advertisers will need vetting to confirm they live in the country they’re targeting, ads will have to disclose who paid for them—plus their contact details—and all ads will need to be registered by mid-April, otherwise they will be blocked. CNBC