Costco vs. racist investors, tech bro victimhood, Altman cries, and Zuck sucks up

Live from an ESG-flavored 2025, it’s an all-new Wacky Wednesday edition of Business Pants. Joined by Analyst-Hole Matt Moscardi! On today's Costco lovefest called January 8th 2025: Headlines We Missed since the end of December and the new comic book superhero named Costco!

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

DAMION1
Shit We Missed (in no particular order):

1. Tech Bros

1. Zuck

1. Dana White, UFC CEO and Trump ally, to join Meta's board of directors

2. Zuckerberg Announces New Measures to Increase Hate Speech on Facebook

1. Mark Zuckerberg's Meta is moving moderators out of California to combat concerns about bias and censorship

2. “Huge problems” with axing fact-checkers, Meta oversight board says

1. Co-chair Helle Thorning-Schmidt said she is "very concerned" about how parent company Meta's decision to ditch fact-checkers will affect minority groups: "We are seeing many instances where hate speech can lead to real-life harm, so we will be watching that space very carefully," she added.

3. Meta Drops Rules Protecting LGBTQ Community as Part of Content Moderation Overhaul

1. The changes included allowing users to share “allegations of mental illness or abnormality when based on gender or sexual orientation, given political and religious discourse about transgenderism and homosexuality.”

3. Meta replaces policy chief Nick Clegg with former Republican staffer Joel Kaplan ahead of Trump inauguration

2. Sam

1. Sam Altman Explodes at Board Members Who Fired Him

1. "And all those people that I feel like really fucked me and fucked the company were gone, and now I had to clean up their mess," adding that he was "fucking depressed and tired."

2. "And it felt so unfair," the billionaire told Bloomberg. "It was just a crazy thing to have to go through and then have no time to recover, because the house was on fire."

1. The board’s primary fiduciary duty was not to maintain shareholder value or profits, but rather to stay true to OpenAI's mission of creating safe artificial general intelligence (AGI) that benefits humanity.

1. Helen Toner: the director of strategy at Georgetown’s Center for Security and Emerging Technology.

2. Tasha McCauley: an adjunct senior management scientist at think tank RAND Corporation. McCauley was also on the advisory board of the Centre for Effective Altruism. In 2017 she signed the Asilomar AI Principles on ethical AI development alongside Altman, OpenAI co-founder Ilya Sutskever, and former board member Elon Musk

2. OpenAI CEO Sam Altman denies sexual abuse allegations made by his sister in lawsuit

3. Musk

1. Maga v Musk: Trump camp divided in bitter fight over immigration policy

2. Elon Musk Endorses Nazi-Linked German Party, Even Though It Opposed Tesla’s Gigafactory

4. Tech Bro Wealth

1. 12 US billionaires gained almost $1 trillion in wealth in 2024 as the stock market delivered another year of massive returns

2. NYT Report Says Jensen Huang, The CEO Of Nvidia And The 10th-Richest Person In The U.S., Trying To Allegedly Avoid $8 Billion In Taxes

3. Mark Zuckerberg says he doesn't have a Hawaiian doomsday bunker, just a 'little shelter.' It's bigger than most houses.

4. You could live next door to Jeff Bezos on 'Billionaire Bunker' island for $200 million

5. Musk urges Bezos to throw an ‘epic wedding’ after Amazon founder blasts report of $600 million nuptials as ‘completely false’

6. Elon Musk takes aim at MacKenzie Scott again for giving billions to liberal causes, calling the gifts 'concerning'

7. How Jensen Huang and 3 Nvidia Board Members Became Billionaires

8. Mark Zuckerberg sported a $900,000 piece of wrist candy as he announced the end of fact-checking on Meta

2. DEI/ESG Flip-Flopping

1. When an anti-DEI activist took a swing at Costco, the board hit back

1. A Costco shareholder proposal brought by conservative activist The National Center for Public Policy Research asked the company to probe its diversity, equity and inclusion policies, with an eye toward eliminating them.

1. The thrust of the proposal is that certain DEI initiatives could open Costco up to financial risks over discrimination lawsuits from employees who are “white, Asian, male or straight.”

2. The company’s board of directors unanimously urged shareholders to reject the proposal and made the case that Costco’s success depends on establishing a racially diverse, inclusive workplace: “We believe that our diversity, equity and inclusion efforts are legally appropriate, and nothing in the (Center for Public Policy Research) proposal demonstrates otherwise,” the board’s statement said.

1. The statement went on to rebuke the Center for Public Policy Research, saying that they and others were the ones responsible for inflicting financial and legal burdens on companies. “The proponent’s broader agenda is not reducing the risk for the Company but abolition of diversity programs,” the board said.

