PhotoJeff Bezos, the chief executive of Amazon, said he bought The Washington Post because it was well situated to be a powerful government watchdog. "If it had been a financially upside-down salty snack food company, I would not have bought it," he said on Tuesday.Credit Alex Wong/Getty Images
RANCHO PALOS VERDES, Calif. — Jeff Bezos built Amazon into an e-commerce and computing powerhouse. Now his ambitions are more sprawling as he takes on ever larger civic and business challenges.
Those diverse interests were on display on Tuesday when Mr. Bezos, Amazon's chief executive, spoke onstage at the Code technology conference here, where he commented on an array of topics, including workplace culture, privacy and his decision to buy The Washington Post in 2013.
Mr. Bezos said he bought the newspaper because he wanted to make it into a more powerful national — and even global — publication, and that The Post was well situated to be a watchdog over the leaders of the world's most powerful country. "If it had been a financially upside-down salty snack food company, I would not have bought it," he said.
The Amazon chief also addressed an investigation last summer by The New York Times that found the company had a tough workplace culture. Mr. Bezos said the article had not made him rethink how Amazon treated employees and that the company was "the gold standard for pioneering work."
He also commented on the tension between privacy and national security, calling it "the issue of our age" and noting that Amazon had filed a court brief supporting Apple during its recent battle with the Federal Bureau of Investigation over an iPhone used by one of the attackers in a shooting in San Bernardino, Calif., last December.
Mr. Bezos' comments come at a time when he and Amazon are riding on new highs. After a rough patch in which Amazon's sales fell short of expectations and new products like the Fire Phone flopped, the company is flourishing. A bet Mr. Bezos placed on cloud services more than a decade ago has blossomed into a $ 10-billion-a-year business, leading Amazon to the biggest profit in its history in the first quarter of 2016. The Echo, Amazon's smart speaker, has earned raves from technology reviewers and customers.
Mr. Bezos' personal profile has also soared with his acquisition of The Post. Under his ownership, the newspaper's online audience has grown. The Post reported 30 percent year-over-year growth in unique digital visitors in April.
A couple of weeks ago, Mr. Bezos traded shots with the presumptive Republican presidential nominee, Donald J. Trump, who accused Mr. Bezos of dodging corporate taxes and abusing his position as owner of The Post to launch personal attacks and to keep lawmakers from scrutinizing Amazon.
Mr. Bezos said at the time that Mr. Trump's unsubstantiated statements were "not an appropriate way for a presidential candidate to behave" and that he welcomed scrutiny and criticism of Amazon.
On Tuesday, Mr. Bezos reiterated it was "not appropriate" for Mr. Trump to "freeze or chill the media that are examining him."
"It's just a fact that we live in a world where half the population of this planet, if you criticize the leader, you'll go to jail or worse," Mr. Bezos said. "We live in this amazing democracy with amazing freedom of speech, and a presidential candidate should embrace that."
Mr. Bezos also predicted that global population growth and energy demand would increase pressure to make space more accessible. He owns a space exploration start-up called Blue Origin.
He predicted that heavy industry would move off the planet and "earth will be zoned residential and light industrial."
Electric car company Tesla held its annual shareholder's meeting on Tuesday afternoon in Mountain View, Calif., and the event was partly a trip down memory lane, partly a confessional of early missteps, and partly a series of thank you's to partners and employees that helped build Tesla over its 13-year history.
In an event that spanned over three and a half hours, Tesla CEO Elon Musk and CTO JB Straubel—in addition to a series of Tesla executives—candidly discussed many of the issues and problems that plagued a young, inexperienced, and cash-strapped Tesla in its early days. Musk also talked about more recent problems for Tesla, like challenges with getting the software and doors to work on its Model X, an electric SUV car.
Musk said that he thought Tesla TSLA had a 10% chance of succeeding when he started the company, working with engineer and co-founder Straubel. Musk described their early efforts building the company as having "no idea what we are doing," and "completely clueless." Musk said he wanted to put in 99% of the Series A funding because he thought the company's chances were so low that he didn't want to lose investors' and friends' money.
Tesla is updating the look of the Model S to make it more closely align with the Model X SUV.Courtesy of Tesla
Straubel said the early Tesla employees knew the risks and felt the same way, but that they thought it was "worth taking the risk" if they could make a positive effect on the world.
Musk noted that when the company has made mistakes over the years that it was because they were being "foolish or stupid," but not because they had nefarious motivations. We've always had "the right motivations," said Musk, adding, "We say the things that we believe even when sometimes those things are delusional."
The creation of Tesla was based on some false principles, which "turned out to be staggeringly dumb," Musk detailed, as he regularly referenced a sweeping visual timeline that started in 2003 when he met Straubel and ran to the present. One false principle was that the company's first car, the Roadster, could be built around core technology from a startup based in Southern California called AC Propulsion, which made drive trains for an electric sports car called the Tzero.
For more on Tesla's Model X watch our video.
That technology from AC Propulsion could not be reproduced and commercialized, said Musk and Straubel. That was partly because the information system that ran the motor was analog, instead of digital, so engineers had to rewrite all of the code involved. Another reason was because the AC Propulsion battery pack was air-cooled, which didn't provide enough cooling for batteries that get hot when they discharge to power an electric car. Tesla later converted the Roadster's battery pack to be liquid-cooled instead.
Another false premise was that Tesla could just use the AC Propulsion tech and stick it in a car body supplied by Lotus Cars, a British car maker. There were major issue with converting the technology to fit it in the small Lotus car body, including that the battery pack was just too big for the car and Tesla had to stretch the car's body. In addition, the Lotus car couldn't use the air conditioning system because that relied on the gas engine power, so Tesla had to remake the air conditioning system.
It wasn't a good idea to simply convert an existing gas-powered vehicle (in Tesla's case, the Lotus car) into an electric one, said Musk. Changing a car from gas-powered to battery-powered, also invalidated all of the crash tests and safety standards that the Lotus car had already achieved.
In the end, Tesla used 6% to 7% of the original technology from AC Propulsion and the Lotus body union, said Musk. "We needed new all new suspension, all new brakes," Straubel noted. Musk compared the Roadster development process as similar to wanting to build a house, but instead of building it from scratch, taking an existing house and modifying everything in it but one wall in the basement.
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The result of this hodge podge of technology, among other things, was that there were serious issues with early Tesla Roadsters. At the end of the shareholder event, an early Roadster owner asked Musk a question, and Musk responded by first apologizing to the customer for technical problems that the owner most likely had experienced.
Musk told an anecdote of how he gave Google goog co-founders Larry Page and Sergei Brin a test ride in an early Roadster and divulged that the car wouldn't drive above 10 miles per hour. "I was like I swear guys it goes way faster than this," said Musk. The Google founders "were kind enough to put a little money in the company despite the world's worst demo," reminisced Musk.
Musk and Straubel launched the Roadster during a launch party in 2006. After giving potential Tesla customers rides all night at the party, "the cars were destroyed" from overuse, remembered Straubel. The team ended up pumping ice water into the cars to cool down the batteries, said Straubel.
