WOKE WEDNESDAY: Governance risk abounds, Musk to “shut up, not step down”, Meta’s Oversight Board oversight, and Blackrock Sez

Live from a Vanguard-scented throw pillow, it’s yet another Woke Wednesday edition of Business Pants. Joined as always by Analyst-Hole Matt Moscardi! In today’s woke data-flavored, meatless cucumbers called February 7, 2024:the top 10 stories from our ESG News Headline Randomizer 8000 and a game called “Blackrock Sez”!

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

1. New York Community Bancorp stock slides as 'governance risk' in focus

1. New York Community Bancorp shares fell 9.5% before the bell on Wednesday, bracing for another challenging trading session after analysts expressed caution about "governance risks" at the bank.

2. Investors have fled the stock since the lender last week reported a surprise quarterly loss and recorded huge provisions for potential bad loans tied to the commercial real estate (CRE) segment, sending shockwaves through the industry.

3. NYCB said on Tuesday it was looking for candidates to fill up the chief risk officer (CRO) and chief audit executive positions after Bloomberg first reported, about the departures a day earlier.

4. Is this straight to jail in New Hampshire for Moody’s?

1. On Tuesday, Moody's cut the bank's credit rating to junk and warned of further downgrades.

2. "The downgrade reflects Moody's views that NYCB faces high governance risks from its transition with regards to the leadership of its second and third lines of defense, the risk and audit functions of the bank, at a pivotal time," the agency said.

3. “It shall be a crime punishable by not less than one year and not more than 20 years in prison to violate the provisions of this section by knowingly investing state or taxpayer funds in a manner that violates the duty fiduciary in relation to environmental, social and governance (ESG) criteria.”

5. BLACKROCK SEZ: Blackrock’s 2023 vote at NY Community Bancorp

1. Blackrock would avoid jail - they voted 100% with management with their eyes closed!

2. ESG has finally become an adjective: Brazil Mogul Wants to Sell the World’s Best ESG Chocolate

1. Dengo is investing $20 million to expand its sustainable sweets in Europe and North America.

2. With its social and environmental impact credentials, including B Corp certification, the company sees opportunities to expand in the European market which has tough ESG rules in place, as well as in North America in the next couple years.

3. Dengo CEO Tulio Landin said he believes the quality of the chocolate should be as good as its ESG credentials.

4. BLACKROCK SEZ: BlackRock Dissolves ESG Funds as Firm Steps Back From Label!  Also, your governance comp sucks - Lindt 2023 vote results:

3. Tesla CEO Elon Musk needs to shut up, but not step down: Investor

1. Shares of Tesla (TSLA) are down over 25% since the start of 2024 amidst declining EV delivery growth. Analysts at Daiwa Capital Markets downgraded Tesla stock to Neutral from Outperform with a price target of $195, down from $245 due to mounting issues with Tesla CEO Elon Musk.

2. Gerber Kawasaki Wealth & Investment Management CEO Ross Gerber — a Tesla investor himself — joins Yahoo Finance to discuss Tesla's performance and how he feels about Musk's position as CEO.

3. "The cost of Elon's behavior is really hurting shareholders and it's really unfortunate because the reason we're holding the stock is the long-term potential of Tesla is immense. So, you know, it's this catch-22," Gerber explains.

4. Gerber says that "Elon is eroding the value of the brand" and that Musk needs to "shut up" and stop "railing" on immigration issues.

5. “I think Tesla is drifting in a place where I don't know where it goes until there's somebody or somebody on the board that actually wants to confront Elon and expects Tesla to get better results.”

1. Tesla sold only 1 car in South Korea last month

2. SpaceX accused of sexual harassment and discrimination in ex-workers’ suit

1. Former employees condemn ‘frat’-style atmosphere

6. BLACKROCK SEZ:

8. JB Straubel - cool!  Robyn Denholm - sure we voted against her as not having shareholders backs in 2019, but NOW she’s cool!  Elon!  Cool!

