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Tag: Corporate management

  • First Republic up in air as regulators juggle bank’s fate

    First Republic up in air as regulators juggle bank’s fate

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    Regulators continued their search for a solution to First Republic Bank’s woes over the weekend before stock markets were set to open Monday.

    San Francisco-based First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March, as investors and depositors have grown increasingly worried that the bank may not survive as an independent entity for much longer. The bank’s stock closed at $3.51 on Friday, a fraction of the roughly $170 a share it traded for a year ago.

    Gary Cohn, a former Goldman Sachs president who served as President Donald Trump’s top economic adviser, told CBS News’ “Face the Nation” on Sunday that the Federal Deposit Insurance Corporation “would prefer to sell the bank in its entirety than in pieces.”

    “What will most likely happen is the FDIC will seize control and then simultaneously resell the asset to the successful bidder,” Cohn said.

    Cohn said he believed it will be a “much faster process” than what happened with Silicon Valley Bank.

    First Republic reported total assets of $233 billion as of March 31. At the end of last year, the Federal Reserve ranked First Republic 14th in size among U.S. commercial banks.

    Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. Its clients — mostly the rich and powerful — rarely defaulted on their loans. The 72-branch bank has made much of its money making low-cost loans to the rich, which reportedly included Meta Platforms CEO Mark Zuckerberg.

    Flush with deposits from the well-heeled, First Republic saw total assets more than double from $102 billion at the end of 2019’s first quarter, when its full-time workforce was 4,600.

    But the vast majority of First Republic’s deposits, like those in Silicon Valley and Signature Bank, were uninsured — that is, above the $250,000 limit set by the FDIC. And that began to fuel worries about the franchise among analysts and investors. If First Republic were to fail, its depositors would be at risk of not getting all their money back.

    Those fears were crystalized in the bank’s recent quarterly results. The bank said depositors pulled more than $100 billion out of the bank during April’s crisis. San Francisco-based First Republic said that it was only able to stanch the bleeding after a group of large banks stepped in to save it with $30 billion in uninsured deposits.

    Since the crisis, First Republic has been looking for a way to quickly turn itself around. The bank planned to sell off unprofitable assets, including the low interest mortgages that it provided to wealthy clients. It also announced plans to lay off up to a quarter of its workforce, which totaled about 7,200 employees at the end of 2022.

    But investors have remained skeptical. The bank’s executives have taken no questions from investors or analysts since the bank reported its results, causing the stock to sink further.

    And it’s hard to profitably restructure a balance sheet when a firm has to sell off assets quickly and has fewer bankers to find opportunities for the bank to invest in. It took years for banks like Citigroup and Bank of America to return to profitability after the global financial crisis 15 years ago, and those banks had the benefit of a government-aided backstop to keep them going.

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  • First Republic up in air as regulators juggle bank’s fate

    First Republic up in air as regulators juggle bank’s fate

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    Regulators continued their search for a solution to First Republic Bank’s woes over the weekend before stock markets were set to open Monday.

    San Francisco-based First Republic has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March, as investors and depositors have grown increasingly worried that the bank may not survive as an independent entity for much longer. The bank’s stock closed at $3.51 on Friday, a fraction of the roughly $170 a share it traded for a year ago.

    Gary Cohn, a former Goldman Sachs president who served as President Donald Trump’s top economic adviser, told CBS News’ “Face the Nation” on Sunday that the Federal Deposit Insurance Corporation “would prefer to sell the bank in its entirety than in pieces.”

    “What will most likely happen is the FDIC will seize control and then simultaneously resell the asset to the successful bidder,” Cohn said.

    Cohn said he believed it will be a “much faster process” than what happened with Silicon Valley Bank.

    First Republic reported total assets of $233 billion as of March 31. At the end of last year, the Federal Reserve ranked First Republic 14th in size among U.S. commercial banks.

    Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. Its clients — mostly the rich and powerful — rarely defaulted on their loans. The 72-branch bank has made much of its money making low-cost loans to the rich, which reportedly included Meta Platforms CEO Mark Zuckerberg.

    Flush with deposits from the well-heeled, First Republic saw total assets more than double from $102 billion at the end of 2019’s first quarter, when its full-time workforce was 4,600.