Courtesy of Tesla
One of the biggest issues with the early Roadsters was that the transmission didn't work, recalled Musk. The car technically passed all regulations, but "was completely unsafe," it "broke down all the time," and it "didn't really work," said Musk. It was stuck in second gear, he added.
Part of the Roadster technical problems were because of the outsourced and slow production process. In the traditional auto industry, auto suppliers from all over the world will send an automaker parts over many months and the automaker might not know if there's a problem for maybe 6 months. That means that the automaker might have been selling faulty car tech for a half year.
From 2008 to 2009, Tesla decided to redesign its entire production process, said Musk, rebooting the design of car, the technology, changing out many of its suppliers, and bringing a lot of its tech in house. We had the misguided idea that anything built in Asia was better and cheaper, said Straubel.
Originally Tesla decided to buy its battery packs from a supplier in Thailand that made barbeques, but the technical and organization problems were insurmountable. In 2008, Tesla brought its battery pack production in house to its small operations at the time in San Carlos, Calif. "Manufacturing things in the Peninsula is considered super mad," said Musk of the move.
Tesla didn't start selling Roadsters with a positive gross margin until the end of 2009. In essence, Tesla lost money on every car sold before then.
Part of the reason that Musk wanted to air some of Tesla's missteps was because he said he wants entrepreneurs building new things to know they can make mistakes and start companies in areas in which they don't have a history.
Tesla is a much more stable company now than it was close to a decade ago. But the company still has faced some major technical issues with its recent cars, in particular with its Model X SUV. The software to control the sweeping doors of the Model X has been very difficult to manage, admitted Musk.
The problems with the Model X likely aren't behind Tesla just yet. "We're almost there in making the doors useful," promised Musk, adding that in a month or so, the doors will likely be better doors than regular doors—but they aren't right now.
This high-flying lifestyle isn't actually behind the company. It's still a core tenant of how Tesla operates.
Tesla is still taking major risks and operating like the nimble startup it once was, despite being a public company with an over $ 30 billion market cap. Whether that's still a good idea or not at this stage remains to be seen, but Tesla has managed to survive so far.
Next up for the company: build the world's largest battery factory, launch a mainstream electric car, and sell batteries to power buildings and the energy grid. No big whoop, right? It'll likely be some of these lessons learned—adjusting to mistakes, rethinking systems, and the long hours it takes to accomplish those tasks—that could get the company there.
So what about price? At Starbucks, a grande (large, 16 fl. oz.) nitro will range in price from $ 3.25 to $ 3.95, depending on the market. This works out to be just a bit more than Starbucks’ cold brew (which launched at $ 3.25 for a grande last year) and around a dollar more than a regular iced coffee. At Stumptown, which has only 11 locations nationwide and roasts its beans in smaller batches, a 12-ounce cold brew costs no more than $ 3.50; the same size nitro costs $ 4.50 (price varies by market). Of note: While iced coffee and cold brew are served on ice, nitro is served directly from the cold tap at both Starbucks and Stumptown, and served neat. Either way, the taste, and experience, of drinking iced coffee, cold brew, or nitro is significantly different.
Starbucks’ nitro launch will happen in waves. Four Seattle-area locations already serve the beverage. By this summer’s end, it will be served at locations in New York, Chicago, Boston, San Francisco, and Los Angeles as well.
In addition to launching nitro coffee, Starbucks is unveiling a new drink today: Vanilla Sweet Cream Cold Brew is cold brew coffee served on ice and topped with a float of house-made vanilla sweet cream, made from milk, cream, and vanilla-flavored syrup. This is Starbucks taking a cue from third wave coffee’s cold brew darling and innovating on top of it, adding flavoring and sugar — two elements that have become something like Starbucks’ signature.
The introduction of nitro coffee is an interesting move for Starbucks, a company that was at the forefront of coffee’s second wave. Once an innovator in the coffee sector, Starbucks created and captured a new generation of coffee drinkers in the ’80s and ’90s by introducing flavored brews and Frappuccinos. Today, with coffee’s third wave well under way, Starbucks is playing catch up. Rather than simply innovate, the coffee giant is inspired by the small, obsessive coffee shops that have popped up in large cities across the country. The roasters and baristas behind these shops are pushing coffee drinkers to expect more, better, and fresher brews. Demand for quality coffee isn’t waning. But can Starbucks simultaneously cater to consumers who like their Pumpkin Spice Lattes and those who want a flat white? With this nationwide nitro launch, it’s clearly betting on it.
Great Plains Energy Inc.'s $ 8.6 billion deal to buy Westar Energy Inc. shows the high risk some power companies are willing to take to grow through acquisitions.
The Kansas City, Missouri, utility owner is paying a premium of at least 23 times Westar's 2017 expected earnings, making it one of the richest utility deals in recent history, according to SunTrust Robinson Humphrey Inc. and Evercore ISI. Great Plains will nearly triple its debt to acquire its neighbor and almost double its electric customer base to about 1.6 million.
"It is a rich deal and it's a fairly large acquisition given their size," said Ali Agha, managing director for equity research at SunTrust Robinson Humphrey. "It's a huge premium to other transactions and it's a huge premium to the stand alone public companies."
The transaction comes amid a boom in utility mergers and acquisitions as customers using more energy-efficient appliances and resources such as rooftop solar flatten electricity demand. There were about $ 52 billion worth of utility deals pending or completed across the U.S. last year, the most since 2011, data compiled by Bloomberg show.
Great Plains shares fell 5.9 percent to close at $ 29.18 after slumping as much as 8.1 percent earlier. Westar rose 6.4 percent to $ 56.33.
Credit Ratings
The debt-laden deal may cause the credit rating on Great Plains' holding company to slip, though it will maintain its investment grade, Chief Executive Officer Terry Bassham said in a call with analysts Tuesday.
"The key to the deal is going to be synergies and what they can do with that," Agha said.
Great Plain's debt will increase from more than $ 4.2 billion at the end of 2015 to $ 12.2 billion after assuming Westar's obligations and issuing $ 4.4 billion of new debt to finance the deal, Chief Financial Officer Kevin Bryant said in a phone interview. New debt will include multiple tenures from five to 30 years with "a bit of a bias on the shorter end," he said.
Given the company's current long-term credit rating of Baa2 from Moody's and BBB+ from S&P Global Ratings, "we have little bit of room," Bryant said. "We are not only adding debt. We would be adding cash flows."
Bond Spreads
Goldman Sachs Group Inc., which is advising Great Plains, will provide about $ 8 billion of debt financing for the deal, the companies said in a statement Tuesday. Pension fund Ontario Municipal Employees Retirement System will make a $ 750 million mandatory preferred convertible equity investment in the company once the deal closes, which is expected in the spring of 2017. To help finance the transaction, Great Plains plans to issue equity before the deal closes.
