Walmart’s award, E.L.F.’s award, and the real top 100 methodology
Live from an ESG-scented 100% cotton unisex onesie, it’s an all-new Terrific Tuesday edition of Business Pants. Joined by Analyst-Hole Matt Moscardi! On today's anti-anti-DEI lovefest called December 17th 2024: Random ESG Headlines That I Care About Because Somebody Has To Care About Something and Changing the Methodology for Fortune 100 Most Powerful Executives!
Our show today is being sponsored by Free Float Analytics, the only platform measuring board power, connections, and performance for FREE.
DAMION1
Random ESG Headlines That I Care About Because Somebody Has To Care About Something:
The legacy retailer, once seen as slow to adopt technology as Amazon (AMZN) rose to the forefront, has quietly invested in everything from artificial intelligence and augmented reality to same-day delivery and cheap groceries. The combo punch has led to nearly four quarters of record earnings — and a title as Yahoo Finance's annual Company of the Year award winner.
A committee of Yahoo Finance editorial leaders selected Walmart because of its strong year of sales and profits, financial outperformance relative to key rivals like Target (TGT), and a stock price that has reached fresh records in 2024.
Another unknown is the impact of Walmart's Nov. 26 decision to scale back its DEI work amid right-wing pressure. The decision came a few days after our interviews with McMillon and Rainey, at which time Walmart had already secured its Yahoo Finance Company of the Year recognition.
In a Dec. 2 phone call with Yahoo Finance, Walmart's chief people officer, Donna Morris, defended the company's choice:
"We are the exact same company today as we were last week, and we will continue to be the same company," Morris said. "We act with integrity, we serve our customers and our members, and we strive for excellence. So our values are absolutely not changing."
"Our values are absolutely not changing, the specific initiatives or terms, they change over time," she continued. The company started moving to "belonging" in early 2023, though Morris said the move wasn't due to pressure from any specific group.
"When you talk about diversity, equity, inclusion, all in part, there can be communities, and often the largest communities, that step back and say, 'Geez, I'm not sure if I'm even actually included'," Morris explained of the decision.
After Floyd's murder, a "majority" of companies felt the need to boost their DEI efforts, but now they are reevaluating. "What we observed and felt was really important is that everyone was part of that work, and that's why we really made the shift," Morris said.
‘A huge regression’: Walmart’s DEI rollback incites new racial equity push
A year after the murder of George Floyd, Doug McMillon, CEO of Walmart had a warning for corporate America. The death of Floyd triggered a wave of protest over systemic racism and was “not an isolated event. We have a long history of racism, and we see unacceptable events continue.”
Walmart and other large US corporations made pledges to address inequities within their business, ones many feared would be dropped once the focus on Floyd’s killing and its aftermath faded. “We can’t let that be the case,” he wrote, outlining how the company was releasing its “diversity metrics twice a year” and calling on companies to “continue to address systemic racism and the structural inequities that are rooted in this nation’s history of slavery and that persist today”.
Times have changed. Last month Walmart became the latest corporation to cave to a rightwing campaign against diversity, equity and inclusion (DEI) initiatives, announcing it would stop using the term DEI altogether, drop DEI trainings, no longer consider race and gender as a means to improve diversity when making offers to suppliers and would not renew a racial equity center committed to addressing “the root causes of gaps in outcomes experienced by Black and African American people”.
The union-backed Walmart workers group United for Respect has tried to introduce a shareholder proposal at Walmart’s past two annual shareholder meetings for a third-party independent racial equity audit of the corporation.
The racial equity shareholder proposal has come up short of the 20% support it would need for Walmart to discuss it, receiving 18% in 2023 and just over 15% in 2024. Hightower said she planned on reintroducing it at the 2025 annual shareholder meeting in Arkansas.
Why Tarang Amin, CEO of E.l.f. Beauty, is Modern CEO of the Year
Modern CEO set out to recognize an executive who embodies the traits and values we’ve been covering in this newsletter for the last two years: inclusion, accessibility, humility, and innovation
Earlier this year, E.l.f. proclaimed its commitment to diversity when it launched “Change the Board Game,” a campaign to encourage corporate board diversity. “I’m proud to say that our board has 78% women and 44% diverse representation,” Amin tells Modern CEO. “We’ve seen the power in our own business of having that type of representation, but we don’t want to be the only company.”
As part of its board diversity effort, the company sponsored 20 diverse candidates for a National Association of Corporate Director’s program for boardroom readiness and grabbed headlines with its “So Many Dicks” research that found there are more men named Richard, Rich, Rick, or Dick on U.S. public company boards than entire groups of underrepresented candidates. “There’s nothing wrong with being a Richard or a Dick,” Amin says with a smile. “I just want to make room for everyone else.”
Honorable Mentions
Bijal Shah, CEO, Guild
Shantanu Narayen, CEO, Adobe
Tammy Sun, founder and CEO, Carrot Fertility
Union coalition calls for Kroger CEO’s removal amid buyback controversy
Kroger has shifted strategy with $7.5bn stock buyback after Albertsons merger setback.
A faction of the US trades union United Food and Commercial Workers (UFCW) has called for the ousting of Kroger CEO Rodney McMullen in the wake of a controversial $7.5bn stock buyback announcement.
The move follows an unsuccessful attempt to consolidate its position in the grocery market by merging with Albertsons.
The Stop the Merger coalition, spearheaded by several UFCW local unions, contends that the substantial buyback initiative is ill-timed, arguing that the company should prioritise investments in workforce enhancement, store maintenance and renovations.
The potential $25bn merger between Kroger and Albertsons was halted in early December 2024 when a federal judge issued an injunction against the deal, citing concerns over reduced competition in the grocery market.
