– The Wall Street Journal (paywall) reported that Elliott Investment Management spelled out its plan for Southwest Airlines in an open letter to shareholders, saying it intends to meet with the airline’s representatives on September 9. The activist investor said it has been engaged with Southwest and criticized its two top executives, CEO Bob Jordan and executive chair Gary Kelly, Jordan’s predecessor. Elliott has been calling for Jordan to be replaced and the Kelly to be removed. It said in its letter that it hopes the board is willing to ‘look past the personal interests’ of Jordan and Kelly in favor of what’s best for the company and its other constituents.
Southwest didn’t immediately respond to a WSJ request for comment.
– CNBC reported that according to people familiar with the matter, Intel is working with advisers including Morgan Stanley to help defend itself against activist investors. Although Intel has faced activist pressure in the past, no new campaign has been formally launched and it isn’t clear whether an activist investor has been in contact with the company’s board.
Representatives for Intel and Morgan Stanley declined to comment.
– According to Reuters (paywall), the Dutch Data Protection Authority (DPA) said Uber was fined €290 mn ($324 mn) in the Netherlands for sending the personal data of European taxi drivers to the US in violation of EU rules. Uber has stopped the practice, the DPA added. The regulator said Uber transferred personal data to the US and failed to appropriately safeguard the data in a ‘serious violation of the General Data Protection Regulation (GDPR).’ Uber can appeal the decision with the DPA and, if unsuccessful, can then file a case with the Dutch courts.
‘This flawed decision and extraordinary fine are completely unjustified,’ an Uber spokesperson told Reuters. ‘Uber’s cross-border data transfer process was compliant with GDPR during a three-year period of immense uncertainty between the EU and US.’ The spokesperson add that the company would appeal and was confident that ‘common sense will prevail’.
– According to Reuters, Hertz said it had elected Francis Blake and Lucy Clark Dougherty to serve as directors on its board, increasing the size to 11 members. Blake, formerly the CEO of Home Depot, was also non-executive chair at Delta Air Lines. Dougherty previously worked at General Motors (GM). Hertz named former Delta and GM executive Gil West its top boss earlier this year.
– The WSJ reported that the state of AI regulation in the US, or the lack thereof, is a pressing matter for Fortune 500 companies as they launch AI projects. Roughly 27 percent cited AI regulation as a risk in recent SEC filings. The concern reflects a regulatory landscape where the EU’s AI Act is at one end and a mix of US state initiatives in development is at the other, and in which companies are already moving ahead in using AI. Lawmakers at last week’s Democratic National Convention said they would continue to push for an election year breakthrough on federal regulation.
‘We need a combination of industry and consumer self-regulation, as well as formal regulation,’ said George Kurian, CEO of data storage and services company NetApp. ‘If regulation is focused on enabling the confident use of AI, it can be a boon.’
Other companies also have a mixed view of AI regulation. A recent analysis from Arize AI shows 137 of the Fortune 500 cited AI regulation as a risk factor in annual reports, with issues ranging from higher compliance costs and penalties to a drag on revenue and AI running afoul of regulations.
– According to CNBC, Ford Motor Company is the latest US firm to walk back some of its commitments to diversity, equity and inclusion (DE&I) initiatives. Ford has taken ‘a fresh look’ at its DE&I policies and practices over the past year to take into account the evolving ‘external and legal environment related to political and social issues’, according to an internal communication. Ford confirmed the letter was authentic and said it had no additional comment on the matter.
Ford CEO Jim Farley said in the memo that the company will not use quotas for minority dealerships or suppliers, adding that it does not have hiring quotas. The company will also stop participating in the Human Rights Campaign’s Corporate Equality Index, as well as various other ‘best places to work’ lists. The Human Rights Campaign scores more than 1,300 companies annually based on their corporate equality measures for LGBTQ+ individuals.
– The Guardian reported that, according to a new report from the Institute for Policy Studies, the CEOs of some of the largest employers with the lowest-paid workers in the US are more ‘focused on their own personal short-term windfall’ – spending far more money on stock buybacks than on capital investments and contributions to employee retirement plans. Between 2019 and 2023, the 100 largest low-wage employers in the US – the 100 corporations in the S&P 500 with the lowest median worker pay – spent $522 bn on stock buybacks.
‘The data in this report reveals how CEOs are focused on their own personal short-term windfall, rather than a long-term prosperity for their workers or even for their own companies,’ said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies and author of the report. ‘They’ve blown more than half a trillion dollars, these 100 companies, on what really amounts to a financial scam to inflate CEO pay while many of their workers were struggling to put food on the table.’
– California lawmakers passed an AI safety bill, after which it will need one more process vote before its fate is in the hands of Governor Gavin Newsom, who has until September 30 to decide whether to sign it into law or veto it, Reuters reported. Tech companies developing generative AI have largely balked at the legislation, called SB 1047, saying it could drive AI companies from the state and hamper innovation. Some Democrats in the US Congress, including Representative Nancy Pelosi, also opposed it.
The bill would require safety testing for many of the most advanced AI models that cost more than $100 mn to develop or those that require a defined amount of computing power. Developers of AI software operating in the state would also need to outline methods for turning off the AI models if they go awry, essentially a kill switch.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