"They are adding enough leverage to the situation that their ratings will be under pressure," and that will in turn pressure their bond spreads, said Phil Adams, an analyst in Chicago at debt researcher Gimme Credit. "Strategically I like the deal from everything I've heard so far. It doesn't seem like it's going to be too difficult to get the thing approved."
Size Matters
Great Plains has a value of about $ 4.8 billion compared with Westar, the biggest utility in Kansas, worth about $ 7.5 billion. Great Plains has about 838,000 customers in Missouri and Kansas, according to the company's website.
"The challenge obviously is that Westar is a bigger company than Great Plains so they are biting off a mouthful," said Tim Winter, utility analyst with Gabelli & Co. in St. Louis. Financing will be a "manageable challenge."
Great Plains beat out at least one power giant in wooing its Kansas partner. Westar CEO Mark Ruelle called the process competitive but "confidential" and declined to disclose other bids. Westar had also drawn interest from Ameren Corp. and an investor group that includes Borealis Infrastructure Management Inc. and the Canada Pension Plan Investment Board, people familiar with the matter said last month, asking not to be identified because the information wasn't public.
"The transaction fulfills everything that we've been saying about the subject of M&A, that is the consolidation will continue, that eventually size matters and in considering whether to be a consolidator or among those consolidated, companies have to pick a line," Ruelle said in the call.
As OPEC ministers gather in Vienna, they may notice more sport utility vehicles on the streets of the Austrian capital than on previous visits.
Last year, SUVs outsold any other type of passenger vehicle in Europe for the first time, according to auto industry consultants JATO Dynamics. The trend has continued in 2016, with demand for SUVs such as the Hyundai Tucson and the Renault Kadjar accounting for a quarter of sales in the biggest European countries.
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Europe is a mirror of what's happening across the world. From China to the U.S., drivers are buying bigger vehicles, while sales of fuel-efficient hybrids struggle.
For Saudi Arabia, Iran and other members of the Organization of Petroleum Exporting Countries, due to meet on Thursday, the sharp increase in sales of gas guzzlers is good news: It means stronger demand for gasoline and diesel for years to come.
"The trend of fuel-efficiency improvement of the last few years could be stopped by low oil prices," said Christof Ruhl, head of research at the Abu Dhabi Investment Authority, the emirate's sovereign wealth fund, and a former chief economist at BP Plc.
For a Gadfly column on Saudi Arabia's oil-market strategy, click here.
Take the U.S., home of the oil shale revolution and the world's largest oil consumer. The average car sold in April achieved a fuel economy of 25.2 miles per gallon, down from a peak of 25.8 set in August 2014, just before oil prices crashed, according to data from the Transportation Research Institute at the University of Michigan. At current trends, this year will mark the first drop in average U.S. fuel economy since at least 2007, the data show.
U.S. average sales-weighted fuel-economy rating
"Fuel-economy improvement is really flatlining," said Sam Ori, executive director of the Energy Policy Institute at the University of Chicago. "The gains completely stopped right at the same time that oil prices started to decline."
Today in the U.S., light trucks, vans and SUVs account for 60 percent of total vehicle sales — a level only reached briefly in 2005, when Brent crude, the global oil benchmark, averaged $ 55 a barrel. It's now around $ 50. The International Energy Agency said in May that less-efficient vehicles, including four-wheel drives, "remain very much in vogue, a consequence of persistently lower retail pump prices."
Gas Guzzlers
In 2008, when oil prices averaged $ 100 a barrel, the share of gas guzzlers in U.S. total vehicles sales dropped at one point to just 43 percent.
Popular light trucks such as the Ford F150, the Chevrolet Silverado and the Dodge Ram achieve as little as 17 to 22 miles per gallon compared with as much as 50 to 55 miles for smaller, more efficient cars. The most popular SUVs in Europe also achieve relatively high mileage.
With larger vehicles hitting the roads and Americans driving longer distances as the economy recovers, U.S. gasoline consumption is set to rise to a record in 2016, according to the Energy Information Administration. U.S. gasoline demand will average 9.3 million barrels a day this year, surpassing the peak set in 2007, the EIA said in its most recent monthly report.
U.S. demand for motor fuel peaks between the Memorial Day holiday in late May and Labor Day in early September, when Americans traditionally take vacations. The EIA forecast U.S. drivers will enjoy the cheapest gasoline this driving season in 12 years.
"It's so cheap that it spurs demand," Mike Loya, a senior executive at Vitol Group BV, the world's largest independent oil-trading house, said in an interview in April from Houston.
In China, the world's second-biggest oil consumer, drivers are also opting for larger vehicles as never before. While cheaper gasoline and diesel helps, analysts said it's higher incomes — and a desire to impress relatives and friends — that's driving the purchases. According to official data, vehicles such as light trucks and SUVs accounted for almost 35 percent of total Chinese passenger sales in April, up from 10 percent in 2010 and less than 5 percent a decade ago.
“Consumers are thinking that a period of plentiful oil supply is here to stay,” said Ruhl of the Abu Dhabi Investment Authority.
Perversely, their behavior could mean that oil prices rise sooner rather than later, as fuel-thirsty vehicles help demand catch up with supply. For OPEC ministers in Vienna, the sight of four-wheel-drive vehicles on the perfectly smooth streets of the Austrian capital is good news.
India announced Tuesday that its economy expanded at 7.9% in the three months to April, making it the world's fastest-growing major economy. That may sound like reason for Narendra Modi to celebrate, but the Prime Minister has much more to do to make good on his ambitious promises to ordinary Indians.
Since coming to office in 2014, Mr. Modi's government has addressed some of the many obstacles to private enterprise and bottlenecks in the economy. It reduced foreign-ownership restrictions in many industries, made government more transparent and improved the country's score on the World Bank's ease of doing business survey.
Yet improving the performance of government isn't the same as reducing the state's role in the economy. India still isn't creating enough new jobs to absorb the million young Indians entering the workforce every month. Labor Bureau statistics show that the eight biggest labor-intensive industries added 100,000 new jobs last year, compared to 400,000 in 2014. One bank calculates that for every percentage point of GDP growth, employment now grows 0.15 of a point, down from 0.39 in 2000.
One reason is that private capital expenditures shrank last year. Many companies are using profits to deleverage, reflecting uncertainty about the future. Total investment is up, but only because of government spending on roads, railways and ports.
The parlous state of India's banking system is partly to blame. The Reserve Bank of India is forcing banks to write off bad loans and the government has set aside $ 3.7 billion to recapitalize state-owned banks, which account for 70% of lending. But so far there's no plan to privatize those banks and eliminate the moral hazard created by government bailouts. Until bank balance sheets return to health, large companies and government entities are borrowing abroad.
Large companies are also held back by outdated labor regulations. It is virtually impossible to lay off workers legally, which drives jobs into the underground economy. Some $ 10 billion in road projects are on hold because of disputes over buying land. AppleAAPL-0.77% CEO Tim Cook was told last month that he would have to move manufacturing to India before the company could open Apple stores.
