WOKE WEDNESDAY: Tesla runs stuff over, Boeing’s bathroom math, and Voter (lack of) Choice at Blackrock
Live from Vanguard’s Valentine’s Day Banquet Hall, it’s yet another Woke Wednesday edition of Business Pants. Joined as always by Analyst-Hole Matt Moscardi! In today’s woke data-spectacled grab bag called February 14, 2024: the top 6-ish stories from our ESG News Headline Randomizer 17,000 and the Kimbal Musk test!
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
Lyft shares pull way back after CFO corrects major earnings release error
Lyft shares initially soared in extended trading on Tuesday but pulled way back after the company’s finance chief acknowledged on an earnings call that the press release included a major error.
Lyft CFO Erin Brewer said on the earnings call that the company had misstated its margin expansion in the press release. Rather than 500 basis points, or 5%, of growth for 2024, as the company initially indicated, the actual increase will be 50 basis points, or 0.5%, Brewer said.
Erin Brewer started in July with a $19M golden hello package, replacing Elaine Paul, who served for less than 2 years despite her own golden hello package worth over $16M: $1.5M cash/$14.7M equity
Paul departed 5/2023 after serving since 1/2022.
Brewer started 7/2023
After 2 years at Charles Schwab; after 2 years at Atlassian after a variety of roles for McKesson Corporation.
Golden hello = $650k in cash and $18M in equity ($7.2M is performance-based on stock price)
Paul $1.5M cash/$14.7M equity
Higher pay than co-founders last year
23% NO in Say on Pay last year
In part 45,000 of our series called “Do People who run the companies matter?”: OpenAI CEO Sam Altman says ‘very subtle societal misalignments’ with AI keep him up at night
OpenAI CEO Sam Altman says it’s not a fear of “killer robots,” or any other Frankenstein-tech creature that AI could power that keeps him up at night. Instead, it’s the technology’s ability to derail society, insidiously and subtly, from the inside.
Without adequate international regulations, the software could take society by storm when “very subtle societal misalignments” are not addressed, Altman said while speaking virtually at the World Governments Summit in Dubai on Tuesday. The tech billionaire stressed “through no particular ill intention, things just go horribly wrong.”
Also: If Bill Gates could ask a time traveler anything, he’d want to know whether AI eventually doomed or helped humanity
A Boeing 787 on a Transatlantic flight turned around after 8 of its 9 bathrooms stopped working
The reason why there are 9 bathrooms? Because there are 13 directors. Let me do the ESG bathroom math for you :
3 directors are named Dave: CEO Dave Calhoun; Carrier Global CEO Dave Gitlin and former GE Vice Chair Dave Joyce.
CEO Dave was also VIce Chair at GE; add former GE director to that foursome and you have the membership of Boeing’s Evacuation Agreement ratified by shareholders where the 3 Daves and GE Steve share one bathroom.
That means 8 bathrooms for the remaining 9 directors.
The four women on the board share a 2nd bathroom. This is Boeing after all. This ain’t woke Anheuser-Busch. Men are men.
So that leaves 7 bathrooms for the remaining 5 male directors.
So what’s the problem, you ask? Well, one of the broken bathrooms was the women’s bathroom.
This is where Admiral John Richardson stepped in. The former Chief of U.S. Naval Operations cited undisclosed national security risks when women use men’s bathroom so he ordered the plane to turn around.
When asked to elaborate, Admiral Richardson, who chairs Boeing’s Special Programs Committee, cryptically said, “The Special Programs Committee’s principal responsibilities include reviewing the strategic, operational and financial aspects of Boeing programs which, for purposes of national security, have been designated as classified by the United States Government.”
Tesla updates:
Tesla board silent as investors await next steps after court revokes Elon Musk’s $56 billion pay package
It’s been two weeks since a Delaware court voided Tesla CEO Elon Musk’s pay package.
The board of directors, which the judge said was “beholden to Musk,” hasn’t updated shareholders on what comes next.
Some Cybertruck owners say their Teslas are starting to rust in the rain
Tesla Driver Says He's Not Sure If He Killed a Pedestrian Because He Was on Autopilot
A 42-year-old Tesla driver, who at first denied having killed a woman with his Tesla in a hit-and-run, is now claiming that he can't remember if he ran her down or not. If he did, he says, he must've been on Autopilot and "checking work emails" while doing so.