    But the vast majority of First Republic’s deposits, like those in Silicon Valley and Signature Bank, were uninsured — that is, above the $250,000 limit set by the FDIC. And that began to fuel worries about the franchise among analysts and investors. If First Republic were to fail, its depositors would be at risk of not getting all their money back.

    Those fears were crystalized in the bank’s recent quarterly results. The bank said depositors pulled more than $100 billion out of the bank during April’s crisis. San Francisco-based First Republic said that it was only able to stanch the bleeding after a group of large banks stepped in to save it with $30 billion in uninsured deposits.

    Since the crisis, First Republic has been looking for a way to quickly turn itself around. The bank planned to sell off unprofitable assets, including the low interest mortgages that it provided to wealthy clients. It also announced plans to lay off up to a quarter of its workforce, which totaled about 7,200 employees at the end of 2022.

    But investors have remained skeptical. The bank’s executives have taken no questions from investors or analysts since the bank reported its results, causing the stock to sink further.

    And it’s hard to profitably restructure a balance sheet when a firm has to sell off assets quickly and has fewer bankers to find opportunities for the bank to invest in. It took years for banks like Citigroup and Bank of America to return to profitability after the global financial crisis 15 years ago, and those banks had the benefit of a government-aided backstop to keep them going.

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  • EPA allows gasoline with higher ethanol blend during summer

    EPA allows gasoline with higher ethanol blend during summer

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    DES MOINES, Iowa — Fuel stations throughout the country will be able to sell gasoline blended with 15% ethanol during the summer under an emergency waiver issued Friday by the Environmental Protection Agency in a move that could reduce prices at the pump and boost demand for the Midwest-based ethanol industry.

    The EPA framed its decision as a way to reduce gasoline prices at a time of market supply uncertainty because of Russia’s invasion of Ukraine. The agency said its action also encourages U.S. energy independence and supports American agriculture and manufacturing.

    “Allowing E15 sales during the summer driving season will not only help increase fuel supply, but support American farmers, strengthen U.S. energy security, and provide relief to drivers across the country,” EPA Administrator Michael Regan said in a statement.

    Most gasoline sold in the U.S. is blended with 10% ethanol and the higher 15% blend hasn’t been allowed in the summer because of concerns it could worsen smog during hot weather.

    The EPA said its analysis shows allowing sales of the higher blend shouldn’t have a significant impact on air quality.

    The agency estimated that E15 blends cost about 25 cents less per gallon at the pump than E10 blends.

    The U.S. Department of Energy has found that vehicles will travel 3% to 4% fewer miles on E10 and 4% to 5% less on E15 than on 100% gasoline.

    The American Fuel & Petrochemical Manufacturers industry group questioned the move, pointing to data from the Energy Information Administration, a part of the Energy Department.

    “The U.S. market is well supplied with gasoline, which EIA data make clear,” Chet Thompson, the organization’s president and CEO, said in a statement. “Therefore, we’re anxious to see how EPA is going to justify this decision in light of the statutory limitations and the agency’s own understanding of emergency criteria, which require a finding of inadequate domestic supply in a specific geographic area.”

    Ethanol policy is especially important in the Midwest, where most of the roughly 200 renewable fuel plants are located. In 2022, those refineries produced over 15.4 billion gallons of ethanol, and the industry used about 45% of the nation’s corn crop, roughly one-third of which was grown in Iowa and Illinois.

    The industry has pushed for years to allow year-round sales of E15. In March, the EPA proposed to permanently allow the higher blends in eight Midwestern states beginning in 2024.

    “EPA’s action allowing summertime E15 will help extend gasoline supplies, prevent fuel shortages, protect air quality and reduce carbon emissions,” said Geoff Cooper, president and CEO of the Renewable Fuels Association.

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  • Silicon Valley company raises $250M for hydrogen technology

    Silicon Valley company raises $250M for hydrogen technology

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    In what could prove a milestone for an industry that hopes to help address climate change, the Silicon Valley company Ohmium announced Wednesday it has raised $250 million to increase production of machines that can make clean hydrogen and displace fossil fuels.

    Some climate experts say burning hydrogen can substitute for burning coal, oil or gas, for example in making steel or cement — without contributing to climate change. That’s been largely theoretical, but real world examples are now growing.