In an interview with the Journal last week, Mr. Modi said he has undertaken "maximum reforms." He blamed the opposition Congress Party for blocking key labor and land reforms and said his government has allowed states to take the initiative. Congress certainly deserves blame, especially for holding up reform of the Goods and Services Tax. But Mr. Modi chose to be cautious in pushing reforms that risked a public backlash. Instead he pushed for rural access to banking and better hygiene.
He also can't seem to let go of his statist instincts, saying that government has a "very important role to play" in the economy. He didn't mention that a government audit found that by last year 157 companies controlled by New Delhi had accumulated losses of $ 16.5 billion.
The ruling coalition's strong showing in state elections last week gives Mr. Modi another political opening to press for deeper reforms. He might remember that his predecessor, Manmohan Singh, came undone when he rested on his own growth laurels.
That business, which employs the overwhelming majority of the striking workers, has declined in profitability in recent years as mobile phone service and hand-held devices have gained popularity. Many of the company's competitors are not unionized and, therefore, better able to rein in labor costs.
The unions say the company is more than profitable enough — with nearly $ 18 billion in net income last year — to support a large work force with good benefits and wages.
They say that Verizon's fiber-optic Fios network, which provides telephone, video and Internet service, remains lucrative. But they argue that the company's interest in it has flagged because the labor costs are much higher than for its wireless business, which is overwhelmingly nonunion.
Perhaps the most consequential issue at stake in the standoff was Verizon's ability to outsource work. The previous contracts included a provision requiring that a certain percentage of customer calls originating in a state be answered by workers in that state — ranging from just over 50 percent for some types of calls in some states to more than 80 percent in others. Verizon sought to significantly lower those numbers.
Under the tentative new contracts, a similar percentage of calls must be answered by a unionized worker somewhere in Verizon's wireline footprint, which runs from Virginia to Massachusetts, rather than the particular state from which the call originates.
Both sides claimed victory in the change.
"We only care that our members somewhere in the footprint are doing the work," said Robert Master, assistant to the District 1 vice president of the Communications Workers of America. "The push to outsource call center work was rebuffed."
Lending partial vindication to this claim was a commitment by the company to create over 1,000 unionized call center jobs over the next four years to accommodate new demand from customers. The company also agreed to reduce the number of call center closings.
For its part, Verizon argued that the new call center rule would allow it to wring out inefficiencies. Under the old contracts, a call that originated in New York City would frequently be answered in New York City, then transferred to New Jersey or another state, where a worker with the right expertise could handle it. Now, the representative in New Jersey can answer the call directly more often.
"It's a big deal; it eliminates an unnecessary step," said Richard J. Young, a Verizon spokesman. "It's all about minutes here and there. Minutes add up to hours; hours add up to jobs."
The company also won the right to offer buyout incentives to employees once a year without first getting the union's blessing, making it easier to eliminate jobs that the new rule could eventually render obsolete.
Elsewhere, the outcome appeared more one-sided. The unions managed to beat back proposed pension cuts, including a cap on the accrual of pension benefits after 30 years of service.
The company also agreed to withdraw a proposal that would have allowed it to relocate workers for up to two months anywhere in its geographic coverage area, although it had already expressed an openness to withdrawing the proposal before the strike.
Proposals to change seniority rules and to make the company's sickness and disability policy more strict were also withdrawn, and the company agreed to change a performance review program in New York City that many workers considered abusive.
Significantly, the new contracts also cover some 65 unionized workers at Verizon Wireless stores, signaling the first time that retail wireless workers at the company have been included in a union contract, a potentially important precedent.
Some labor experts argued that these victories could reverberate through the broader economy.
"Workers over all have been greatly diminished in their bargaining power, and wages have been stagnant for quite some time," said Jeffrey H. Keefe, a professor emeritus at the Rutgers School of Management and Labor Relations, who has studied the telecom industry for decades. "I want to see the details of this contract, but this may be a real shot in the arm for unions."
Verizon, for its part, also achieved at least one clear victory in the new contracts: hundreds of millions of dollars in health care cost savings.
The unions had largely indicated that they would accept these health care measures before the strike.
The standoff between the two sides grew more bitter during the first month after the strike began in April, and the unions came under particular strain when Verizon discontinued health care benefits for the striking workers on May 1.
But the tone appeared to shift in mid-May, after Labor Secretary Thomas E. Perez and Allison Beck, director of the Federal Mediation and Conciliation Service, began to broker the talks.
Verizon had initially predicted that the strike would not materially affect its financial position in the second quarter, but its chief financial officer conceded at a recent investor conference that the strike's effect on installations could hurt the company's performance.
Mr. Keefe said that it was quite rare for a strike in the telecom industry to have a significant economic impact on the target company, as opposed to a public relations impact. But, he said, Verizon may have been vulnerable because so few of its replacement workers, typically managers, had experience with installations.
"There's more to running a network than hiring a few replacement workers and running them through school," Mr. Keefe said.
Mr. Young, the Verizon spokesman, rejected that argument, saying Verizon's replacement workers had begun installing Fios for new customers a few weeks earlier than initially planned, and for more customers than expected.
The company's real miscalculation may have been its assessment of the unions' ability to hold out.
"The total number of installations is off, and it's not unexpected, considering it was a six-week strike," Mr. Young said. "You never know going in. You hope it's a short duration, but you have to deal with the hand you're dealt."
A job seeker (R) meets with recruiters during a career fair in San Francisco. The Labor Department releases the May jobs report on Friday.(Photo: Justin Sullivan, Getty Images)
A jam-packed week of economic news features a jobs report that could tip the scales on whether the Federal Reserve raises interest rates at a mid-June meeting after standing pat since December. Also, look for reports on consumer confidence and spending, and surveys of the manufacturing and service sectors.
On Tuesday, the Commerce Department releases data on personal income and spending that should show financially healthy consumers finally loosening the purse strings. Americans are benefiting from solid job and income growth, reduced household debt and low, if rising, gasoline prices. Consumption was decent in the first quarter but tempered by a slowdown in auto sales and warm weather that curbed heating demand. Meanwhile, April retail sales recorded the largest gain in two years, and so economists expect Commerce to report a robust 0.6% jump in spending.
Consumer sentiment, which can foreshadow future spending, likewise has been buoyed by rising stock prices, steady job growth and a tightening labor market that's pushing up wages. The favorable landscape should more than offset any drag from rising gasoline prices, PNC Financial Group says. Economists expect the Conference Board to report a rise in its consumer confidence index to a healthy 96.2 in May.
The manufacturing sector has been wallowing on the negative side of the economy's ledger, though it has stabilized somewhat recently. Factories have throttled back in response to the oil-patch downturn and a weak global economy and strong dollar, which have hammered exports. This year, oil prices have risen and the dollar has weakened but those developments have yet to drive a rebound for manufacturers. Economists expect the Institute for Supply Management (ISM) to report Wednesday that its index of manufacturing activity dipped in May but remained in expansion territory, if just barely.
