The week in GRC: Enhabit shareholders elect activist-nominated director and US foreign investment watchdog sees rise in penalties

– Reuters (paywall) reported that Moderna co-founder Robert Langer will step down from the vaccine maker’s board on August 5. Moderna said it expects to focus recruitment efforts on individuals with scientific and innovation experience. Langer is a former chair of the US Food and Drug Administration and currently one of the nine Institute Professors – the highest honor awarded to a faculty member – at the Massachusetts Institute of Technology. He also heads the Langer Laboratory that focuses on studying the delivery and mechanism of drugs based on genetically engineered proteins, DNA and RNA.

Moderna said director Stephen Berenson, who has been on the board since 2017, will also step down. David Rubenstein, co-founder and co-chair of the Carlyle Group, will replace him.

‘As one of Moderna’s co-founders, [Robert] is one of the visionaries responsible for making mRNA medicines a reality, and his insights have enabled the company to positively impact hundreds of millions of lives,’ said Moderna’s chair and co-founder Noubar Afeyan.

– According to The Wall Street Journal (paywall), the Federal Trade Commission (FTC) is seeking information about how AI and other technological tools may allow companies to vary prices using data they collect on individual consumers’ finances and shopping habits. The FTC said its study is intended to reveal the inner workings of personalized pricing as the algorithms and models that drive pricing strategies are opaque and may rely on surveilling consumers’ online footprints.

‘Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC’s inquiry will shed light on this shadowy ecosystem of pricing middlemen,’ said FTC chair Lina Khan in a statement.

The agency is issuing civil subpoenas to financial companies and consultants who help companies decide pricing strategies. FTC officials said they decided to undertake the study after hearing claims public companies make on earnings calls about their pricing power.

– CNBC reported that unions representing 14,000 Disneyland employees said they had reached a tentative labor agreement with The Walt Disney Company, averting a strike at the theme park. The new, three-year agreement includes wage increases and other benefits for park employees, who are referred to as ‘cast members’. It was signed by an alliance of unions representing custodians, ride operators, merchandise clerks and other workers at the Disneyland Resort in Anaheim, California.

‘Cast members have fought hard for the past four months and this tentative agreement would not have been possible without the strength we all showed throughout this process and the unwavering support from guests and community members,’ the unions said in a statement.

Disney confirmed the tentative deal in a statement: ‘We care deeply about the wellbeing of our cast members... and are pleased to have reached a tentative agreement with the Master Services Council that addresses what matters most to our cast.’

– Democratic US lawmakers introduced a bill that would hold energy companies accountable if they are found by federal regulators to have colluded with the Organization of the Petroleum Exporting Countries (OPEC) to raise oil prices, Reuters reported.

The bill, introduced by Senator Edward Markey, D-Massachusetts, and Representative Nanette Barragán, D-California, notes that if any energy company is found by the FTC to have colluded with OPEC, it would no longer be eligible for new oil and gas leases on federal lands and waters. Although the bill has almost no chance of passing with Republicans controlling the House of Representatives and Democrats holding only a slim majority in the Senate, it shows that some lawmakers are keeping pressure on oil companies.

– The WSJ reported that the Committee on Foreign Investment in the US (CFIUS), which reviews foreign purchases of real estate and investments in US companies for national security issues, imposed more penalties last year than in its entire 50-year history. The rise in activity comes amid concerns about China. Before last year, CFIUS had issued only two such penalties since its inception in 1975.

‘The committee continues to confront a complex national security landscape and significant caseload,’ said Paul Rosen, the Treasury’s assistant secretary for investment security. ‘We are more focused than ever on diligence, compliance and enforcement.’

– Tesla CEO Elon Musk said he will discuss a $5 bn investment in AI startup xAI as the electric-vehicle maker aims to boost development of its robotaxi and self-driving products, according to Reuters. The self-driving project has faced technical and legal hurdles in recent years and Tesla is bolstering its AI infrastructure to train models for autonomous technology.

‘Looks like the public is in favor. Will discuss with Tesla board,’ Musk said in a post on X after a poll on the social media platform showed nearly 68 percent of respondents said the company should invest in xAI, the Grok chatbot developer.

– Reuters reported that Enhabit shareholders elected one of AREX Capital Management’s director nominees after the activist investor called on them to replace seven of the home health and hospice provider’s directors. Enhabit said shareholders added Mark Ohlendorf to the board and re-elected eight of the company’s nine legacy directors, including the CEO and two directors who joined last year when Enhabit reached an agreement with another activist investor.

Ohlendorf, who has experience as a public company CFO, will replace Susan LaMonica, who joined Enhabit’s board as an independent director in 2022. Enhabit’s proxy fight with AREX is one of only a handful to have made it to a vote this year, underscoring many investors’ and companies’ preference to reach agreements for board seats and other concessions before shareholders weigh in.