3. Costco board member defends DEI practices, rebukes companies scrapping policies

1. Jeff Raikes, co-founder of the Raikes Foundation and former CEO of the Bill & Melinda Gates Foundation, who has served on Costco's board of directors since 2008: "Attacks on DEI aren’t just bad for business—they hurt our economy. A diverse workforce drives innovation, expands markets, and fuels growth. Let’s focus on building a future where all talent thrives." He concluded his post on X with the hashtag, "InclusiveEconomy." While businesses began to announce their departures from DEI policies last year, Raikes urged companies to expand such practices at work, insisting that scaling down DEI in businesses would harm the economy.

4. Robbie Starbuck: “I fully endorse cancelling memberships at this point.”

2. McDonald’s rolls back DEI programs, ending push for greater diversity

1. Four years after launching a push for more diversity in its ranks,

2. McDonald’s said it will retire specific goals for achieving diversity at senior leadership levels. It also intends to end a program that encourages its suppliers to develop diversity training and to increase the number of minority group members represented within their own leadership ranks.

3. Managers 'touch up' staff: McDonald's faces fresh abuse claims

1. Fast-food chain McDonald's has been hit by fresh allegations of sexual and homophobic abuse as staff members allege they have been 'touched up' by managers and offered extra shifts for sex.

2. The chain first faced bombshell claims of widespread sexual abuse and harassment at its stores in July 2023 and has since been reported more than 300 times for harassment to the UK's equality watchdog.

3. Allegations have included racist abuse, sexual assault and harassment and bullying. 

3. BlackRock Cuts Back on Board Diversity Push in Proxy-Vote Guidelines

1. The policy updates remove both (a) numerical diversity targets (i.e., boards should aspire to 30% diversity of membership and have at least 2 women directors and 1 director from an underrepresented group) and (b) the related disclosure-based voting policy (i.e., BlackRock previously would consider taking voting action if a company did not adequately explain its approach to board diversity) – but provides that BlackRock may consider taking voting action if an S&P 500 board is not sufficiently diverse (BlackRock includes a footnote in the policy update suggesting that 30% diversity may still be the expectation).

2. BlackRock’s investment stewardship team tweaked the language used to describe how it approaches votes for other companies’ boards. It didn’t explicitly recommend that boards should aspire to at least 30% diversity of their members, after having done so in previous years.

3. The report noted, however, that all but 2% of the boards of companies in the S&P 500 have diverse representation of at least 30%—and that if companies were out of step with those norms, BlackRock may cast opposing votes on a case-by-case basis. 

4. JPMorgan Leaves Net Zero Banking Group, Completing Departure of Major U.S. Banks

3. Stakeholder Anger (or Anger at Stakeholders)

1. Poll finds many Americans pin partial blame on insurance companies in UHC CEO killing

1. A recent survey from the University of Chicago, found that, while 8 out of 10 U.S. adults believe the person who killed Brian Thompson bears the responsibility for the murder, 7 in 10 shared the belief that healthcare companies are also to blame. 

2. Luigi Mangione mention on SNL met with applause, critics slam 'woke' audience: 'Wooing for justice?'

2. New York to charge fossil fuel companies for damage from climate change

1. The new law requires companies responsible for substantial greenhouse gas emissions to pay into a state fund for infrastructure projects meant to repair or avoid future damage from climate change.

3. Albania bans TikTok for a year after fatal stabbing of teenager last month

4. Teens in Vietnam will now be limited to one hour of gaming per session

5. Starbucks baristas set to strike as new CEO makes $100 million

6. Washington Post Cartoonist Quits After Jeff Bezos Cartoon Is Killed

7. Norway on track to be the first to ‘erase petrol and diesel engine cars’

1. Fully electric vehicles accounted for 88.9% of new cars sold in 2024

8. Exxon Sues California Official, Claiming He Defamed the Company

1. Exxon Mobil sued California’s attorney general, the Sierra Club and other environmental groups on Monday, alleging that they conspired to defame the oil giant and kneecap its business prospects amid a debate over whether plastics can be recycled effectively.