4. Voting on ESG: Ever-Widening Differences

2. BLACKROCK SEZ: BlackRock stresses financial strength over ESG in company calls

5. Meta oversight board calls company's deepfake rule 'incoherent'

1. Meta's Oversight Board has determined a Facebook video wrongfully suggesting that U.S. President Joe Biden is a pedophile does not violate the company's current rules while deeming those rules "incoherent" and too narrowly focused on AI-generated content.

2. The board, which is funded by Meta but run independently, took on the Biden video case in October in response to a user complaint about an altered seven-second video of the president posted on Meta's flagship social network.

3. Its ruling on Monday is the first to address Meta's "manipulated media" policy, which bars certain types of doctored videos, amid rising concerns about the potential use of new AI technologies to sway elections this year.

4. The policy "is lacking in persuasive justification, is incoherent and confusing to users, and fails to clearly specify the harms it is seeking to prevent", the board said.

5. The board suggested Meta update the rule to cover both audio and video content, regardless of whether AI was used, and to apply labels identifying it as manipulated.

6. Meta Oversight Board

1. 22 members: 11 women; 14 POC

2. “Human rights” or “Hate Speech Moderation” or “Civil Rights” or “Role of Media in Society” or “Women’s Rights” or “Children’s Rights” or “LGBTQ+ Rights” mentioned in how many members’ profiles?

1. 15

3. Board of Trustees

1. “Trustees are responsible for safeguarding the independence of the Board and for ensuring that the Board operates effectively in fulfilling its stated purpose. They oversee the financing of Oversight Board Members and the financing and activities of the Oversight Board Administration”

2. 6 white people

1. Chair is Stephen Neal: director at NVIDIA

2. Also Marie Wieck: sits on the boards of  Daimler Truck and Intapp

1. In her most recent role, Marie led IBM’s entry into Blockchain.

3. And Cherine Chalaby:

1. Retired chair at Rasmala: a Dubai-based investment bank

2. And retired Managing Partner of Accenture’s capital markets industry sector

4. Pay?

1. From the charter: “The trust will arrange for compensation of members for their service on the board. Member compensation will be issued on a schedule based on the fulfillment of duties and will not be conditioned or withheld based on the outcome of board decisions.”

2. From the bylaws: “Each member will be compensated quarterly in the amount specified in their contract.”

3. From the New Yorker: “The board originally included twenty members, who were paid six-figure salaries for putting in about fifteen hours a week; it is managed by an independent trust, which Facebook gave a hundred and thirty million dollars.”

7. BLACKROCK SEZ:

6. Disney Taps Professor Ludwig Von Drake to Help Teach “How to Vote”

1. With Disney’s Annual Meeting of Shareholders on approach in April, the company is sharing a unique video emphasizing how important this vote is — while also featuring a special Disney touch.

1. “Remember it’s important you vote only for Disney’s 12 nominees using the WHITE proxy card”

2. “Do not vote for the Trian Group or Blackwells nominees.”

3. “Remember, it’s important you vote only for Disney’s 12 nominees using the WHITE proxy card”

4. “Do not vote for the Trian Group or Blackwells nominees”

2. BLACKROCK SEZ:

7. EU agrees its first ever rules for ESG raters in sector shake-up

1. EU states and the European Parliament reached a deal late on Monday on the bloc's first ever set of rules to regulate ESG ratings of company sustainability credentials, which guide trillions of investment dollars globally.

2. The bloc is introducing more rigour into environmental, social and governance (ESG) investing as regulators suspect 'greenwashing', or companies over-inflating their sustainability profile.

3. Under the incoming rules, hitherto unregulated ESG ratings providers in the European Union will have to be authorised and supervised by the European Securities and Markets Authority.

4. Raters based outside the bloc will need to have their ratings endorsed by a rater regulated in the EU.

5. Raters will have to explicitly disclose if their ratings cover how a company's operations affect the environment or social factors such as human rights, and not just the impact of ESG on a company's bottom line.

