WOKE WEDNESDAY: Bill Ackman removed the I from DEI, and Boeing’s board gets a bro report
Live from an ESG-scented Palm Pilot, it’s the ESG Industry’s ONLY weekly woke data podcast, featuring AnalystHole Matt Moscardi! In today’s ESG-flavored contested proxy called January 10, 2024: a bit more Bill Ackman and the board that just keeps on giving charcoal to kids at xmas, Boeing
Our show today is being sponsored by Free Float Analytics, the only ESG data platform to measure real board influence and diversity power gaps
DAMION1
I want to wrap up my hatred for billionaire baby anti-diversity Musk apologist proxy contest short seller Bill Ackman by looking at 3 things: his dumb company; his dumb shameless editing, and one of his dumb performative proxy contests
First of all:
Let’s talk about dumb old Pershing Square Capital Management:
Ackman wrote that his New York-based firm has ‘built a reputation as a constructive, long-term, and helpful owner.”
Ok, liar: Pershing is actually incorporated in the Bailiwick of Guernsey.
Otherwise known as a tax haven.
Otherwise known as a place where Pershing Square faces a corporate tax rate of 0%.
A place that does not levy capital gains taxes which means the rich stay rich and don’t have to accidentally fund something completely obnoxious like a playground, or, um, a DEI program.
By the way, Guernsey also prioritizes corporate privacy: the Tax Justice Network ranks it as the 10th most secretive country in the world. And I guess this is great for Bill because while he is super busy getting into other people’s business and careers, it means that despite Pershing being traded on the FTSE 100, he doesn’t have to disclose how much money he actually makes. Bill is the scrutinizer. And NOT the scutinizee!
Second of all, let’s talk about Mr. Ackman’s shameless editing program.
Pershing Square regularly publishes an ESG statement on its website.
In March 2023, there was a “Diversity and Inclusion” paragraph in the main body and an Exhibit C called: “Diversity & Inclusion Guidelines.”
After Bill viciously targeted 3 female college presidents–especially black woman Claudine Gay at Harvard– he shameless changed the names of these sections to “Diversity and Culture” and “Diversity & Culture Guidelines”
Yes, you heard that right.
This dude is so petty and openly anti-black that he explicitly replaced the word “Inclusion” with “Culture.”
Why? Because Inclusion is part of his new favorite enemy–DEI Diversity Equity And Inclusion–and seems to imply an actual action of hiring??
But that’s not all he changed.
He also purposefully deleted five initiatives that were previously part of Pershing Square’s “effort to advance [its] commitment to diversity:”
Identify D&I best practices supported by research.
Improve the level of diversity within the Firm’s leadership positions and committees
This is now “foster diversity” and not “improve the level”
Identify opportunities for the Firm to engage with its broader communities to promote equity, social justice, and inclusion (i.e., community volunteer activities, corporate social responsibility initiatives, etc.).
Recognize diversity as a business objective when evaluating Firm partnerships and business opportunities.
Provide regular diversity and inclusion training to all employees.
He also made a point to define diversity: “By diversity we mean diversity of all kinds, including diversity of personal experience, of socioeconomic status of one’s background, of political views, of race, religion, country of origin and ethnicity, of sexual identity, of personal interests, perspectives, and more.”
Race is now suddenly devalued behind things like “personal experience” and “political views” while gender has completely ceased to exist as a part of diversity.
In case you’re interested, here’s what it takes to sit on a Bill Ackman board if you’re a person of color (spoiler alert: it takes A LOT! for him to feel comfortable telling his friends (re: Elon) about you to counteract their immediate DEI-tinged eye roll:
Tope Lawani
Independent Director
a Nigerian national
co-founder and managing partner of Helios Investment Partners
co-CEO and a director of Helios Fairfax Partners Corp
principal in the San Francisco and London offices of TPG Capital
mergers & acquisitions and corporate development analyst at the Walt Disney Company.
director of Helios Towers plc. and NBA Africa.
a member of the Harvard Law School Dean’s Advisory Board and the international board of The END Fund
previously director of several public companies: Vivo Energy plc., Equity Group Holdings Plc, First City Monument Bank Plc, and Millicom International Cellular (NASDAQ:TIGO).
member of the MIT Corporation (Massachusetts Institute of Technology’s Board of Trustees), served as a board observer of the board of directors of J. Crew, Inc. and Burger King Corp., and on the MIT School of Engineering Dean’s Advisory Council, the Overseers’ Visiting Committee of the Harvard Business School, the MIT OpenCourseWare Advisory Board and on the Board of Directors of the Emerging Markets Private Equity Association (EMPEA).
