2025 Predictions: goodbye shareholder rights, the anti DEI movements wins (and loses), and woke retail zones

Introduction

LIVE from your ESG Air Fryer, it’s a Business Pants Friday Show here at January 10th Studios, featuring AnalystHole Matt Moscardi. On today’s show: 2025 Predictions! And a humbling recap of our 2024 predictions 

Our show today is being sponsored by Free Float Analytics, the only platform measuring board power, connections, and performance for FREE.

DAMION:

1. 2024 Predictions

1. Kinda Wrong

1. BP surprises everybody and hires an Asian, pro-ESG CEO (And then Shell buys BP after its shares tank)

1. I’m sure this was tongue-in-cheek? They hired interim CEO Murray Auchincloss, an anti-ESG Canadian; and, of course, shares did not sink.

2. Apple develops a game-changing AI product.

1. No, BUT on January 8, 2024, Apple announced that the release date of Apple Vision Pro in the United States would be on February 2, 2024. We recorded on January 5.

3. Someone jumps from CHRO to CEO (spoiler: it’s a man!)

1. Nope

2. Kinda Right

1. An antitrust case out of the EU hits a US tech company really hard (I want to say Meta but maybe Alphabet)

1. It was the US and it was Alphabet

2. An even Cybersecurity bigger scandal.

1. On Nov. 13, CISA and the FBI confirmed reports that Chinese nation-state actors had compromised a number of U.S. telecommunications providers.

2. Change Healthcare suffers massive ransomware attack

1. Due to the ubiquity of Change Healthcare's software, healthcare organizations, including major pharmacy chains CVS and Walgreens, faced dayslong disruptions due to the attack.

2. Andrew Witty, CEO of Change Healthcare owner UnitedHealth Group, estimated in May that the fallout of the attack will affect roughly one-third of Americans.

3. High profile assassination at COP29 in Azerbaijan

1. No, but Luigi

3. Who will win the year? I had California dudes Gavin Newsom and Zuck. Gavin almost did but then certainly did not and Zuck? Kinda.

2. 2025 Predictions

1. ESG

1. Disclosure

1. The next wave of anti-ESG movement focuses on reduced disclosure

2. Decrease in Director/NEO bio/photo disclosure in both proxy statements and corporate websites

2. Anti-DEI board composition

1. A sharp drop in new directors that are “diverse”

2. An increase in overall board size; instead of outright replacing diverse directors, an increase of white male directors (who skew younger) are simply added to boards

3. Musk effect

1. Greater re-domestication push: incorporate, headquarters, employees: SHPs reflect this

2. CEO pay reconfigured for higher payouts:

1. Decrease in “longterm” CEO compensation performance periods to reflect shorter CEO tenure and general CEO greed

3. New players in proxy cage matches: toxic bros (maybe a bitcoin bro?)

4. SEC moves to greatly restrict shareholders’ right to submit proposals

1. Will lead to a significant decrease in E & S proposals: both in SHPs submitted and SHPs removed

2. SHP support percentage will continue to decrease

3. But I think we will see a new active conservative SHP machine to go along with the two Centers

5. Blame game/oversight greenwashing

1. Increase in board-level committees (partly to due a thing and partly to pretend a thing was being done): AI, Cybersecurity, Succession Planning

2. Sharp increase in “co-” arrangements: co-CEO; co-Chairs, etc. in order to shift blame

3. PwC’s figure that 49% of directors want someone on their board replaced (and 25% want two or more directors replaced) increases to 66% and 44%

2. General

1. The next “Bud Light” is… Kontoor Brands (Lee/Wrangler)

1. Something deemed “woke” triggers the MAGA mob and when they discover in the proxy that the company “Increased board gender diversity in 2024” and was “undertaking a search for a potential additional gender diverse director” all hell breaks loose.

2. Year of Zuck

1. Even more so if TikTok fails

2. The obvious prediction is Musk buys a media company but maybe I think Zuck makes a pivotal acquisition

3. Elon fades due to Tesla sucking and Trump battles

3. Year of Drones: a CEO is fired for either accidental or illegal misuse of drones

4. Significant increase in the “banning” of social media and teen smartphone use

5. People

1. Buffett dies

2. Tim Cook steps down

3. After more than a decade of tenure, Doug McMillon begins leadership transition from Wal-Mart with eyes on 2028 Presidency

6. AI. Also Generative AI. And headwinds.

MATT:

2024 Predictions

1. There is no REAL CEO turnover as every white male CEO becomes Executive Chair and is replaced by a woman.

1. In that spirit…

1. Bob Iger steps down early and is named Executive Chair (again), Disney Entertainment co-chair Dana Walden is named CEO all but setting the stage for a third boomerang in 2027 - MAYBE?

2. Brian Cornell, CEO of Target, steps down to Executive Chair, and Claudine Gay is hired as the CEO, all but setting the stage for a boomerang inside of 6 months - NOPE!

