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right to vote

Larry Fink, CEO of BlackRock, which has nearly $10 trillion in assets, is considered the world’s strongest investor. Her annual letters The leaders of the nation’s largest companies should be given readings that change corporate behavior.

This year, BlackRock launched Engine No. 1 and helped the small, climate-focused hedge fund win two seats on Exxon’s board. This shareholder vote belongs to Fink. promise last year holding companies accountable if they do not have a credible plan to reduce their carbon emissions.

Now BlackRock offers to give up some of its power. Starting next year, some of BlackRock’s largest corporate clients will have the ability to cast their own votes at shareholder meetings instead of voting for shares on their behalf. The move could change responsibility for the $2 trillion of votes held in BlackRock accounts, or about 40 percent of the $5 trillion index fund business.

Allowing investors to vote on their shares gives BlackRock some protection, especially when it comes to what has become his most thorny problem: size. In recent years, BlackRock has been criticized for having too much power at once and not using it to push for more change in the companies it invests in. “This will allow them to say they are putting voting power back into the hands of beneficial asset owners, and also deflect some of the criticism BlackRock has received,” said Douglas Chia, head of Soundboard Governance.

Supporters of greater shareholder engagement welcomed the move. “When the largest asset managers control a sizable portion of the voting at the largest companies, shareholder advocates trying to make changes can often feel like one David versus two Goliaths,” said Matthew Prescott, senior director of the Humane Society. United States of America. “Whatever BlackRock’s motivations, it looks like it would be a good thing to split even some of that power.”

HERE’S WHAT’S GOING ON

The Senate approved a short-term increase in the debt ceiling. The law that would increase the debt limit by $480 billion – expected to be enough for the government to continue borrowing until at least December 3 – passed along the party lines. Parliament will pass the bill next week.

The IMF board will decide the fate of the leader. The tenure of the Fund’s managing director, Kristalina Georgieva, in uncertainty On allegations that while at the World Bank he pressured staff to manipulate a report to appease China. (He denied the allegations.) At its meeting today, the IMF board of directors will decide whether he still trusts him.

Ireland has joined an international tax treaty. The low-tax country, a popular base for multinational corporations, has in the past comprehensive tax revision It focused on imposing a global minimum corporate tax of 15 percent. a deal can be explained today.

Tesla is moving its headquarters to Texas. electric vehicle manufacturer, last big company to move there in recent months. Tesla’s change goes well with a threat Elon Musk posted last year when Tesla was frustrated by curfew orders at his factory in Fremont, California.

Investment advisors are getting increasingly nervous about stocks. Domestic equity funds posted a small loss in the third quarter and strategists are not optimistic about the next quarters. “We’re not on an uptrend at all today,” T. Rowe Price’s David Giroux told The Times.

What to watch for in today’s business report?

This morning, the government will announce how many workers employers added in September. The August figure was a disappointment as rising coronavirus cases forced companies to cut hiring. Economists expect September to be better.

However, given the weakness of August, even if September is strong, the average gain over the last two months is still likely to be lower than in the spring and summer. Here’s what to look for in the report to understand what’s really going on:

Hospitality staff: Restaurants and hotels are the hardest hit by the fluctuations in Covid cases. If hiring in these industries falls short of expectations, it could say more about case numbers than the overall economy.

Professional services: Hiring in industries where people can work remotely is a good indicator of demand. In August, the number of new jobs in professional and business services was a relatively high 74,000. A similar or higher number indicates that economic recovery is still on the way.

Labor: The shortage of workers causes bottlenecks and inflation. The workforce – the number of people who have a job or are actively looking for work – increased by 200,000 in August, which is good but not great. Economists expect a drop in the unemployment rate in September. The best outcome would be a decrease in this rate as fewer people are unemployed. and because more people have officially joined the workforce.

Average working hours: The overall job number is disappointing, but if average working hours rise, it could indicate that economic activity is still strong, increasing faster than companies can hire.

In other labor market news, recruiters return to college campuses in a big way.

“We are currently at a crossroads in cryptocurrency. The same freedom technology could be part of a new technological dystopia.”

— Lane Rettig, entrepreneur and former senior programmer at the Ethereum Foundation in El Salvador Accepting Bitcoin as legal tender last month. The country’s populist president, Nayib Bukele, has introduced the policy, which obliges all sellers to legally accept cryptocurrency, as a way to encourage financial inclusion.

Renren, SoFi and $300 million deal

Last night, Renren, the US-listed Chinese social media company agreed to pay at least $300 million to minority shareholders claiming to be insiders destroyed their most valuable assets at less than fair market value. Between these holdings It was a stock of SoftBank-backed fintech company Social Finance, or SoFi.

