Hello from Davos, Switzerland, where the World Economic Forum is wrapping up. (Want this in your inbox each morning? Sign up here.)
Goldman issues an ultimatum to drive corporate diversity
Goldman Sachs’s C.E.O., David Solomon, prompted chatter on Wall Street yesterday about his plan to require I.P.O. clients to have at least one “diverse” board candidate before the bank helped them list in the public markets.
• “We’re not going to take a company public unless there’s at least one diverse board candidate, with a focus on women,” Mr. Solomon told CNBC at the World Economic Forum in Davos.
• The mandate starts July 1 for U.S. and European clients, and starting next year, Goldman will require two diverse board members.
• “We might miss some business, but in the long run, this I think is the best advice for companies that want to drive premium returns for their shareholders over time,” Mr. Solomon added.
It’s a big deal in the I.P.O. world, given that Goldman was the top underwriter of U.S. offerings last year.
And it’s the latest push for diversity within Corporate America, Jeff Green of Bloomberg notes. The money-management firms BlackRock and State Street plan to vote against directors at companies without a female director. And California-based public companies with all-male boards face a $100,000 fine.
Mr. Solomon’s decision is a change for Goldman, Liz Hoffman of the WSJ points out. The firm had previously argued, as an underwriter of WeWork’s I.P.O., that it would simply let investors decide if they liked a company’s board.
The big questions: Will rivals like Morgan Stanley and JPMorgan Chase follow suit? And how firmly will Goldman stick to this new rule?
At Davos, Big Business is eager to appear woke
Goldman’s announcement was just one of several initiatives that companies announced at the World Economic Forum to show that they were committed to social change.
Business leaders sought to demonstrate their environmental credentials, with many announcing plans to sharply cut their companies’ carbon footprints. BlackRock’s Larry Fink even wore a scarf representing the pace of global warming.
“Revolutionary sentiments” erupted in unexpected places at the forum, Tim Wu writes in an NYT opinion column: At times he thought he “had mistakenly wandered into a business-casual Bernie Sanders rally.”
But there are reasons to be skeptical:
• Many companies haven’t outlined how they will fulfill their climate pledges.
• Phumzile Mlambo-Ngcuka, executive director of the U.N.’s gender-equality program, warned against “the illusion of change” at the forum, Politico reported.
The Davos roundup:
• George Soros pledged $1 billion to create an international network of universities to promote an appreciation of “personal autonomy.”
• The investor Bill Browder, an outspoken critic of President Vladimir Putin of Russia, said he was warned of potential threats to his safety before he left for Davos.
The Wuhan coronavirus crisis is getting worse
The Chinese authorities reported a sharp increase in the death toll from the outbreak this morning, while more countries are investigating potential cases of infection. It’s stoking fears of another SARS-like disaster.
Here’s the latest:
• The Chinese National Health Commission has reported at least 25 deaths — up by more than a half-dozen in 24 hours — and 830 confirmed cases.
• Beijing expanded travel restrictions to a total of 12 cities, while Wuhan, the center of the epidemic, remains almost completely locked down.
• But experts say that the travel restrictions will do little to stop the virus’s spread outside China, Chris Buckley and Javier Hernández of the NYT report.
The economic effects are still being felt, Alexandra Stevenson of the NYT writes. The Hang Seng Index in Hong Kong was down 2 percent this morning, while Asian markets fell broadly yesterday. And the outbreak may hurt consumer confidence in what’s normally a busy spending season.
It’s still unknown how quickly China can contain the outbreak. While the World Health Organization declined to label it a global health emergency yesterday, it will revisit that decision in 10 days.
Wells Fargo’s ex-C.E.O. is fined over fake accounts
The bank’s onetime chief, John Stumpf, is among several former executives to be fined millions for their roles in promoting a toxic culture that led to sham accounts for customers and other problems, Stacey Cowley and Emily Flitter of the NYT report.