B.S. in Chemical Engineering (with a Minor in Economics) from MIT, a JD (cum laude) from Harvard Law School and an MBA from Harvard Business School
fluent in Yoruba, a widely spoken West African language.
Third of all, a brief story about one of Bill’s many failed proxy contests. Remember, it’s ok to fail in his world (re: Elon and Adam)
Let’s focus on Target
In an SEC filing Bill said:
“I have always found it astonishing that in the most democratic nation in the world, elections for the boards of U.S. public companies are generally uncontested. Shareholders are offered the opportunity to vote for one director for each seat handpicked by the incumbent board or by company management. Shareholders can typically vote only in favor of the selected director or withhold their vote. In the political realm, we see analogous elections only in the Third World and in dictatorships.”
Ackman’s board nominees include himself, of course,
Jim Donald
Starbucks’ first pre-boomerang CEO (2005-2008)
Richard Vague
VC graduated with a degree in advertising from UTexas
Brought in to focus on credit cards: targeting Class III director and former Wells Fargo CEO Richard M. Kovacevich???
Michael Ashner
Real estate exec
Bill Ackman
Ronald Gilson
Law academic
A brief history of his fight at Target to demonstrate his enormous combative billionaire ego:
First, Why Target???
In July 2007, when Mr. Ackman began buying the stock, the shares were trading in the 60s [peaked at $261 in 2021], near the all-time high.
Target wasn’t exactly a troubled company.
Was basically the only big-box retailer that has figured out how to compete successfully against Wal-Mart
Its 10-year stock performance was better than Wal-Mart’s.
Analysts loved it
Customers–80 percent of them women--loved it
He said that he had begun the proxy fight not because he had a $1 billion-plus investment in Target shares that was seriously underwater but because “we never want Target to be referred to as a ‘once-great company.’”
He then quoted JFK: “We will pay any price, bear any burden, meet any hardship,”
And that’s when the tears started welling up.
He then immediately started echoing Martin Luther King by saying “I have a dream that directors will be elected on character and competence. I have a dream that one day the director nominating process will be transparent. I have a dream that our efforts here will be fruitful.”
MLK: “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.”
Then he choked up again.
After the meeting, Mr. Ackman met with the news media. He was asked if he planned to hold onto Target’s stock, something he had vowed to do in the days leading up to the meeting.“We plan to continue owning the stock,” he replied. “We think this is a great company. But,” he added, “we reserve the right to change our minds if other opportunities arise.”
MATT1
Bro culture vs. safety
Let’s pose a hypothetical: if everyone on your board is your friend and business partner, are they more likely to worry about their next martini together or a door plug for an airplane?
Current board:
Robert Bradway (Amgen CEO), since 2016
8% influence, .859 earnings, .380 TSR
Dave Calhoun (Boeing CEO), since 2009
22% influence, .428 earnings, .311 TSR
Lynn Doughtie (ex KPMG), since 2021
4% influence, .031 earnings, .462 TSR
David Gitlin (Carrier CEO), since 2022
4% influence, .434 earning, .460 TSR
Lynn Good (Duke CEO), since 2015
10% influence, .370 earnings, .471 TSR
Stayce Harris (military), since 2021
3% influence, .032 earnings, .500 TSR (only Boeing)
Akhil Johri (ex UTC), since 2020
3% influence, .056 earnings, .379 TSR
David Joyce (ex GE Aviation), since 2021
4% influence, .033 earnings, .500 TSR (only Boeing)
Larry Kellner (ex CEO, Continental Airlines), since 2011
12% influence, .333 earnings, .323 TSR
Steve Mollenkopf (ex CEO, Qualcomm), since 2020
10% influence, .659 earnings, .475 TSR
John Richardson (military), since 2019
1% influence, .390 earnings, .497 TSR
Sabrina Soussan (Suez CEO), new
5% influence, .727 earnings, .498 TSR
Ronald Williams (ex Aetna CEO), since 2010
14% influence, .501 earnings, .412 TSR
Bro…
Starting in 1999…
