Kohl’s romantic CEO, Meta’s pony tail fetish, CEO pay confusion, and Goldman hates the word “black”

DAMION1

1. Kohl’s CEO Fired for Funneling Business to Romantic Partner 10

1. Kohl’s boss Ashley Buchanan tried to funnel business to a romantic partner and lost his job. It wasn’t the first time their personal and professional lives had crossed.

2. Kohl’s fired Buchanan on Thursday after it discovered he had instructed the retailer to enter into a “highly unusual” business deal involving a woman with whom he has a romantic relationship, according to people familiar with the situation. The pair currently live together in an upscale golf community in the suburbs of Dallas.

3. Buchanan met the woman, Chandra Holt, when they were both working at Walmart several years ago, the people said. His divorce proceedings show the two had a romantic relationship while he was the CEO of Michaels. The arts-and-crafts chain also tried to hire Holt during his tenure.

4. A Kohl’s board investigation by outside lawyers found that Buchanan violated the company’s code of conduct in two instances with a vendor with whom he had a personal relationship and whom it didn’t name, according to a regulatory filing. The filing said he directed the retailer to conduct business with a vendor founded by this person “on highly unusual terms,” and he caused the company to enter into a multimillion-dollar consulting agreement, where that person was part of the consulting team.

5. On Thursday, Kohl’s appointed Chairman Michael Bender as its interim CEO. He becomes the fourth CEO in three years at the department-store chain, which has been struggling with slumping sales.

1. Nominating Committee:

1. John E. Schlifske* (2011; 6%)

2. Michael J. Bender (2019; 18%)

3. Robbin Mitchell (2021; 7%)

4. Adrianne Shapira (2016; 6%)

2. Even CEOs sometimes get the 'you're fired' treatment 11

1. Great, nobody understands corporate governance

3. Meta exec apologizes to conservative activist Robby Starbuck

1. Joel Kaplan, Meta’s chief global affairs officer, has issued a public apology to conservative influencer Robby Starbuck after Starbuck filed a lawsuit alleging that Meta’s artificial intelligence chatbot produced responses containing false and defamatory information about him. 

2. “Robby — I watched your video — this is unacceptable. This is clearly not how our AI should operate,” Kaplan wrote on X, which is one of Meta’s competitors. He referred to a 20-minute video in which Starbuck laid out his claims, including that Meta’s AI falsely associated him with the Jan. 6 Capitol riot and the QAnon conspiracy theory.

3. “We’re sorry for the results it shared about you and that the fix we put in place didn’t address the underlying problem,” Kaplan continued. “I’m working now with our product team to understand how this happened and explore potential solutions.”

4. Bob Monks, fierce champion of shareholders against what he saw as boardroom failings 0

1. An American pioneer of investor activism and better corporate governance.

2. Monks emerged as a doughty champion of shareholders against what he saw as increasingly self-serving and complacent boardroom behaviour

3. In 1985 he founded Institutional Shareholder Services, which advises funds that own shares in multiple companies how best to exercise their voting power. He also helped create Lens, an activist investment fund, and GMI Ratings, a scrutineer of corporate behaviour which claimed to have downgraded BP before the Deepwater Horizon disaster, the insurance giant AIG before the 2008 financial crisis and News Corp before the phone-hacking scandal.

4. His most celebrated campaign, in 1991, was an attempt to become a director of the underperforming retail and financial conglomerate Sears Roebuck, for which he ran a full-page ad in the Wall Street Journal depicting the existing Sears board as “non-performing assets”. Though his candidacy was rejected, many of his proposals for rationalisation were adopted, and he was able to declare: “Sears has been changed.”

5. This low-profile CEO is the highest-paid in America with a $101 million paycheck that beat out Starbucks, Microsoft, and Apple chiefs 10

1. Jim Anderson, a low-profile executive of Pennsylvania-based Coherent, which produces equipment for networks and lasers

2. Here’s what the dopey reporting missed:

1. An originally announced golden hello equity award of $48M that magically morphed into $91M come proxy time.

2. 48% NO on Say on Pay

3. Too large Pay Committee: 6 members, led by Shaker Sadasivam, who was NOT up reelection this year. Also includes Mike Dreyer (22% NO), former COO of Silicon Valley Bank

6. Euronext rebrands ESG in drive to help European defence firms 10

1. In a statement renaming ESG - the acronym given to Environmental, Social and Governance-driven investing - as Energy, Security and Geostrategy, Euronext's CEO and Chairman Stephane Boujnah said it was responding to a "new geopolitical order".

