– Reuters (paywall) reported that activist investor Elliott Investment Management said it was ready to nominate directors at Crown Castle International and push for the removal of the company’s executives and board members. The hedge fund firm said in a letter that the company needs ‘comprehensive leadership change’ and that it was ready to appeal to other shareholders to make changes to the 12-member board. It also wants the company to review its fiber strategy, including considering a possible sale of the business. This is the second time Elliott has publicly pressured the company after it urged management to rethink its fiber infrastructure strategy and criticized its returns in 2020.
‘We are prepared and intend to make our case directly to shareholders with a majority slate of alternative directors at the company’s 2024 annual meeting,’ wrote Elliott managing partner Jesse Cohn and senior portfolio manager Jason Genrich in the letter.
Crown Castle did not immediately respond to a request for comment.
– The Wall Street Journal (paywall) reported that, according to new data from McKinsey & Co, US companies have lost momentum in promoting black professionals into management. Companies have made some progress in hiring and promoting more black professionals, particularly at the most senior levels. But on the critical first promotion to management, the new McKinsey data shows US companies are no longer elevating black professionals at the higher rate of a couple of years ago and have returned to nearly the same promotion rates as in 2019. The downshift suggests that as companies’ focus has shifted to trimming budgets and getting more workers back into offices, many are distracted from earlier commitments to hire and promote more people of color, human resources and other corporate executives and consultants say.
According to the McKinsey data, for every 100 men of all races promoted into their first management role in 2022, 54 black women were elevated. In 2021, 96 black women were promoted for every 100 men, approaching close to parity for a brief time.
– The US Supreme Court was due to hear arguments in an appeal by President Joe Biden’s administration of a lower court’s ruling restricting the SEC’s authority to enforce securities laws through the agency’s long-standing in-house tribunal system, Reuters reported. Critics have argued that the SEC’s in-house system gives it the unfair advantage of prosecuting cases before its own judges rather than before a jury in federal court. But the case could make it harder for the SEC to weed out bad actors in the securities industry, legal experts said.
– CNBC reported that, according to a Wednesday letter from the activist investor, Elliott Investment Management has taken a $1 bn stake in Phillips 66 and wants up to two board seats in an effort to improve the company’s performance. Elliott said in the letter to Phillips’ board that the company’s performance has declined in recent years because it has shifted its focus away from its refining segment. Elliott backed CEO Mark Lashier’s plan to improve the company’s performance, which he intends to do through a more than $1 bn improvement in Phillips’ refining segment, selling $3 bn in non-core assets and increasing the company’s long-term capital return policy.
Elliott called for two new directors with experience in refining operations, arguing that they would improve the board given current members’ limited experience in this segment.
– General Motors (GM) plans to sharply increase cash return to shareholders, as CEO Mary Barra tries to reassure investors about the health of the company’s core car-making business, according to the WSJ. The company also said it will work to offset higher labor expenses from its new contract with the United Auto Workers and unionized employees in Canada. GM outlined plans for an accelerated $10 bn share repurchase for next year, its largest stock buyback in recent times. The company will fund it in part by freeing up capital previously earmarked for development of electric vehicles and autonomous vehicles, which have been the main pillars of Barra’s growth strategy.
– Reuters reported that US government energy policy is continuing to drive demand for legal advisers on infrastructure and clean energy deals, leading to partner hires by major law firms. These firms have been expanding their capacity to meet client demand in the energy sector, particularly to handle legal work prompted by the Biden administration’s Inflation Reduction Act. The law includes tax credits and other measures to promote cleaner domestic energy production and manufacturing.
On Monday, New York was awarded nearly $24 mn in funding to improve its electric grid with a US Department of Energy grant under the Bipartisan Infrastructure Law, separate legislation that Congress passed in 2021 that includes a clean energy component.
– The SEC named Kate Zoladz as regional director of the agency’s Los Angeles office, effective December 3. Zoladz has been acting co-director since June 2023 and the associate regional director for enforcement since October 2019. She joined the agency in 2010.
– CNBC reported that Microsoft will have a non-voting board seat at OpenAI, whose outlook has been closely connected to Microsoft since the software company invested $13 bn into OpenAI and integrated its artificial intelligence models into Office and other Microsoft programs. Previously, Microsoft did not have official representation on the board that controls the start-up.
‘We clearly made the right choice to partner with Microsoft and I’m excited that our new board will include [it] as a non-voting observer,’ said CEO Sam Altman in a note to staff. He commended the team and said OpenAI did not lose any employees in the recent upheaval. He also said in his note that a board of directors – including former Salesforce CEO Bret Taylor, former secretary of the Treasury Larry Summers and Quora CEO Adam D’Angelo – would build a new board for the start-up.
– Reuters reported that activist investor Nelson Peltz is pushing ahead with plans to seek at least three board seats at Disney because Trian, his investment firm, is not satisfied with changes proposed by the entertainment company’s senior management. The move comes after Disney extended an offer for Trian to meet with the company’s board but rejected the activist shareholder’s request for seats on a board that will soon have 12 members. Trian has kept a close eye on the entertainment and media giant ever since chief executive Bob Iger returned from retirement a year ago to run Disney again. Earlier this year, Peltz criticized Disney’s capital spending, its loss-making streaming business and its succession plan, and sought a voice on the board. He then aborted a board challenge to give Iger time to ‘right the ship’ after the chief executive outlined his turnaround plans.
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...