4. Dystopia

1. Man Trying to Catch Flight Alarmed as His Driverless Waymo Gets Stuck Driving in Loop Around Parking Lot

1. Asked to Write a Screenplay, ChatGPT Started Procrastinating and Making Excuses

2. Klarna's CEO says AI is capable of doing his job and it makes him feel 'gloomy'

5. Governance news

1. Shari Redstone is saying goodbye to Paramount Global

2. Charles Dolan, TV pioneer who founded HBO and Cablevision, dies at 98

3. Richard Parsons, former Time Warner CEO, dies at age 76

4. Dye & Durham board resigns, activist nominees take control, interim CEO named

5. The Fortune 500 has two new female CEOs—finally pushing that milestone above 11%

6. And we end with a few classics:

1. Boeing ends a troubled year with a jet-crash disaster in South Korea

2. Man who exploded Tesla Cybertruck outside Trump hotel used ChatGPT to plan the attack

3. Norovirus rates have skyrocketed by 340% this season. Here’s where the ‘winter vomiting disease’ is spreading and why

MATT1

Costco

• National Center for Public Policy Research filed the proxy with Costco

• Their arguments include…

• US Supreme court decision at Harvard

• A $25m judgment in PA for white regional manager at Starbucks who was fired after two black patrons were arrested for being black

• This gem: “With 310,000 employees, Costco likely has at least 200,000 employees who are potentially victims of this type of illegal discrimination because they are white, Asian, male or straight.”

• This, perhaps, is the greatest ironic argument for “meritocracy” ever made in history

• They point out that the MAJORITY OF THE STAFF is white, Asian, male, or straight… but they don’t even use Costco’s data, they source census data and just guess

• The real numbers:

• Non management is 44.2% white, management is 58% white - a 14% increase in meritocracy

• Executives are 80.6% white - a whopping 36.4% more merit

• Hispanics are 33.1% of non management, 23.3% of management - 9.8% less merit!

• Executives are 5.8% Hispanic, 26.3% less merit

• Asians are 8.5% and 7.1%, so 1.4% less merit

• 7.9% executive - so even merit?

• US Exec management is 72.3% male

• So 80.6% of executives are white, and 72.3% are male - and the argument NCPPR is making is that BECAUSE there are a lot of white males, there is a lot of RISK that THE WHITE MALES WILL SUE YOU if they think they’re discriminated against

• Think of what they’re saying - because you have so many non diverse people, you can’t have diversity programs for risk of lawsuit

• The response dropped the pretense that the proxy was anything except racism

• The proponent professes concern about legal and financial risks to the Company and its shareholders associated with the diversity initiatives. 

• The proponent's broader agenda is not reducing risk for the Company but abolition of diversity initiatives. 

• A 2023 federal district court decision, in a case brought by the proponent, noted that the proponent had "published a document called 'Balancing the Boardroom 2022,' which describes its shareholder activism as 'fighting back' against 'the evils of woke politicized capital and companies.' [The proponent went] on to describe 'CEOs and other corporate executives who are most woke and most hard-left political in their management of their corporations' as 'inimical to the Republic and its blessings of liberty' and 'committed to critical race theory and the socialist foundations of woke' or 'shameless monsters who are willing to sacrifice our future for their comforts.'" National Center for Public Policy Research v. Schultz, E.D. WA. (Sept. 11, 2023). 

• And the proponent's efforts to demonstrate retrenchment on the part of companies are misleading, at best. For example, the assertion that "Microsoft laid off an entirea[sic] DEI team" is simply wrong. It was later reported that Microsoft stated that the two positions eliminated were redundant roles on its events team and that Microsoft’s diversity and inclusion commitments remain unchanged, according to Jeff Jones, a Microsoft spokesperson: “Our focus on diversity and inclusion is unwavering and we are holding firm on our expectations, prioritizing accountability, and continuing to focus on this work.” Colvin, Caroline. Amid DEI cuts, Microsoft works to distinguish itself from those responding to ‘woke’ backlash. HR Dive, July 24, 2024.

• Reason Costco might be pushing back?

• Racism is basically unveiled

• Of all the companies targeted by a proposal or Robbie Starbuck, Costco has the lowest deviation in board member influence - as in, nearly the entire board has equal power, it’s highly democratic - women, men, diverse cohorts are more or less equally powerful to anyone else in the room

• No connections to any board member on another DEI flipper company

• Meanwhile, the anti DEI, anti immigrant movement has begun to eat itself before Trump even takes office

• In defense of more HB1 visas and foreign workers, Vivek Ramaswamy says we venerate jocks over valedictorians on Twitter, and Americans aren’t as good employees

• The rebuttal was MAGA Trumpers saying Vivek is fake MAGA

• Also this: “His entire argument is a terrible proposition,” he adds. “Children raised to be good little robots might grow up to build robots of their own someday, and become rich. Asians are the highest-earning racial group in America, but are they happier for it? Suicide is the leading cause of death for Asians aged 15-24 … and the second-leading cause of death for those aged 25-34.” Page points to a Psychology Today post that blames tiger parenting for causing anxiety and depression and then asks, “Do we really want this country to be even more stressed-out?”

• Costco proxy says Asians are discriminated against

• Twitch gamers are streaming about “meritocracy”