2. "European aerospace and defence companies have expressed the urgent need to invest heavily in their innovation and production capacities to guarantee Europe's strategic autonomy for the next decade," Euronext said in the statement.

3. Among the measures, Euronext said it would revisit the methodologies for ESG indexes to limit the exclusions currently placed on defence companies.

7. OpenAI, facing pressure, announces its nonprofit will stay in control after all

1. OpenAI announced a smaller-scale change to its famously complex structure. Remember that it was founded as a nonprofit. But in 2019, it set up a for-profit subsidiary to start raising money from investors to finance its eye-wateringly expensive A.I. research. Then last year, the company moved to turn itself into a for-profit entity in which the nonprofit held a stake but didn’t have control.

2. Now, OpenAI plans to turn its for-profit subsidiary into a public benefit corporation, which would still be controlled by the nonprofit, though the size of its stake remains undetermined. (Got all that?) Sam Altman, its C.E.O., said yesterday that the revised plan still gives his start-up “a more understandable structure to do the things that a company like us has to do.”

8. The AI Industry Has a Huge Problem: the Smarter Its AI Gets, the More It's Hallucinating

9. Zuckerberg Says in Response to Loneliness Epidemic, He Will Create Most of Your Friends Using Artificial Intelligence

1. In an interview with podcaster Dwarkesh Patel this week, Zuckerberg asserted that more people should be connecting with chatbots on a social level — because, in a striking line of argumentation, they don't have enough real-life friends.

2. When asked if AI chatbots can help fight the loneliness epidemic, the billionaire painted a dystopian vision of a future in which we spend more time talking to AIs than flesh-and-blood humans.

3. "There's the stat that I always think is crazy, the average American, I think, has fewer than three friends," Zuckerberg told Patel. "And the average person has demand for meaningfully more, I think it's like 15 friends or something, right?"

4. "The average person wants more connectivity, connection, than they have," he concluded, hinting at the possibility that the discrepancy could be filled with virtual friends.

10. Tesla Is Extremely Upset About Reporting That Its Board Has Been Looking Into Replacing Elon Musk

11. Leading Independent Proxy Advisory Firm ISS Recommends Harley-Davidson Shareholders Vote "FOR ALL" of Harley-Davidson's Highly Qualified Director Nominees 10

1. Targeted Directors

1. CEO/Chair Zeitz (2007, 30%): who has already stepped down as CEO

2. Lead Director Norman Thomas Linebarger (2008, 13%): who is not independent

3. Sara Levinson (1996, 20%): the longest-tenured director 

2. Matt: HARD HITTING ANALYSIS

1. “[I]t appears that his time in the role has been more positive than negative, which makes it hard to argue that his vote on a successor is worthless.”

2. "[T]here are compelling reasons to believe that as a group [the targeted directors] still have a perspective that can be valuable.”

3. "[I]t appears that the board initiated the [CEO search] process promptly…”, 

12. Target CEO’s pay slashed by a whopping 45% after his disastrous mishandling of DEI 5

1. Patrick Kennedy of The Minnesota Star Tribune used Total Realized Pay: down from $18.1M last year mostly because of a reduction in vested stock, $5.6M down from $13.6M. Total summary is up: $19.2M to $20.4M. Pay ratio is up: 719:1 to 753:1

2. Matt: What?

MATT1

1. Berkshire Hathaway: Board Unanimously Appoints Greg Abel as Firm’s Next Chief Executive 1000

1. Rate the goodness of the succession planning process

2. Trump announced Alcatraz reopening just hours after ‘Escape from Alcatraz’ aired on a South Florida PBS station 15

1. Rate the goodness of funding PBS, which probably gave Trump the idea to reopen Alcatraz

3. Goldman Sachs Removes Mentions of ‘Black’ From Flagship Diversity Pledge 0

1. ‘Black in Business,’ one program in the effort, is now about staying ‘in the black,’ in reference to profits—not race

2. Rate the goodness of Goldman Sachs finally returning to a focus on profit, not black people

4. Anthropic CEO Admits We Have No Idea How AI Works

1. "When a generative AI system does something, like summarize a financial document, we have no idea, at a specific or precise level, why it makes the choices it does — why it chooses certain words over others, or why it occasionally makes a mistake despite usually being accurate,"

5. Meta exec apologizes to conservative activist Robby Starbuck -4,000,000

1. “Robby — I watched your video — this is unacceptable. This is clearly not how our AI should operate.”