Starbucks CEO doubles parental leave amid turnaround effort
Starting this spring, the company will double its paid parental leave benefits. For some workers, it's as much as three times the original amount.
For instance, paid leave for birth mothers is increasing from six to 18 weeks. All other non-birth parents – whether welcoming a child through birth, surrogacy, adoption or long-term foster care – will receive up to 12 weeks of paid leave at 100% of their average pay, according to Starbucks.
For employees to be eligible for benefits, they need to work an average of 20 hours per week, according to the company's current policies.
Former OpenAI employee who died by suicide was named in a court case that could decide the future of the internet
Suchir Balaji, a former OpenAI researcher, died by suicide late last month.
After he left the company, Balaji raised questions about OpenAI possibly violating copyright law.
His name appears in a New York Times lawsuit against OpenAI that could have far-reaching implications.
Eight days before the former OpenAI researcher Suchir Balaji was found dead in a San Francisco apartment, the 26-year-old's name appeared in a lawsuit against his former employer that could have significant implications for the future of AI and the internet.
The lawsuit — filed by The New York Times last December — accused OpenAI and Microsoft of using "millions" of articles published by the newspaper without permission to train the AI startup's popular ChatGPT model. The companies have denied that they violated copyright law.
On November 18, the Times' attorneys asked a judge to add Balaji as a "custodian" in the lawsuit, according to court documents viewed by Business Insider. The attorneys' letter described Balaji as someone with "unique and relevant documents" that could support their copyright infringement case against OpenAI and Microsoft.
NEO Murder stuff:
In Armed America, CEOs Get Protection. Schoolkids Get 'Thoughts and Prayers'
While top executives of multibillion-dollar companies beefed up security and canceled in-person meetings in the wake of the assassination of UnitedHealth CEO Brian Thompson earlier this month in New York City, students and teachers were offered little more than the typical outpouring of "thoughts and prayers" after the latest school shooting this week.
Peter Thiel Reveals How Scared Oligarchs Are Of The People
Plutocrats like Thiel are constantly thinking about the fact that ordinary people vastly outnumber them and can kill them at any time. They think about it way more often than ordinary people do.
Billionaire Peter Thiel had a fascinating televised moment the other day when asked by Piers Morgan what he thought about the public making a hero of the man suspected of murdering health insurance CEO Brian Thompson. The way he stumbled and stuttered when trying to answer the question gives a lot of insight into how terrified such people are of the public turning against them one day.
“And to those who think this shooter is a hero, because he did it because he said this healthcare executive is presiding over a healthcare system which kills thousands of Americans by denying them cover, what would you say to them?” Morgan asked.
Thiel paused for a long time, and then stuttered for a long time, and then eventually got out the words, “It’s, I don’t know what, what to say? I, I think I still think you have, you should try to make an argument. And I, I think this is, this is you should, you know, there may be things wrong with our health care system, but you have, you have to make an argument, and you have to try to find a way to convince people and and change, change it by by that, and this is, you know, this is not going to work.”
Socialist fashion brand to launch 'most-wanted CEOs' playing cards in wake of Brian Thompson murder
The Four Suits of Exploitation:
Hearts: Real Estate, Retail, and Healthcare – Exploiting care and connection to put profits over people.
Diamonds: Finance, Tech, and Media – Hoarding wealth and controlling the narrative to maintain power.
Spades: Weapons, Oil, and Pharmaceuticals – Profiting from destruction, war, and illness.
Clubs: Chemicals, Agriculture, and Logistics – Grinding the planet and its people into submission.
“Play the game, know the players.”
Gail Boudreaux: Anthem Insurance (3 of Hearts)
Technically CEO (23%) at Elevance Health; changed name from Anthem in 2022
Richard Sackler: Purdue Pharma (Jack of Clubs)
Company no longer exists; was previously President and Co-Chair
Howard Schultz: Starbuck (Jack of Hearts)
Is this a nod to Robbie Starbuck?
Chair Emeritus, founder and former CEO
Elon Musk: Twitter (2 of Diamonds)
Now called X; not the CEO
Kathy Warden: Northrop Grumman (Queens of Spades)
CEO/Chair (21%)
Jeff Bezos: Amazon (King of Diamonds)
founder/former CEO/Exec Chair (67%)
The Waltons: Walmart (Ace of Hearts)
The Sacklers: Purdue Pharma (Ace of Clubs)
defunct
The Kochs: Koch Inc. (Ace of Spades)
Private company
The Murdochs: New Corp. (Ace of DIamonds)
Featuring Rupert with 4 kids behind him
Lachlan is CEO/Chair (68%); Rupert Chair Emeritus
MATT1
Changing the Methodology for Fortune 100 Most Powerful Executives
Size of the business = max league + network power
Just having a big company doesn’t matter - half the CEOs are hired hands and the board is more powerful than the CEO, some are founders with outsized power… company size isn’t an indicator, but who you know is.
Health of the business = performance returns
Liquidity was one of Fortune’s indicator - liquidity? Really? What if the individual has contributed to the health of the business? We’re going to use individual EBITDA and TSR batting averages, and we’re doing to do it over the last 5 years, not just this year.
Innovation =
Influence = influence!
Unlike for Fortune, this is EASY for us - we actually measure it - we can use a couple variations, including total influence (added across multiple companies), max influence (at any one company), and median influence
Trajectory = aggregate tenure across all companies
It’s stupid to focus on where someone is in their “career arc” - do you penalize someone young? Do you give more weight to Buffett just because he’s 300 years old? Is there a singular “career height” that Fortune decides someone has hit (or hasn’t)? Let’s go with something measurable - aggregate tenure across all company boards
Impact = controversies
This was originally written as “do they make the world a better place”, so we’re going to go with “do they make the world NOT a worse place?”