    Just four or five years ago, a company working on clean hydrogen from water would not have been able to raise several hundred million dollars, said Daryl Wilson, executive director of the Hydrogen Council. But now there’s rapid growth and demand for it, and a broader recognition that it’s key to addressing climate change, he said.

    Mark Viehman, a hydrogen and clean fuels expert at the consulting firm Capgemini, called $250 million a “very impressive” fundraise, and said its own recent research found that 64% of energy and utility companies plan to put money into low-carbon hydrogen efforts by 2030.

    Ohmium’s role is to make electrolyzers, the devices that take water and split it into hydrogen and oxygen.

    CEO Arne Ballantine said the company will use the $250 million to scale up its plant in Chikkaballapur, outside Bengaluru, India, continue research at the Fremont, California headquarters to reduce the cost of production, and add to its 400-person workforce.

    Ballantine said he plans to make enough electrolyzers each year to supply 2 gigawatts’ worth of hydrogen — enough for a few steel or fertilizer plants or several refineries.

    Countries and industries are setting ambitious targets to cut carbon dioxide from heavy manufacturing using hydrogen. There are also plans to use it in power generation and transport. The United States, European Union, Canada and India are offering tax credits and production incentives for clean, or green, hydrogen.

    The International Energy Agency said in September that global hydrogen demand reached 94 million tons in 2021. Nearly 200 million tons will be needed by 2030 to get on track for net zero emissions by 2050, it said. There are about two dozen major electrolyzer manufacturers.

    An electrolyzer produces clean hydrogen if it draws electricity from a grid that’s powered by renewable energy, such as wind and solar. Ballantine said Ohmium clients are completely focused on this method. This will be a major change, because less than 1% of hydrogen produced globally now comes from renewable energy, according to the IEA.

    It will take a significant ramp-up in electrolyzer manufacturing and in zero-carbon electricity to meet the demand for low-emissions hydrogen, said Emily Kent, the U.S. director for zero-carbon fuels at the Clean Air Task Force. That’s because it requires massive amounts of electricity to run the electrolyzers.

    Most hydrogen today is made from natural gas, which means greenhouse gases are released to get it out of the ground, and then more can leak as it travels through pipelines. Then to crack the hydrogen from natural gas, companies burn more fossil fuel to make steam, releasing more planet-warming greenhouse gases, unless carbon capture technology is used. This common method does not require an electrolyzer and the hydrogen then goes on to be used mainly in the refining and chemical sectors.

    Some U.S. power plants plan to use Ohmium’s “Lotus” electrolyzer as a partial substitute for natural gas. Ohmium is also collaborating with Spanish energy company Cepsa and renewable energy developer Amp Energy India on green hydrogen projects. It announced an agreement last week to send an electrolyzer to a liquified natural gas import terminal in Andalusia, Spain.

    Each electrolyzer can generate up to 50 tons of hydrogen per year, costs a few hundred thousand dollars and comes in a cabinet 8 feet high by 5 feet wide by 6 feet long, according to Ohmium. They’re interlocking and modular, in case more than one is needed.

    Ballantine said it can be difficult to grasp exactly what hydrogen gas is and how it is useful in lessening climate change. But if he shows someone a piece of steel and says it was made releasing far less greenhouse gases, because we burned hydrogen made from water instead of burning coal to heat it up, then they get it, he said.

    ____

    Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.

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  • East Palestine families living in limbo months after fire

    East Palestine families living in limbo months after fire

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    EAST PALESTINE, Ohio — Jeff Drummond spends days and nights alone in a tiny room with fake wood paneling, two small beds and a microwave atop a mini refrigerator that serves as a nightstand — his pickup truck parked just outside the door at the roadside motel where he’s taken refuge since early February.

    Shelby Walker bounces from hotel to hotel with her five children and four grandchildren while crews tear up railroad tracks and scoop out contaminated soil near their four-bedroom home.

    Almost 3 months after a fiery Norfolk Southern train derailment blackened the skies, sent residents fleeing and thrust East Palestine into a national debate over rail safety, residents say they are still living in limbo. They’re unsure how or whether to move on from the accident and worry what will happen to them and the village where they have deep family roots, friendships and affordable homes.

    “I have no idea how long we can continue to do this,” says Walker, while washing clothes at a laundromat.