Friday's employment report is expected to reveal the labor market bounced back in May after job gains slowed in April — but that likely won't be reflected in the headline number. The Verizon workers' strike probably removed about 40,000 union workers from payrolls, says Lewis Alexander, chief U.S. economist of Nomura. As a result, economists expect the Labor Department to report 170,000 payroll gains in May, up from 160,000 the previous month but below the recent 200,000-plus average. Such a showing, along with a bump in wage growth, could give Fed policymakers ammunition for a June rate hike, though many economists believe the Fed will wait until July or September.
Continued service-sector growth could give Fed policymakers another reason to make a move. Services firms have reaped gains from healthy consumer spending and the housing recovery. Economists expect ISM to announce its index of service-sector activity was roughly flat in May, but solidly in expansion mode.
* Senn died on Friday, six months after leaving Zurich
* Comes less then three years after finance chief’s suicide (Adds details and reaction)
By Paul Arnold and Michael Shields
ZURICH, May 30 Former Zurich Insurance boss Martin Senn has committed suicide six months after leaving the company under a cloud, a tragedy that comes less than three years after Zurich’s finance chief took his own life.
Senn, 59, shot himself at his family’s Alpine resort home in Klosters, Swiss newspaper Blick reported. He had quit as chief executive of Zurich in December following a series of profit warnings and a botched takeover of British rival RSA.
“Martin Senn’s family has informed us that Martin committed suicide last Friday,” the company said in a statement on Monday, adding it was “stunned and deeply shaken”.
His death follows the suicide of Zurich’s finance chief Pierre Wauthier in August 2013, which brought into sharp focus the pressures facing senior corporate executives in Switzerland and elsewhere.
Wauthier, 53, killed himself after writing a suicide note addressed “To whom it may concern” in which he described becoming demoralised by what he called a new, more aggressive tone at Zurich under then-Chairman Josef Ackermann.
Ackermann, a former head of Deutsche Bank, denied any wrongdoing but quit soon after Wauthier’s death.
Weeks before Wauthier’s death, Swisscom Chief Executive Carsten Schloter had taken his own life.
Senn had been CEO since 2010 at Zurich, which he joined after stints with Swiss banks in Asia. He was married to a Korean musician and had two grown children.
Acquaintances, who asked not to be named given the sensitivity of the situation, described him as withdrawn and reclusive following his departure from the company, which Zurich said at the time was by mutual agreement.
“He wasn’t doing so well,” a former colleague said, but added that Senn had not given the impression of being suicidal.
One person close to Senn said he had taken Wauthier’s death hard.
The rate of suicide has been falling in most countries in Europe since 2000, according to Ulrich Hegerl of the German Depression Foundation, a charity to prevent suicide.
He said a suicide sometimes encourages other people to do the same. “If someone you know and respect commits suicide, then there is a risk in depression of a copycat suicide,” he added.
Zurich Insurance paid Senn 2.5 million Swiss francs in 2015, its annual report showed in March.
His failure to meet performance targets, in an insurance sector that has struggled since the financial crisis, meant he missed out on an extra stock payout. (Additional reporting by Angelika Gruber, John Miller and Oliver Hirt in Zurich; Editing by John O’Donnell and Pravin Char)
That business, which employs the overwhelming majority of the striking workers, has declined in profitability in recent years as mobile phone service and hand-held devices have gained popularity. Many of the company's competitors are not unionized and, therefore, better able to rein in labor costs.
The unions say the company is more than profitable enough — with nearly $ 18 billion in net income last year — to support a large work force with good benefits and wages.
They say that Verizon's fiber-optic Fios network, which provides telephone, video and Internet service, remains lucrative. But they argue that the company's interest in it has flagged because the labor costs are much higher than for its wireless business, which is overwhelmingly nonunion.
Perhaps the most consequential issue at stake in the standoff was Verizon's ability to outsource work. The previous contracts included a provision requiring that a certain percentage of customer calls originating in a state be answered by workers in that state — ranging from just over 50 percent for some types of calls in some states to more than 80 percent in others. Verizon sought to significantly lower those numbers.
Under the tentative new contracts, a similar percentage of calls must be answered by a unionized worker somewhere in Verizon's wireline footprint, which runs from Virginia to Massachusetts, rather than the particular state from which the call originates.
Both sides claimed victory in the change.
"We only care that our members somewhere in the footprint are doing the work," said Robert Master, assistant to the District 1 vice president of the Communications Workers of America. "The push to outsource call center work was rebuffed."
Lending partial vindication to this claim was a commitment by the company to create over 1,000 unionized call center jobs over the next four years to accommodate new demand from customers. The company also agreed to reduce the number of call center closings.
For its part, Verizon argued that the new call center rule would allow it to wring out inefficiencies. Under the old contracts, a call that originated in New York City would frequently be answered in New York City, then transferred to New Jersey or another state, where a worker with the right expertise could handle it. Now, the representative in New Jersey can answer the call directly more often.
"It's a big deal; it eliminates an unnecessary step," said Richard J. Young, a Verizon spokesman. "It's all about minutes here and there. Minutes add up to hours; hours add up to jobs."
The company also won the right to offer buyout incentives to employees once a year without first getting the union's blessing, making it easier to eliminate jobs that the new rule could eventually render obsolete.
Elsewhere, the outcome appeared more one-sided. The unions managed to beat back proposed pension cuts, including a cap on the accrual of pension benefits after 30 years of service.
The company also agreed to withdraw a proposal that would have allowed it to relocate workers for up to two months anywhere in its geographic coverage area, although it had already expressed an openness to withdrawing the proposal before the strike.
Proposals to change seniority rules and to make the company's sickness and disability policy more strict were also withdrawn, and the company agreed to change a performance review program in New York City that many workers considered abusive.
Significantly, the new contracts also cover some 65 unionized workers at Verizon Wireless stores, signaling the first time that retail wireless workers at the company have been included in a union contract, a potentially important precedent.
Some labor experts argued that these victories could reverberate through the broader economy.
"Workers over all have been greatly diminished in their bargaining power, and wages have been stagnant for quite some time," said Jeffrey H. Keefe, a professor emeritus at the Rutgers School of Management and Labor Relations, who has studied the telecom industry for decades. "I want to see the details of this contract, but this may be a real shot in the arm for unions."
Verizon, for its part, also achieved at least one clear victory in the new contracts: hundreds of millions of dollars in health care cost savings.
The unions had largely indicated that they would accept these health care measures before the strike.
The standoff between the two sides grew more bitter during the first month after the strike began in April, and the unions came under particular strain when Verizon discontinued health care benefits for the striking workers on May 1.
But the tone appeared to shift in mid-May, after Labor Secretary Thomas E. Perez and Allison Beck, director of the Federal Mediation and Conciliation Service, began to broker the talks.
Verizon had initially predicted that the strike would not materially affect its financial position in the second quarter, but its chief financial officer conceded at a recent investor conference that the strike's effect on installations could hurt the company's performance.