Some Renren shareholders filed suit in 2018, and the case involved far-flung participants, disputes over tens of thousands of Mandarin-language documents, new jurisdiction issues, and 19th-century Cayman Islands law. The lawsuit set new precedent for holding foreign companies accountable in U.S. courts, the plaintiffs’ attorney William Reid told DealBook, which first reported the settlement.

Plaintiffs see the settlement as a big win, not just for themselves. “This is an important message,” said Peter Halesworth, founder of Heng Ren Investments, a Boston-based, China-focused asset manager. “US shareholders will struggle with raw deals from bad actors from China on our exchanges.” The defendants did not admit their guilt.

US regulators are watching Chinese companies. The SEC last month warning to investors Chinese companies traded in the US after they said they hoped to list Chinese companies that would be subject to additional disclosures. and Chinese companies may be delisted soon If they are not submitted to supervisory inspections by US regulators.

The questions do not end with this case. Joe Chen, founder of Renren, until recently a SoFi board member. The charges against him in the lawsuit, which is now settled, were brought to the attention of the SEC by California Democrat Representative Brad Sherman after SoFi merged with an SPAC led by tech investor Chamath Palihapitiya in June. “Considering that a publicly traded company that Mr. Chen controls clearly disregards its shareholders.” congressman wrote“It is worrying that the recent SoFi SPAC merger could move forward with Mr. Chen as SoFi board member.”

Renren, SoFi, and SoftBank did not respond to requests for comment.

Weekend reading: Give and take

Many companies support their sustainability goals, especially their plans to achieve net zero carbon emissions. However, Paul Polman, former CEO of Unilever, standard bearer for corporate social responsibility, is not affected. In fact, he argues, having “zero” as the goal reveals a fundamental flaw.

Polman’s new book Together with sustainable business expert Andrew Winston, “Net Positive: How Brave Companies Thrive by Giving More Than They Take” argues that doing business with the goal of making the world better is profitable. Polman spoke with DealBook about how to do this. The interview has been edited and shortened.

What’s wrong with net zero?

Net zero is not enough. Many companies plan to reduce their emissions or rely on future carbon capture technologies to make sure they get back as much as they put in, but offsetting carbon is no longer enough because we collectively – globally – show increased emissions despite commitments to reduce. This means that we have to do more than reach zero.

Can companies make the world better?

We’ve already crossed many of nature’s limits, so it’s not enough just to try to be less evil. Infinite growth on a finite planet is not sustainable. If this continues, we will not be able to do business at all. In the book, we discuss how companies that embrace challenging social and environmental justice issues will be very successful in the future.

How does a company start this path?

You have to think about your purpose. Why are you here? You won’t last long if the world isn’t better off with you, and not attacking problems will cost a lot more in the long run. Companies now have to think about how to drive changes in habits instead of consuming resources and driving more consumption. Making more stuff doesn’t work.

What does it mean to be “net positive”?

Minimizing harms does not mean simply being “green” or less bad and operating only sustainably, i.e. having a neutral impact on the planet. It is net positive, restorative, restorative and regenerative.

SPEED-READING

Opportunities

• A group led by Saudi Arabia’s sovereign investment fund has bought English football club Newcastle United. (NYT)

• Insurance company Chubb will take over rival Cigna’s business in Turkey and Asia in a $5.75 billion deal. (FT)

• Sherrese Clarke Soares of Apollo-backed HarborView Equity Partners is bidding high stakes for music catalogs. (NYT)

Policy

• The Fed will begin to assess the exposure of large banks to potential losses from climate change in stress tests. (NYT)

• A pandemic recovery program for small businesses has paid out $4.5 billion in grants for “unreasonable” claims. (NYT)

• China has fined food delivery giant Meituan $530 million for antitrust violations. (NYT)

• Stephen Labaton, a former executive at Booz Allen Hamilton and a longtime editorial reporter at The Times, is NBCUniversal’s new head of communications. (Deadline)

best of the rest

• A reporter’s journey to get to the bottom of the biggest mystery in the land of crypto. (Bloomberg)

• Marc Benioff may be close to handing over the best job at Salesforce. (Information)

• “The Crown” actress Claire Foy will play Facebook’s Sheryl Sandberg in a new TV series about the social media giant. (Variation)

• Rich Handler, Jefferies chief executive with an “extraordinary online personality,” is Wall Street’s newest billionaire. (Bloomberg)

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