    Walker, 48, also works at a small hotel where many workers are staying, so is constantly reminded of the accident. She remembers the scorched rail tanker at her property line and a backyard flooded with water from the burn site. “Sometimes I just break down,” she says.

    About half of East Palestine’s nearly 5,000 residents evacuated when, days after the Feb. 3 derailment, officials decided to burn toxic vinyl chloride from five tanker cars to prevent a catastrophic explosion.

    Most have returned, though many complain about illnesses and worry about soil, water and air quality. Some are staying away until they’re sure it’s safe. Others, like Drummond, are not allowed back in their homes because of the ongoing cleanup.

    The retired truck driver and Gulf War veteran misses mowing the lawn, puttering around his yard and chatting with regulars at the tavern next door.

    “I have nothing here,” says Drummond, sitting on an orange plastic chair outside the Davis Motel in North Lima, Ohio. “So it’s trying to find something to keep yourself busy, to keep from going crazy.”

    FEARING THE UNKNOWN

    Norfolk Southern Railroad is paying for lodging for some families but won’t say how many still are out of their homes while the railroad excavates tens of thousands of tons of contaminated soil, a process the Environmental Protection Agency expects to take another 2-3 months. The railroad also must remove toxic chemicals from two creeks, which could take longer.

    “I pledge that we won’t be finished until we make it right,” Norfolk Southern President and CEO Alan Shaw told an Ohio rail safety committee last week.

    The railroad also handed out $1,000 “inconvenience checks” to residents within the ZIP code that includes East Palestine and surrounding areas, but most did not qualify for further assistance and went home.

    The EPA’s Mark Durno says continual air monitoring at the derailment site and in the community and soil tests in parks, on agricultural land and at other potentially affected areas have not yet detected concerning levels of any contaminants.

    “Nothing jumped off page for us yet,” Durno says, adding that testing would continue just to be sure.

    The railroad says testing shows drinking water is safe, though it’s establishing a fund for long-term drinking water protection. It’s also establishing funds for health care and to help sellers if their property value falls because of the accident.

    But it’s the unknown that worry people.

    Jessica Conard, a 37-year-old speech therapist, wonders whether her boys — ages 3, 8 and 9 — will ever be able to fish in the pond separating their property from the railroad tracks. Or play at the park where the chemicals are being removed from a stream. Can they remain in the town where “generations upon generations” of family have lived?

    “You want them to be able to have those memories,” says Conard, who returned to East Palestine six years ago to raise her family where the sound of trains was the backdrop to her own childhood. “I just kind of feel like those memories are tainted because when you hear a train now it kind of makes you cringe.”

    DEEP ROOTS

    This is the kind of place where everyone seems connected to everyone else, residents say. Parents don’t worry about their kids because they know other parents are looking out for them.

    Summer Magness chokes up recalling how the community held benefit dinners after her eldest daughter, Samantha, suffered multiple cardiac arrests playing softball four years ago, resulting in a brain injury that left her paralyzed and unable to speak. Samantha, now 16, gets all A’s, attends homecoming and still has her circle of friends.

    “We couldn’t have made it without them,” Magness says.

    Eighty-one-year-old Norma Carr raised four children in the cedar-sided 1930s duplex she moved into 57 years ago and where three generations lived together before the derailment. She knew everyone in her neighborhood, walked to church and always felt safe among friends.

    For now, she’s staying in a condominium 10 miles (16 kilometers) away that the railroad rented the family for six months because Carr, who has Parkinson’s, fared poorly during a month in a cramped hotel room.

    “I miss being able to look out the window and not see a stranger,” says Carr, choking back tears.

    Most of Conard’s relatives work in factories and, like many here, live paycheck to paycheck, putting aside money to buy and fix up homes, she says. “I mean, this is what we strive for. It’s the American dream.”

    She and her husband sold their first East Palestine home last year to move into their “forever home” a couple miles away, on a road named for one of her ancestors. “Then all of a sudden, overnight (the dream is) gone.”

    STAY OR GO?

    Small businesses like Sprinklz on Top and The Corner Store line the main drag, North Market Street, along with chains like McDonald’s and Pizza Hut. The Chamber of Commerce, library and post office are there, too. Statues of bulldogs, the high school mascot, are placed throughout town.