Mr. Keefe said that it was quite rare for a strike in the telecom industry to have a significant economic impact on the target company, as opposed to a public relations impact. But, he said, Verizon may have been vulnerable because so few of its replacement workers, typically managers, had experience with installations.
"There's more to running a network than hiring a few replacement workers and running them through school," Mr. Keefe said.
Mr. Young, the Verizon spokesman, rejected that argument, saying Verizon's replacement workers had begun installing Fios for new customers a few weeks earlier than initially planned, and for more customers than expected.
The company's real miscalculation may have been its assessment of the unions' ability to hold out.
"The total number of installations is off, and it's not unexpected, considering it was a six-week strike," Mr. Young said. "You never know going in. You hope it's a short duration, but you have to deal with the hand you're dealt."
St. Louis Federal Reserve President James Bullard speaks at a public lecture on ”Slow Normalization or No Normalization” in Singapore May 26, 2016.
Reuters/Edgar Su
St. Louis Federal Reserve President James Bullard said on Monday global markets appear to be “well-prepared” for a summer interest rate hike from the Fed, although he did not specify a date for the policy move.
“My sense is that markets are well-prepared for a possible rate increase globally, and that this is not too surprising given our liftoff from December and the policy of the committee which has been to try to normalize rates slowly and gradually over time,” Bullard told a news conference after speaking at an academic conference in Seoul.
“So my ideal is that if all goes well this will come off very smoothly.”
Bullard added a rebound in U.S. GDP growth seems to be materializing in the second quarter, but reserved his opinion on whether the Fed should hike in June or July for the next policy meeting at the U.S. central bank.
His comments followed revised data on Friday that showed first quarter growth in the U.S. was not as weak as initially expected.
Responding to the GDP data, economists said strong income growth, together with signs the economy was picking up steam in the second quarter, could give the Federal Reserve ammunition to raise interest rates as early as next month.
Answering a question on whether he thought U.S. presidential candidate Donald Trump would bring change to monetary policy if elected, Bullard said the Fed was independent and did not follow any particular political prescription.
“I don’t think a change in the White House either way will affect Fed policy,” he said. “My hope is that neither campaign is interested in politicizing the Fed.”
Meanwhile, Bullard noted he had been critical of the Fed’s “dot plot” summaries of policymakers rate outlooks recently, saying they may be giving too much forward guidance, removing the Fed’s ability to make data-dependent decisions.
The dollar rallied against Asian currencies early on Monday after the revised GDP data and on Fed Chair Janet Yellen’s comments on Friday that a rate hike in the U.S. in coming months would be appropriate.
The Korean won KRW= extended losses after Bullard’s comments, trading down 0.9 percent against the dollar as of 0142 GMT (09:42 p.m. EDT).
The Fed most recently raised interest rates in December last year, which was the first rate hike in nearly a decade.
(Reporting by Christine Kim and Se Young Lee; Editing by Eric Meijer)
Bayer AG is close to choosing banks to arrange funds for its proposed acquisition of Monsanto Co., according to people familiar with the matter, after the U.S. company rejected the initial $ 62 billion bid as too low and sought reassurances on the potential financing.
Bayer will probably raise more than $ 40 billion in short-term bridge financing and most of the remainder in term loans, said the people, who asked not to be identified because the talks are private. The German company interviewed lenders at its headquarters in Leverkusen this week and is likely to select about half a dozen banks next week, the people said.
Funding negotiations are continuing and the amounts could change, the people said. Banks are likely to offer additional financing to give Bayer room to increase its offer if needed, said the people. A spokesman for Bayer declined to comment.
Providing the terms of the funding may help allay Monsanto's concerns about the financing and let talks advance on Bayer's bid to become the world's biggest supplier of farm chemicals and seeds. On Tuesday, Monsanto said that while the original offer was inadequate, it's open to further negotiations. Bayer remains confident about reaching an agreement on the deal, which would be the largest this year and biggest ever by a German company.
Bridge Loans
Bayer is considering selling convertible debt for $ 2 billion to $ 3 billion, two of the people said. Banks are offering $ 40 billion to $ 50 billion in bridge loans, the people said. These are short-term funds provided by lenders in an acquisition while the buyer arranges longer-term funding such as term loans and bonds. The term loans could total more than $ 20 billion, one of the people said.
Bank of America Corp. and Credit Suisse Group AG are Bayer's main advisers and financiers. Rothschild is also advising Bayer.
Shares of Bayer closed 0.4 percent lower at 85.33 euros in Frankfurt on Friday. The stock has dropped 15 percent since May 11, the day before Bloomberg News reported that Bayer was exploring a possible bid. Monsanto, which has climbed 21 percent in the same period, closed 0.1 percent lower at $ 109.49 in New York on Friday.
Relying on Debt
In unveiling its May 10 offer of $ 122 a share in cash, Bayer said the transaction would be funded with a combination of debt and equity, with about a quarter of the $ 62 billion in enterprise value coming from selling shares to existing investors. Bayer may also sell new hybrid bonds "to a very limited extent," while relying largely on senior debt, Chief Financial Officer Johannes M. Dietsch told analysts on Monday.
Bayer will probably make a higher bid, Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co. in New York, said Tuesday in a note, adding that an offer below $ 135 per share would be "challenging" for Monsanto to agree to. The offered price is unlikely to go beyond $ 140 a share, according to Jeffrey Holford, an analyst at Jefferies LLC.
Moody's Investors Service on Tuesday placed Bayer's A3 credit rating under review for a downgrade because of the Monsanto offer. Fitch Ratings also said it may cut the rating by from A to BBB, the lowest investment-grade level.
Clashes, Disputes
Monsanto is the largest seed supplier and a pioneer of genetically modified crops, which in the two decades since their introduction have come to account for the majority of corn and soybeans grown in the U.S. The company has become vulnerable to a takeover as a number of problems piled up this year: Monsanto has cut its earnings forecast, clashed with some of the world's largest commodity-trading companies and become locked in disputes with the governments of Argentina and India.
Bayer, a 152-year-old company, was founded by two friends who made dyes from coal-tar derivatives. Over the following decades, they expanded into other chemicals and pharmaceuticals, introducing heroin as a cough remedy in 1896 and then aspirin, the world's first blockbuster drug, in 1899.
Now the company is seizing the opportunity to expand its crops-science business. Its original all-cash offer, which was publicly disclosed on Monday, represented a 37 percent premium on Monsanto shares from their May 9 level, and valued the equity capital at $ 53 billion.
Bayer Chief Executive Officer Werner Baumann said the company is confident in its $ 122 a share offer, which he called "very attractive," and management is aware of Monsanto's reputation and is speaking with investors about it, according to an interview with the German newspaper Frankfurter Allgemeine Zeitung published Saturday. Baumann said the company wouldn't need to sell assets to finance the acquisition and hasn't decided whether to keep the Monsanto name. The interview signals that while negotiations are progressing, it's not yet a done deal.