It's a bizarre defense strategy that highlights the many glaring gaps in the legal frameworks when it comes to driver assistance software and how these features, despite their considerable limitations, are being used to avoid blame.
Tesla Employee Who Loved Elon Musk Reportedly Killed by Full Self-Driving
A Tesla employee — and "devoted" fan of its CEO Elon Musk — named Hans von Ohain was killed after his Model 3 crashed into a tree and erupted in flames back in 2022.
His friend and fellow passenger Erik Rossiter, who survived the collision, has since told The Washington Post that von Ohain had the car's Full Self-Driving feature turned on at the time of the fatal accident.
If confirmed, the crash could be the first known death involving the feature, an optional $15,000 add-on that has already drawn plenty of attention from regulators.
WaPo also confirmed the vehicle was equipped with the feature — von Ohain received it for free with his employee discount — and his widow also said he frequently made use of it.
Glass Cliff CEO Alert: JetBlue resets with new CEO, industry veterans to run airline on time, and profitably
Incoming CEO Joanna Geraghty will have to address JetBlue’s reliability and cost-control problems.
The airline is still losing money while larger airlines have returned to profitability post-pandemic.
Insider been there since 2005: COO (2018-2024); Chief People Officer (2010-2014)
Replacing Robin Hayes
And finally, the Super Bowl Happened:
Winner: Clark Hunt, CEO and owner of the Kansas City Chiefs.
Clark is a nepo-nepo baby:
His dad Lamar Hunt was the, cough, owner and CEO of the Kansas City Chiefs and created the Super Bowl.
Lamar and his two brothers attempted to corner the silver market in the late 70s/early 80s: at one point owning one-third of the world silver market and profiting about $3 billion until Silver Thursday in 1980 when the silver price collapsed and the brothers filed for bankruptcy. Oopsies!
Lamar’s daddy was H.L. Hunt. American oil tycoon
Malcom X called Hunt a white supremacist based partly on his desire to deport all black people back to Africa. He was also a bigamist, a legendary gambler, and according to the FBI, ran prostitution activities in Arkansas.
Ladies and gentleman, the winner of Super Bowl 53: the white supremacist/pimp/failure/nepo/bigamist/oil Hunt family
MATT1
Retail lovefest on Valentine’s Day:
BlackRock expands Voting Choice program to millions of U.S. retail shareholders
“Pass through” currently means “give to ISS or Glass Lewis instead of us”
98% of proxy voting is for directors - only the top 100 companies in the US really ever get shareholder proposals (which is really just the top 20 companies), and most of the other votes are for auditors (FOR), pay (mostly FOR), and special situations like mergers or bylaws changes.
So let’s look at the pass through voting options for people, the 98%:
Kimbal Musk test
Blackrock
Against:
Having any other interest, business, or relationship (professional or personal) which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the company and its shareholders
FOR Kimbal
ISS
Boards should be sufficiently independent from management (and significant shareholders) to ensure that they are able and motivated to effectively supervise management's performance for the benefit of all shareholders, including in setting and monitoring the execution of corporate strategy, with appropriate use of shareholder capital, and in setting and monitoring executive compensation programs that support that strategy.
“‘Immediate family member’ follows the SEC’s definition of such and covers spouses, parents, children, step-parents, stepchildren, siblings, in-laws, and any person (other than a tenant or employee) sharing the household of any director, nominee for director, executive officer, or significant shareholder of the company.
SEC rule: “Immediate Family Member” includes the spouse (or life partner) and children of an Insider and any relative (by blood or marriage) of that Insider or spouse (or life partner) residing in the same household as such Insider.
Glass Lewis Policies:
“Affiliate”: A director who has a material financial, familial or other relationship with the company, or its executives, but is NOT an employee of the company
GL recommends against if…
An affiliate or insider on any of the key committees (audit, compensation, nominating) or an affiliate or insider on any of the key committees and there is insufficient independence on that committee, both of the above can vary in accordance with the markets best practice standards.
Director, or a director whose immediate family member, or the firm at which the director is employed, provides material professional services to the company at any time during the past three years.
Director, or a director whose immediate family member, engages in airplane, real estate or other similar deals, including perquisite type grants from the company.
Summary of your “options”: 96% FOR votes for directors