Mr. Stumpf was fined $17.5 million — “the largest individual fine in the history of the bank’s main federal regulator,” the Office of the Comptroller of Currency — and received a lifetime ban from the banking industry. Two other former executives also paid fines, and five others were charged.
The bank regulator also released fresh details about Wells Fargo’s “relentless pressure on employees to meet its unrealistic goals, which included ‘hazing-like abuse,’ ” Ms. Cowley and Ms. Flitter write. “Many employees said they felt they had only two options: Cheat or get fired.”
• One employee wrote to Mr. Stumpf and another senior executive that he had faced “less stress in the 1991 Gulf War than working for Wells Fargo.”
The big picture: “The settlements were a rare instance of personal consequences for those at the highest echelons of the banking industry,” Ms. Cowley and Ms. Flitter write.
A reminder: Jeff Bezos is a celebrity now
Public accusations that Saudi Arabia hacked Jeff Bezos’ phone and learned about his divorce are only the latest indication that the once publicity-shy Amazon chief has become an unlikely tabloid fixture, Karen Weise of the NYT notes.
• Remember when Mr. Bezos gushed over “Star Trek”? Or joked that washing dishes every night was “the sexiest thing I do”? Or said he hated to travel because he felt disconnected from the office?
• That all changed in recent years, particularly after revelations that he had been having an affair with Lauren Sanchez, a former TV personality — and when he then accused The National Enquirer of trying to blackmail him.
• What has happened since: Mr. Bezos and Ms. Sanchez have been seen at Wimbledon and in St. Tropez, and were featured in gossip columns for hosting a party in New York for one of Meghan Markle’s “BFFs.”
Worth noting: A report on the phone hacking shows no evidence that The National Enquirer had obtained Mr. Bezos’s photographs and texts from the Saudis.
Intel named Omar Ishrak as its new chairman, replacing Andy Bryant.
Bill Abbott is stepping down as C.E.O. of the Hallmark Channel, weeks after the network was criticized for temporarily pulling an ad featuring a same-sex wedding.
BP promoted Murray Auchincloss, the finance chief of its oil and gas division, to C.F.O. He’ll replace Brian Gilvary, who is retiring.
G/O Media hired Jim Rich, a former editor of The Daily News, to lead Deadspin, the sports news site.
The DNA testing service 23andMe said it was cutting 100 jobs as its business slowed.
The speed read
• Xerox said it planned to nominate 11 candidates for HP’s 12-member board, escalating its hostile takeover bid for the computer maker. (Reuters)
• The greeting card retailer Papyrus filed for Chapter 11 bankruptcy and plans to close all its stores after failing to find a buyer. (WSJ)
• Britain’s competition regulator announced an 11th-hour review of the $7.9 billion proposed merger of the food-delivery services Just Eat and Takeaway.com. (FT)
Politics and policy
• The Trump administration reportedly plans a crackdown on the importing of counterfeit goods that are sold online. (WSJ)
• The European Central Bank left interest rates unchanged yesterday, keeping them in negative territory. (WSJ)
• The British chancellor of the Exchequer, Sajid Javid, sought to placate worried businesses by saying that his country wouldn’t diverge from E.U. regulations just for the sake of doing so. (FT)
• Inside the I.R.S.’s fight to force Facebook to pay more in taxes on its international operations. (ProPublica)
• Meet Tony Blevins, Apple’s cost cutter in chief. (WSJ)
• Tech companies are offering free or low-cost cybersecurity services for presidential campaigns. (WSJ)
• British officials recommended that the country adopt Huawei technology for a part of the country’s 5G network. (FT)
Best of the rest
• Your weekend long read: “It May Be the Biggest Tax Heist Ever. And Europe Wants Justice.” (NYT)
• A federal judge sentenced the founder of the opioid maker Ins to five and a half years in prison over a racketeering scheme tied to the opioid epidemic. (NYT)
• Changes to how the FICO credit score is calculated could make it harder for some consumers to get loans. (WSJ)
• The veteran TV news anchor Jim Lehrer died yesterday. He was 85. (NYT)
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