6. The aim is to encourage more ratings that cover "double materiality" - a two-way impact on both the company and the environment - which is already embedded into EU sustainability disclosures applied by listed companies.

7. BLACKROCK SEZ: Nothing!  But everyone in the EU should ignore ESG ratings and just buy Free Float, because it’s impossible to greenwash a human responsible for decisions

8. Will this apply to the giant Orange Racist? Trump says Bud Light ad was 'mistake of epic proportions'; threatens to release list of 'woke' companies

1. In a post on Truth Social:

2. “The Bud Light ad was a mistake of epic proportions, and for that a very big price was paid, but Anheuser-Busch is not a Woke company, but I can give you plenty that are, am building a list, and might just release it for the World to see. Why not, the Radical Left does it viciously to well run, Conservative companies - and people! Very nasty, but it’s the way they play the game!

3. On the other hand, Anheuser-Busch spends $700 Million a year with our GREAT Farmers, employ 65 thousand Americans, of which 1,500 are Veterans, and is a Founding Corporate Partner of Folds of Honor, which provides Scholarships for families of fallen Servicemen & Women. They’ve raised over $30,000,000 and given 44,000 Scholarships.

1. Stakeholder Capitalism Rules!!?

4. Anheuser-Busch is a Great American Brand that perhaps deserves a Second Chance? What do you think? Perhaps, instead, we should be going after those companies that are looking to DESTROY AMERICA!”

5. BLACKROCK SEZ - they definitely can’t be woke!  Look at all the conflict of interest!:

9. Adam Neumann seeks to buy WeWork back five years after his ousting as CEO

1. Five years after his infamous ousting from the co-working company he founded, Adam Neumann is trying to buy back WeWork.

2. Lawyers representing Neumann’s new venture, Flow Global, sent a letter to WeWork advisers on Monday revealing he has been trying to meet with the company for months to negotiate a deal to buy back the company or provide it with debt financing.

3. But WeWork advisers have appeared hesitant to go to the negotiating table with the company’s former CEO. Neumann’s lawyers said that WeWork had had a “lack of engagement” with him and had not given the information he needs to make an offer to purchase the company or finance its debt. The company has more than $4bn in debt, according to the New York Times, which first reported on the potential deal.

4. BLACKROCK SEZ: We already own WeWork!  

1. Certain funds and accounts managed by BlackRock or affiliates own nearly $134 million in WeWork secured notes (notes entitled to settlement potentially - SELL!), the court document said, adding BlackRock also owns about 102,870 in WeWork shares (equity that gets wiped out).

10. Meta Warns That Mark Zuckerberg Could Die At Any Moment

1. Executives over at Meta-formerly-Facebook are freaked out enough by CEO Mark Zuckerberg's extracurriculars that they're straight up warning investors that he might midlife crisis himself right off this mortal plane.

2. In the company's annual financial report, Meta warned that Zuckerberg and other unnamed "members of management" have taken to engaging in "various high-risk activities, such as combat sports, extreme sports, and recreational aviation, which carry the risk of serious injury and death."

3. "If Mr. Zuckerberg were to become unavailable for any reason, there could be a material adverse impact on our operations," the filing said, in what may be the biggest understatement of the year thus far. "The loss of other key personnel, including members of management as well as key engineering, product development, marketing, and sales personnel, could also disrupt our operations and have an adverse effect on our business."

4. BLACKROCK SEZ:

MATT1

Why play Blackrock Sez?

• BlackRock CEO Fink woos Texas after ESG spat

• Fink - who was forceful in his kabuki letters to CEOs about climate change (calling it an existential risk bigger than the 2008 financial crisis, but without the Fed to bail everyone out) - showed up in Texas as cosponsor of the Texas Power Grid Investment Summit to promote himself as not woke next to Lt Governor Dan Patrick, who has now called Fink the King of Wall Street

• Understand something: finance doesn’t make money by setting policy or having an agenda - they make money by NOT CARING about policy or the agenda, going with the flow, and spending as little time as possible analyzing anything if it doesn’t make stock go up

• This is all theater