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CEOs are both optimistic and concerned about the economic climate

May 26, 2022, 11:05 AM UTC
Updated May 26, 2022, 6:56 PM UTC

Good morning.

Fortune assembled 60 CEOs of global companies in Davos last night for dinner and a discussion of the challenges and opportunities that face them in the year ahead. The list of challenges was long—inflation, possible recession, broken supply chains, a continuing pandemic, a battle for talent, global food shortages, the war in Ukraine. But the group also expressed confidence, born out of their experience of the pandemic. As Deloitte U.S. CEO Joe Ucuzoglu put it, business has demonstrated the resilience and inventiveness to weather the crises and come out in a better place. Some excerpts—first, on the challenges:

“The pandemic has been an incredible tragedy. Six million people at least have died around the world, mostly in disaffected populations. And we shouldn’t forget that. At the same time, it’s a triumph of biotechnology and science and industry [and] 30 years of investment in technologies like vaccines and mRNA, and the work of so many scientists. That’s an incredible triumph of our industry.”
—Vas Narasimhan, CEO, Novartis

“We built our supply chains as an industry around efficiency, around cost. And now we have to rethink how we design our products. We now have to design for geographic resilience.” 
—Chuck Robbins, CEO, Cisco

“The world needs oil. But the fact that the administration has called Abu Dhabi, they’ve called Saudi Arabia…and now they’ve given approval to an American oil company to increase production in Venezuela, which to me is like selling your soul to the devil. But they have never called, that I’m aware of, a single CEO in the United States. We should never risk losing our energy independence. But we are on the verge of that happening.”
—Vicki Hollub, CEO, Occidental Petroleum

“China seems to be the biggest issue—much bigger than Russia, Ukraine, or really any issue that we face ahead of us in the medium term or the long term.”
—Taso Du Val, CEO, Toptal

“We need to secure the last safety net that we have in placethe World Food Programme, and they are $10 billion short of funding.”
Svein Tore Holsether, CEO, Yara International

And then, on the opportunity:

“We’ve been able to solve massive health challenges with this level and pace of innovation. If we can navigate through and deliver a soft landing, that will help resolve the disruptions in the global system.”
—Adena Friedman, CEO Nasdaq

“This is an incredibly resilient world right nowthe achievements that we’ve had and the role of business leadership, knowing what’s urgent, knowing what’s important, being able to be resilient, driven, innovative, all of these are causes for optimism.”
—Jeremy Allaire, CEO, Circle

People “have a strong preference for hybrid work. They want the best of both worlds. They want the flexibility. They want the work-life balance. They want the job satisfaction and the bonding, the nurturing, the connections that can be involved with work.”
—Chano Fernandez, co-CEO, Workday

“If we all agree, or many of us, that there will be in some shape or form a recession, then let’s believe that with every crisis we’ve seen in human history, over thousands of years, that we’ve always been able to come up with innovation.”
—Anthony Tan, CEO, Grab

“We talked about food insecurity, climate change, supply chain challenges, all leading to incredible social unrest…Then we had a much more hopeful conversation, about how what follows revolution is renaissance.”
—Stephanie Linnartz, president, Marriott International

“There may be a moment for us all to move together. There may be a moment on the environment, may be a moment on digitalization, may be a moment on inequality, where we all decide to move at the same time. Because how many things have to be going wrong for us all decide to go together?”
—Paul Hudson, CEO, Sanofi

More news below.

Alan Murray
@alansmurray

alan.murray@fortune.com

TOP NEWS

World Bank forecasts global recession

The head of the World Bank sounded the alarm over an impending global recession on Wednesday, warning it was difficult to envision a future where a worldwide downturn could be avoided. “The idea of energy prices doubling is enough to trigger a recession by itself,” he said at an event hosted by the U.S. Chamber of Commerce. Fortune

Apple pay rises

Apple has become the latest Big Tech player to offer a pay rise to employees as competition for talent in the sector heats up. The company said Wednesday it would increase its compensation budget, boosting pay for both corporate and retail employees nationwide. Fortune

Russian rate cuts

Russia’s central bank cut its key interest rate to 11% on Friday, with policymakers saying they saw room for further cuts this year as they expect inflation to cool off from 20-year highs. The move comes weeks after the Bank of Russia implemented an emergency interest rate hike following the country’s invasion of Ukraine, which saw rates surge to 20%. Reuters

Musk raises equity stake of Twitter deal

Elon Musk is dropping plans to partially fund his purchase of Twitter with a margin loan tied to his Tesla stake, and instead plans to increase the size of the deal’s equity component to $33.5 billion. He will provide an additional $6.25 billion in equity financing for the buyout, according to a regulatory filing Wednesday. That’s enough to eliminate the margin loan of the same size, which had already been reduced earlier this month. Fortune

AROUND THE WATERCOOLER

Shell consultant’s scathing resignation

A safety consultant resigned from Shell in a blaze of glory when she told executives they needed to admit the oil giant is “failing on a planetary scale.” In her resignation email—which was sent to 1,400 employees and contractors—she said Shell was planning to extract “much more” oil and gas despite warnings from the UN about the impact such a move would have on the environment. “I want Shell execs and management to look in the mirror and ask themselves if they really believe their vision for more oil and gas extraction secures a safe future for humanity,” she said. Fortune

Best cities for work-life balance

Oslo is the best city in the world for work-life balance, according to a new study, while Dubai is the most overworked. The survey, carried out by tech firm Kisi, didn’t rank any U.S. cities in the top 10. Three of the top 10 cities were in Switzerland. Fortune

George Soros on Russia

In a letter to Italian Prime Minister Mario Draghi this week, billionaire investor George Soros said Russian President Vladimir Putin’s bargaining position is “not as strong as he pretends.” He said Russia’s gas storage is almost full, giving Europe leverage as Western countries seek to cripple the Russian economy by targeting the country’s energy exports. CNBC

J.P. Morgan bullish on Bitcoin

J.P. Morgan strategists said in a note Wednesday that they believe Bitcoin, the world’s leading digital asset, has “significant upside potential” after its recent fall. They maintained their $38,000 price target for the cryptocurrency, which represents a potential 64% jump from its Thursday morning trading level of $23,140. Fortune

This edition of CEO Daily was edited by Chloe Taylor.

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