Good morning.
The ESG proxy wars continued to intensify during this year’s proxy season, but proposals received declining support from shareholders, according to a new report from The Conference Board. A total of 836 proposals were filed in the first half of the year, up from 801 in the same period last year. And more than half of them—513—dealt with environmental and social issues, up from 466 during the same period last year. But average support for proposals plummeted to 23% this year from 31% last year. The trend was particularly pronounced among proposals dealing with environmental issues, where support dropped to 20% this year from 34% last year. Proposals from anti-ESG groups also spiked to 92 this year from 54 last year. But support for those was paltry: 5% this year, down from 9% last year.
Another sign of the times: Support for racial equity and civil rights audits dropped precipitously this year after surging the two previous years. In 2021, in the wake of the killing of George Floyd, there were nine such proposals, and they received an average of 32% support. In 2022, there were 31 proposals with 33% average support. But this year there were just 25 such proposals, and support slid to 16%.
And here’s one to keep an eye on: The number of proposals to separate the CEO and board chairman roles almost doubled, jumping to 86 this year from 47 last year. And support for those proposals rose modestly to 30% from 28% last year. A growing group of shareholders apparently believe that it is finally time to end the American tradition of giving both jobs to the same person.
The Conference Board report was produced in conjunction with ESGAUGE, Russell Reynolds, and the Rutgers Center for Corporate Law and Governance. You can see the full report here.
Also out this morning is Fortune’s quarterly investment guide, focusing entirely on real estate investing. With interest rates at their highest levels this century, our team shows you where the money-making opportunities can still be found. Subscribers can read it here.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
From forklift driver to CEO
Costco chief operating officer Ron Vachris will take over as CEO, effective Jan. 1, replacing current head Craig Jelinek. Vachris has worked at Costco for over 40 years, getting his start as a forklift driver. The retailer reported $237.7 billion in revenue for its fiscal year ending Sep. 3, a 6.7% increase, as it benefits from inflation and a pandemic-driven shift to cooking at home. CNBC
Still in China?
Beleaguered Chinese developer Country Garden took the unusual step Thursday of confirming that founder Yang Guoqiang and chair Yang Huiyan were still “working as normal” in the country. Rumors had spread on social media that the two had fled China, as the developer admits it’s unable to make its debt payments and is set for default. More pain is coming for China’s real estate sector, as new home prices sank by 0.3% from the previous month, the steepest drop in almost a year. South China Morning Post
Nokia layoffs
Finnish mobile company Nokia is cutting 16% of its workforce, or 14,000 jobs, due to a worse-than-expected slump in the mobile network market. Quarterly revenue dropped 20% year-on-year to hit $5.2 billion. Fellow mobile company Ericsson is also warning of extended weakness in the market through next year, as governments scale back investments in 5G infrastructure. Bloomberg
AROUND THE WATERCOOLER
How Sam Altman got it wrong on a key part of AI: ‘Creativity has been easier for AI than people thought’ by Rachyl Jones
Bank of America warned consumers they would be pushed to the ‘point of pain’—and CEO Brian Moynihan says we’ve now reached that point by Eleanor Pringle
HSBC has already blocked staff from using WhatsApp on work phones—now the bank reportedly plans to ban all texts by Prarthana Prakash
The company that makes your iPhone is expanding to EVs and it’s getting Nvidia to help make an ‘AI factory’ by Lionel Lim
College jocks—not nerds—turn out to have more successful careers and earn $220,000 more, new research finds by Orianna Rosa Royle
Nvidia thought it found a way around U.S. export bans of AI chips to China—now Biden is closing the loophole and investors aren’t happy by Christiaan Hetzner
This edition of CEO Daily was curated by Nicholas Gordon.
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