2. Twitter

1. Musk FIRES Linda Yaccarino, realizing she was actually just a woke mind virus DEI hire - NOPE!

2. Trump returns to Tweeting full time as Truth Social fails to go public and dies - NOPE!

3. Twitter records profits as advertisers pour back in as there are too many eyeballs to ignore - NOPE!

3. ESG PREDICTIONS

1. AI PREDICTION

1. In 2024, Generative AI causes one death - not auto driving cars, but ChatGPT persuasian - YES!

2. THE ANTI-ESG MOVEMENT ENDS

1. DEI becomes the new ESG after ESG was the new CRT - in 2024, there is at least FIVE Congressional hearings targeting “liberal” company DEI policies - ALMOST?

2025 PREDICTIONS

1. Texas is the new Florida

1. Texas sees an influx of incorporation under the pretense of “regulation easing”, but every company that moves is basically just racist

2. Goodbye shareholder rights, we hardly knew thee

1. Abolish say on pay (not even advisory!)

2. Every board moves to classified board

1. Why not, investors don’t challenge a single director anyway!

3. Proxy voting policies are made illegal, as voting against the company in any way is considered discrimination against companies

4. Anti-ESG bills keep forgetting that G is in ESG… and they’re banning it, which means no proxy voting at all

1. Wyoming includes language stating “assessing corporate board or employment” as “evidence of” having a social agenda, and therefore banned

3. Costco isn’t alone

1. The pushback against DEI pushback will come from the few, the strong, and the highly democratic boards with strong female power:

1. 1,023 mega, large, and mid cap US companies

2. 721 have diversity programs of some kind that are disclosed

3. 644 have disclosed targets or internal training around DEI

4. Only 94 companies have BOTH highly democratic boards (where power is dispersed evenly) AND top quartile female power on the board AND DEI programs

5. The most democratic is Costco - 32% female power (top quartile) and less than 3% deviation of power (4th most democratic in the entire US, tops for DEI

6. Layer in strong stock returns, and here are the companies who are likely to be targeted and push back:

1. Procter & Gamble

1. 1yr/5yr up 8/31%

2. Sell Braun, Gillette, Old Spice - man brands

3. 39% female power, 4% power deviation

2. Altria

1. 1/5yr up 3/25%

2. Cigarettes are still manly

3. 47% female power, 5% deviation

4. Men FINALLY get some power

1. The Meta Method: increase board size, add all men - went from one of the more gender diverse boards (fake, but still) to BELOW AVERAGE in one cycle

1. There are NINE board that by adding ONE more dude, they would become:

1. Less than 50% female

2. From positive to negative power gap

3. Remain democratic (so dudes get a say) - here are the large caps:

1. Cardinal Health

2. HP

3. Stryker Corp

4. Honorable mention: Cracker Barrel, which is one Robbie Starbuck away from negating female power

5. The US vs. Europe divide NARROWS… as the EU moves hard right

1. Watch 2025 elections: Norway parliament, German federal, Greece presidential, Czech parliament, Irish presidential (in which Conor McGregor is a viable candidate)

2. The frameworks and regulations around environmental and ESG issues were so badly constructed, it’s the perfect storm for pushback and rollback - watch the EU undo everything to catch up with the US in the race to the bottom

6. The rise of the director activist

1. A new model in investor activism - director activism, not corporate activism - built on how people perform and whether they have the skills they should have on a particular board

2. Finding underperforming PEOPLE and replacing them

1. Find underperforming companies

2. Find underperforming teams - globally…

1. 3,406 companies out of more than 10,000 with at least one director who has historically (and currently) performed in the BOTTOM THIRD of all directors on TSR

2. 726 of them, MORE THAN HALF THE BOARD is comprised of bottom dwelling directors

3. 196 of them MORE THAN HALF THE BOARD is comprised of bottom dwellers for BOTH TSR and carbon

3. Find knowledge gaps

1. In the 196, Frontier Airlines has 8 directors with Econ backgrounds, but 4 with mechanical backgrounds, 2 with safety, and 2 with transportation backgrounds

2. M&T Bank’s largest expense is people… but there are ZERO directors with deep knowledge in HR or personnel management for highly paid employees

4. Begin a data driven vote campaign for cognitive diversity

3. You don’t need an absurdly long powerpoint presentation with backing from Jeff Sonnenfeld to achieve this - your narrative is simple: we hire based on meritocracy, you guys stink.

7. The absurd might not be so absurd?

1. AI

1. AI sues a company for discrimination

1. It was unfairly taught DEI

2. AI is added to a board of directors

1. And labelled as “gender neutral” for the diversity matrix

3. AI avatars to go to meetings for you, including your HR meetings

2. Cowards

1. In the wake of Brian Thomson’s murder, Mark Zuckerberg figures out the new best use of the Metaverse: a place for boards and executives to meet without leaving their houses

2. Companies begin disclosing whether directors have guns, the horsepower of the engines of their cars, and whether they are “white” or a new race called “extra white”

3. Woke

1. The first “woke parallel economy” investors begin popping up to combat the anti-woke parallel economy investors

2. Walled-off “woke zones” - like in stores that sold porn mags behind the counter, you can now request to enter the “woke zones” in stores where they keep pride merch and feminine products, but you need an ID to enter and children under 17 must be accompanied by an adult