Coca-Cola is rolling out the new cans to celebrate its 75-year partnership with the United Service Organizations.
Coca-cola debuts new red, white & blue can
Coca-Cola is rolling out the new cans to celebrate its 75-year partnership with the United Service Organizations.
NEW YORK — Coke has caught the patriotic fever.
The soda company's new "I'm proud to be an American" limited edition red, white and blue cans honor members of the military and feature the American flag in their design.
Coca-Cola is rolling out the new cans to celebrate its 75-year partnership with the United Service Organizations.
The cans and packs will be in stores through July 4th. The song lyric and patriotic design will be on 16-ounce cans as well as 12-ounce cans that come in 20, 24 and 35-packs.
Coca-Cola is the latest company to adopt USA-themed packaging. Anheuser-Busch even changed the name of "Budweiser" to "America" — the name change will last through the presidential election in November.
The cans also promote the joint "Campaign to Connect," which is being sponsored by Coca-Cola and the USO, which was reported earlier by AdAge.
The campaign aims to get Americans to send one million messages of support to members of the armed forces. Messages can be sent online via the campaign's website.
A special celebration of Coke's partnership with the USO begins this weekend at NASCAR's Coca-Cola 600 race.
(CNN) – Coca-Cola has rolled out patriotic themed soda cans to celebrate 75 years in partnership with the USO.
The soda company’s “I’m proud to be an American” cans are red, white and blue and designed to resemble a waving American flag.
The cans honor members of the military and will be stores through Independence Day.
The limited edition cans also promote the joint “Campaign to Connect” co-sponsored by the USO. The group is trying to get 1 million messages of support to members of the Armed Forces.
Messages can be sent online at https://www.uso.org/.
The soda company’s new “I’m proud to be an American” limited edition red, white and blue cans honor members of the military and feature the American flag in their design.
No less than Mr. Trump, the presumptive Republican nominee and a wealthy businessman himself, suggested that executive pay was, in some instances, excessive. "You see these guys making these enormous amounts of money," Mr. Trump said on "Face the Nation" last year. "It's a total and complete joke."
The presidential contenders are responding to a sense of outrage among many working-class men and women.
"In the wealthiest country in the history of the world, it should be a no-brainer that someone who works full time should be able to support their family and send their children to school," Ms. Slavkin Corzo said. "This type of wealth inequality has dangerous ramifications for our economy over all. It's immoral."
That sentiment resonates beyond the picket lines. Even Mr. Johnson, who is paid to advise companies on pay, said things had gotten out of hand. "I wish all C.E.O.s were paid less money," he said. "I think they're paid too much from a moral standpoint, but it is a competitive market."
Creeping Higher
Several factors account for big paydays at the highest reaches of corporate America, among them the ease with which companies can give away stock, and chummy board members who reward their friends.
But another driver of high pay is the practice of benchmarking a chief executive's compensation against that of others in a so-called peer group.
"Companies are accustomed to benchmarking against other companies in their industries," said Andrew Goldstein, leader of the North American executive compensation practice at Willis Towers Watson, a consultancy. "You tend to get these clusters of compensation in these industry groups." And companies are prone to benchmark themselves against larger companies and set pay at the high end of any range.
At First Data, a payments processor with a market value of about $ 11 billion that went public last year, the chief executive, Frank J. Bisignano, was awarded $ 51.6 million in 2015, some of it tied to long-term performance. The board benchmarked his pay against 21 other companies it determined made up First Data's peer group.
But those companies tended to be much larger than First Data, with average market values of about $ 37 billion. The peer group included Visa ($ 188 billion market cap), MasterCard ($ 104 billion market cap) and Accenture ($ 77 billion market cap).
Yet despite First Data's relatively small size, Mr. Bisignano, who joined the company in 2013 after working at JPMorgan Chase, was awarded more than any chief of the companies in his peer group. The closest was Kenneth Chenault of American Express, who made $ 21.7 million, less than half of Mr. Bisignano's package. First Data declined to comment.
"Nobody wants to be in the bottom half," Mr. Daly said. "So over time, the average compensation in any group goes up."
First Data may be an outlier in the payments industry. In other sectors of the economy, however, specifically media and technology, enormous pay packages have become the norm.
In 2014, the four chief executives reporting to the media mogul John Malone were awarded a combined $ 358 million. Last year, those four men — David M. Zaslav, Michael T. Fries, Gregory B. Maffei and Thomas M. Rutledge — were still awarded $ 103.4 million.
Other media and technology chiefs picked up the slack. Sumner M. Redstone has routinely bestowed great riches upon his lieutenants, Mr. Dauman of Viacom, and Leslie Moonves, chief executive of CBS. Last year was no exception.
Mr. Moonves was the second-highest-paid executive on the Equilar list, with a package worth $ 56.4 million. Mr. Dauman was right behind him, with a $ 54.1 million package that included a contract extension. They received this compensation although CBS shares fell 16 percent last year, and Viacom's share performance was dismal.
It's not clear how much longer Mr. Redstone's largess will endure. He is ailing, has publicly split with Mr. Dauman, and the futures of CBS and Viacom are the subject of enormous speculation.
"Every year they get paid more than they should due to that unusual governance situation," said Steven N. Kaplan, a professor of finance at the University of Chicago Booth School of Business, referring to Mr. Moonves and Mr. Dauman. "Those guys may be going down once Sumner is gone."
Should the pay of Mr. Dauman and Mr. Moonves fall in the coming years, plenty of other media chiefs will still reap big rewards. Robert A. Iger of Walt Disney was awarded $ 43.5 million last year, Jeffrey L. Bewkes of Time Warner received $ 31.5 million, James E. Meyer of Sirius XM made $ 29.2 million, and Brian L. Roberts of Comcast took in $ 27.5 million.
Technology company chiefs also did well. Marissa A. Mayer of Yahoo was awarded $ 36 million. Marc Benioff, founder and chief executive of Salesforce, received a $ 33.4 million package. And Mr. Khosrowshahi of Expedia, the lucky high earner of 2015 according to Equilar, had compensation of $ 94.6 million. (Mr. Khosrowshahi is a director of The New York Times Company.) His package, reflecting a new five-and-a-half-year contract, was almost exclusively stock that vests over time, so much of its value is closely linked to Expedia's share price.
PhotoCredit Sam Kalda
Defenders of executive pay cite factors like those as evidence that seemingly astronomical rewards really don't add up to that much money. In a statement, Sarah Gavin, an Expedia spokeswoman, said Mr. Khosrowshahi "has been a transformational C.E.O. for Expedia," adding that much of his compensation was structured to give him "an additional incentive to create long-term shareholder value."
All told, tech and media C.E.O.s made up 17 of the highest-paid 30 spots on Equilar's list last year.
According to Bureau of Labor Statistics data compiled by the A.F.L.-C.I.O., the average worker in the United States who doesn't have management responsibility earns $ 36,875 a year. By that measure, the average chief executive on the Equilar list makes roughly 523 times the average worker salary.
