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The coronavirus pandemic has quickly led to a collision between corporate values and corporate finances. Marriott may well view its employees as family, but when hotel bookings are down by 70% or more, what’s the company to do? What it did was furlough tens of thousands of employees. (Watch CEO Arne Sorenson’s emotional message to those employees here.)
Dallas Mavericks owner Mark Cuban took a different approach. When the NBA shut down earlier this month, he promised to pay all hourly employees in the Mavericks arena the same amount they would have made if the season had continued. I invited him to join me yesterday on Leadership Next, our new podcast (subscribe here), to tell how he did it. His answer: “I’m rich. I’m lucky. I’m blessed…It’s not going to cost me as much as it will cost those hourly employees. It was just the right thing to do.”
How about CEOs who don’t have the resources to be so generous? How should they lead in the face of this crisis? “There is no right way,” Cuban said. “If you can afford it, like I’ve told my portfolio companies, you keep on paying because it is the right thing to do. If you can’t afford it, then you have to communicate with your employees and stakeholders and tell them exactly why you are doing what you are doing.”
For small companies in the U.S.—less than 500 employees—help may come from the bill passed by the Senate early yesterday morning. It provides those companies loans that can be used to cover payroll for two months. If a company maintains its workforce at pre-virus levels, the loan will ultimately be forgiven. The goal is to keep more people in their jobs…although as we reported yesterday, this month already looks to be a record for new unemployment claims.
I asked Mark Cuban whether he plans to apply for government relief. “We haven’t decided yet,” he responded.
The folks at Just Capital are doing their best to keep track of companies that are stepping up to help employees and other stakeholders. They have created a “COVID-19 Corporate Response Tracker,” which you can view here. It looks at how big companies are dealing with sick leave, work from home policies, dependent care, community relief, and even CEO pay. Singled out for praise by the group: Target, which Just Capital says “stands out as one leading example” of aggressive policies “to support its workers.” Martin Whittaker, who runs Just Capital, has agreed to join us on the Leadership Next podcast in the next week or so, to talk about how companies are responding to the crisis. Stay tuned.
More news below. And be sure to read Shawn Tully’s analysis of whether the “Great Cessation” will be worse than the “Great Recession.”
The Senate has approved (96-0) the $2 trillion, bipartisan economic stimulus package it negotiated with the White House. Now it's over to the House, which will consider the bill tomorrow. House Speaker Nancy Pelosi is now talking about a floor debate, as "Republicans have told us [passage by unanimous consent is] not possible from their side." Wall Street Journal
The New York Times worked with epidemiologists to model what would happen to infection, hospitalization and death rates given different lengths of lockdown in the U.S. Turns out that, if President Trump "reopens America" by Easter Sunday as he wants to do, the result would be "an explosion of infections, hospitalizations and deaths." Experts recommend extending the lockdown to a full month. NYT
The World Health Organization has taken the rare step of criticizing countries for wasting time in the early stages of the coronavirus outbreak. WHO Director-General Tedros Adhanom Ghebreyesus said the world "squandered the first window of opportunity" by not acting a month or two ago. Now the world has a second chance he said, recommending a range of actions including the ramping up of testing and the expansion of the health care sector. Bloomberg
The markets appear to be over the optimism we saw earlier this week. Locked-down India saw its BSE Sensex index jump 4.9%, but the Japanese and Chinese markets were down, and the trend is continuing in Europe, where the Stoxx 600 is down 1.6% at the time of writing. Expect something similar in the U.S., where yesterday saw modest gains. Financial Times
AROUND THE WATER COOLER
Fortune's Robert Hackett has a fascinating piece on Rep. Rashida Tlaib's proposal for the striking of two $1 trillion coins that—when deposited at the Federal Reserve—would effectively raise funds for a coronavirus stimulus package. It's a divisive proposal, to say the least, but not an unprecedented one. Fortune
Staff at the U.K.'s Ministry of Defence have been at least temporarily banned from using Zoom, the videoconferencing service that has gained great popularity in the current crisis. MoD bosses are investigating the service's security, as well they might given Zoom's much-publicized flaw last year that let attackers turn on users' webcams. Metro
With China, Russia and Cuba having won plaudits for sending much-needed equipment to help Europe fight the coronavirus outbreak, EU countries are scrambling to demonstrate solidarity with their neighbors—witness Germany sending medical supplies to Italy and taking critical-care patients from France. Some say the future of the European project is at stake here. Politico
Don't fret about the U.S. food supply, United Natural Foods CEO Steven Spinner writes for Fortune. "Just like we’ve done during past national emergencies, the food sector is working to rise to the occasion and keep the country fed," he says. "While demand has surged in recent weeks, distributors—such as my company—have increased their output and taken a number of steps to keep food readily available throughout this pandemic’s life cycle." Fortune
This edition of CEO Daily was edited by David Meyer.