Rozanne Ridgeway (nom) on the board of 3M with future Boeing CEO, Jame McNerney
Ken Duberstein (nom chair, 20 years)
Starts Duberstein Group (lobbying), biggest client every year is Business Roundtable
Made more than $6.7 million from the BRT between 1999 and 2020
Clients include: Duke Energy, where Lynn Good is CEO, who now sits on Boeing’s board
Caterpillar, where Dennis Muillenburg (a CEO of Boeing), Dave Calhoun (current CEO of Boeing), and Susan Schwab (Boeing board) are directors
Amgen, where current Boeing board member Robert Bradway is CEO
Johnson & Johnson, through the Pharmaceutical Research and Manufacturer’s Association, where current Boeing board member Ronald Williams sits on the board
This pharma lobbying group, also has Robert Bradway - Boeing board member on their board
The pharma group also has Ed Liddy, ex-Boeing director, on the board
Ed Rust sits on Caterpillar’s board with the Boeing three, also on S&P Global board, a Duberstein client
Bill Osborn is also on Caterpillar’s board, but he sits on General Dynamic’s board with Phebe Novakovic, their CEO
And both of them sit on the Abbott Laboratories board with Ed Liddy
Phebe is on the board of the Aerospace Industry Association with Greg Smith, Boeing’s ex-CFO
Novakovic also on the board of the Medal of Honor Foundation with Lockheed CEO Marillyn Hewson, who’s on the Business Roundtable board and a client of Duberstein
James McNerney, Boeing’s former CEO spent 20 years at GE where current CEO Dave Calhoun spent 20 years
And Mike Zafirovski, ex board member worked there, too
Zafirovski, Calhoun, Liddy, Duberstein all serve on the nomination committee at Boeing at some point
The regulators…
Elaine Chao, the ex US Secretary of Transportation and current Kroger board member, oversaw the FAA who allowed the Max 8 to fly and, sat on the Wells Fargo board for years with the ex-CEO of General Mills
General Mills, who is on the board of the Grocery Manufacturer Association, a client of the Duberstein Group for nearly a decade
Duberstein and John Bryson sat on the Boeing board together for more than a decade before Bryson left to become the Secretary of Commerce, the largest target of Duberstein lobbying according to government records
But then the Max 8 happened, so there was refreshment…or not…
Akhil Johri (ex UTC), since 2020
Worked with Greg Hayes for years, who sits on BRT with Lynn Good, Duberstein client
Knew Ellen Kullman, UTC board member, who was on Amgen board with Robert Bradway
Steve Mollenkopf (ex CEO, Qualcomm), since 2020
Qualcomm board member from Blackstone worked with Mike Zafirovski, Blackstone is Calhoun’s ex firm
Qualcomm hired by Boeing to review safety of cell phone chips in airplanes in early 2000s
Lynn Doughtie (ex CEO of US KPMG), since 2021
Served on board of Catalyst, Inc, a non profit, with Marilynn Hewson (Lockheed), who is connected to whole board through BRT et al
While at KPMG, worked with Jim Adams, head of aerospace, who was Boeing for 10 years
Stayce Harris (military), since 2021
Boeing 747 pilot for United Airlines, which bought Continental where Larry Kellner was CEO
David Joyce (ex GE Aviation), since 2021
GE on GE crime
National Academy of Engineering, where CEO is ex Lockheed (Phoebe Novakovic was on Boeing board)
Sabrina Soussan (Suez CEO), new
On board of ITT Inc with Nick Fanandakis, a director on Duke Energy with Lynn Good, who’s on the Boeing board
Some notes:
Robert Bradway was on the Norfolk Southern board when Ohio train derailed
Dave Calhoun on the Caterpillar board while it dodged taxes, settled for $740m in 2022
Lynn Good settles for coal ash issues for $215m in 2021
AND YET…
Last proxy, April 2023: worst vote for Ronald Williams (91% FOR), top vote three way tied at 96% FOR
MSCI governance score: 6.7/10, with a board score in the 76th percentile globally
Sustainalytics has a “risk rating” for governance of 4.1, or “medium” risk (59th percentile) with STRONG GOVERNANCE MANAGEMENT and strong board structure, average management quality
NO ONE CARES!
They could have secured the doors with butt plugs instead of door plugs and investors would still elect these cronies at a 90+% rate