It's not a perfect comparison. Executive pay includes stock grants, often with multiyear payouts and performance targets, while low-paid workers rarely receive stock, let alone long-term incentive packages. Nonetheless, the discrepancy is stark. A bank teller at Wells Fargo making that average wage would have to work more than half a millennium, until 2539, to earn what that company's chief executive, Mr. Stumpf, who made the average among chiefs on the Equilar list, earned last year.
Incomplete as such ratios may be, chief executives will have to get used to them. Starting in 2018, companies will be required to disclose the ratio of their C.E.O.s' pay to the median compensation of their employees. The Securities and Exchange Commission will allow companies significant leeway when interpreting their own data, which could keep ratios down.
In the interim, data from other sources offers a hint of what to expect. PayScale, a company that makes enterprise software, has surveyed more than 80,000 workers about their pay. Using that data, it is possible to roughly approximate ratios of the sort that the S.E.C. will soon require.
The biggest gap between C.E.O. and worker pay was at Expedia, where Mr. Khosrowshahi made 993 times the median pay of his employees, as reported to PayScale. That is not so surprising given Mr. Khosrowshahi's enormous multiyear contract. But it held true even with Expedia's high median salary of $ 95,300.
Perhaps more glaring was the discrepancy between the Walmart chief executive, C. Douglas McMillon, who made $ 19.4 million, nearly the average among the Equilar 200, and his workers, who reported a median salary of just $ 24,600. Mr. McMillon thus made 789 times the income of his median employee, using PayScale and Equilar data.
Walmart said it had raised wages for more than 1.2 million employees in February. Mr. McMillon himself started as an hourly worker at Walmart and the company said that most of his compensation was based on company performance.
Such huge gulfs between worker and executive pay are a recent phenomenon. According to an analysis by the Economic Policy Institute, a research organization that focuses on labor issues, C.E.O.s of the top 350 American companies by sales made just 30 times what average workers in their industries did in 1978. By 1989, chiefs were making 59 times what their average workers made; by 2000, they were making 383 times what the average workers made.
"It's an eye-popping number," said Ms. Slavkin Corzo. "That means the typical worker would have to work for hundreds of years to make what a C.E.O. makes in one year."
Eye-popping as such numbers may be, compensation specialists don't expect the S.E.C.'s ratio rule to change these disparities very much. But Mr. Johnson said it might embarrass retailers like Walmart. "It will throw another log on the fire, but I don't think it will have a huge impact," he said.
Other Ways to Get Paid
Being the chief executive of a big publicly traded company isn't the only way to get paid these days.
Masimo, a small medical device company with a market value of just $ 2.4 billion and annual sales of about $ 630 million, saw fit to award its chief executive, Joe Kiani, $ 119.2 million in cash and stock. Palo Alto Networks, an enterprise technology company with just under $ 1 billion in sales, awarded its chief executive, Mark D. McLaughlin, $ 66.6 million. And Paul J. Taubman, an investment banker who recently took his firm, PJT Partners, public, received a package composed almost entirely of stock worth $ 75.5 million. Because their companies didn't have $ 1 billion in sales, they were not included in the Equilar 200.
A business leader does not even have to be a C.E.O. to make a fortune. Lowly chief financial officers, chief operating officers and division heads are also hauling in staggering pay packages.
When Google reorganized last yearto become Alphabet, it placed Sundar Pichai in charge of its search business. For taking control of the subsidiary, called Google, he was awarded stock and cash worth $ 100.6 million.
Alphabet's chief financial officer, Ruth Porat, who was recruited from Morgan Stanley, was awarded $ 31.1 million. And Patrick Pichette, the company's departing chief financial officer, received a golden parachute worth $ 56.6 million.
Among companies that gave lavish packages to chief executives, other senior executives were also richly rewarded. At Viacom, Thomas E. Dooley, the chief operating officer, was awarded $ 29.4 million. At Comcast, Michael J. Cavanagh, the chief financial officer, received $ 40.6 million.
And at First Data, where Mr. Bisignano received the sixth-highest total compensation among chief executives last year, his deputies fared well, too.
Daniel Charron, executive vice president of global business solutions, was awarded $ 24.8 million, while the total for Guy Chiarello, the company's president, was $ 20.6 million.
"These are very high numbers. Some people think it's too much," Mr. Kaplan said. "But if you look at what people are making in the market — technology and globalization have played into this — these are market rates."
Yet the highest earners in the United States are not employees at public companies encumbered by pesky compensation committees. They are hedge fund managers like Kenneth C. Griffin, who runs Citadel and made $ 1.7 billion last year. James Simons, founder of Renaissance Technologies, also earned $ 1.7 billion in 2015.
Three other hedge fund managers — Ray Dalio of Bridgewater Associates, David Tepper of Appaloosa Management and Israel Englander of Millennium Management — each made more than $ 1 billion. Another three men made $ 500 million or more.
The figures for hedge fund managers, compiled by Institutional Investor's Alpha magazine, take into account the money they have invested in their funds as well as the fees they charge.
Together, the top 25 best-paid hedge fund managers took in a combined $ 13 billion last year.
Concentrated Wealth
On a case-by-case basis, large executive pay packages are easy to understand. Big companies employ thousands of people and generate billions in sales. Competition for top executive talent is intense, especially in today's global marketplace. From that perspective, Mr. Kaplan said: "In this day and age, I don't think they're particularly overpaid."
And chief executive pay declined in 2015, according to the Equilar 200, which included companies with $ 1 billion in revenue, not $ 1 billion in market capitalization, as was the case last year. Cash compensation fell to $ 6 million on average, compared with $ 6.9 million in 2014, while stock and option awards slumped to $ 13.3 million, down from $ 15.7 million in 2014. Some executives with large stock holdings felt a twinge when their company's share price fell.
But it is too soon to call this decline a trend. In 2012, after years of steady increases, average pay dipped 10 percent. What followed were two years of strong gains, until last year. And for all the talk about measures designed to incentivize long-term performance, many chief executives took home enormous cash bonuses, which do little to promote foresight. Mr. Moonves got $ 23.7 million in cash, while Mr. Dauman received $ 18.3 million.
What is more, when executive compensation is compared with worker salaries, today's pay packages seem gargantuan.
Seen in this light, the compensation committees that set C.E.O. pay are orchestrating a large-scale transfer of wealth to a few hundred individuals — most of them men, most of them white.
Previous efforts to rein in executive pay haven't yielded many results. So-called "say on pay measures," which let investors voice their opinions on executive pay, have had little effect. The S.E.C.'s pay ratio rule may make some companies look bad, yet many analysts predict executive pay will continue the trajectory it has followed for decades, climbing ever higher.
"The amount of power that we've allowed to be concentrated in the hands of C.E.O.s is worrisome," Ms. Slavkin Corzo said. "There is nobody out there that has the power to put their thumb on the scale on the other direction. There are lots of ways you can tweak around the edges, but at the end of the day if you want change, it's about changing the power structures in corporate America."