    There also are signs reflecting the hardship the village has been through: “Y’all OK?” says one. Others say “Get ready for the greatest comeback in American history.”

    But many wonder if they should stay or go.

    For Summer Magness, it would be difficult to leave the community where her family has lived for generations. She doubts her home could sell for what it would cost to buy elsewhere. Still, she would move if she could, because the feeling of security has been upended and “the safety of my children is my only concern.”

    To stay, Carr’s daughter Kristina Ferguson, 49, says she would want independent testing and a thorough cleaning of their home. But she isn’t sure if the family will ever feel safe there again.

    Ferguson also worries whether living there could affect her mother’s Parkinson’s.

    “There’s … no home in the world that is worth losing one family member over,” she says. “I know as long as we’re together we will have a home in our heart.”

    ___

    Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.

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  • NBCUniversal CEO Shell departs over ‘inappropriate conduct’

    NBCUniversal CEO Shell departs over ‘inappropriate conduct’

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    NEW YORK — Jeff Shell, the chief executive of NBCUniversal and one of the media industry’s renowned executives, is departing the company after an investigation into inappropriate conduct, parent company Comcast announced Sunday.

    In a brief statement, Shell said Sunday would be his last day after what he called “an inappropriate relationship with a woman in the company.”

    “I’m truly sorry I let my Comcast and NBCUniversal colleagues down, they are the most talented people in the business and the opportunity to work with them the last 19 years has been a privilege,” said Shell, who has been CEO of NBCUniversal since January 2020.

    He joins a number of media industry executives who have left their posts in recent years over inappropriate relations, including others at NBCUniversal. Three years ago, NBCUniversal Vice Chairman Ron Meyer, a Hollywood power player, left the company after revealing he received threats of extortion following a settlement with a woman with whom he had an affair.

    And last year, Jeff Zucker abruptly resigned as president of CNN while acknowledging a consensual relationship with another network executive — an entanglement that surfaced during a probe of now-fired anchor Chris Cuomo.

    Former CBS Chief Les Moonves resigned in September 2018, just hours after reports of multiple allegations of sexual misconduct against him.

    As CEO of NBCUniversal, Shell oversaw the company’s portfolio of news and entertainment television networks, a premiere motion picture company, significant television and sports production operations and a leading television stations group, according to the company website. He also oversaw the company’s theme parks and a premium ad-supported streaming service.

    Previously, Shell was chairman of NBCUniversal Film and Entertainment. In that role, he oversaw the content creation, as well as the programming and distribution engines behind NBCUniversal’s film and network television businesses, including NBC Entertainment, Universal Filmed Entertainment Group (UFEG), Telemundo and NBCUniversal International.

    Comcast did not say who will succeed Shell.

    The company is slated to report its first-quarter earnings results on Thursday.

    ___

    This story has been corrected to show that Shell was not ousted from NBCUniversal, but is leaving as part of a mutual agreement with the company.

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  • Bud Light exec takes leave after boycott calls, reports say

    Bud Light exec takes leave after boycott calls, reports say

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    Reports say a Bud Light marketing executive is taking a leave of absence after overseeing a partnership between the company and a transgender influencer, drawing cries for boycotts

    NEW YORK — The marketing executive who oversaw a partnership between Bud Light and a transgender influencer is taking a leave of absence after it snowballed into cries for boycotts from some angry customers, according to media reports.

    Alissa Heinerscheid, Bud Light’s vice president of marketing, will be replaced by Todd Allen, most recently global vice president of Budweiser, according to reports from Beer Business Daily and Ad Age.

    A spokesperson for Bud Light’s parent company, Anheuser-Busch InBev, on Saturday did not directly confirm the leave of absence but said Allen as vice president of Bud Light will report directly to Benoit Garbe, U.S. chief marketing officer. The company also made streamlining changes so that its most senior marketers are more closely connected to all of its brand activities.

    The partnership between the blue-emblazoned beer brand and Dylan Mulvaney, who has more than 10.8 million followers on social media, hit the internet on April 1. That’s when Mulvaney posted a video on Instagram showing herself cracking open a can of Bud Light, one with the hashtag #budlightpartner.

    Companies have broadened efforts to attract customers and employees across racial, cultural and other lines as the country continues to diversify. In many cases, their own shareholders have pushed them to become more inclusive in hopes of improved returns.

    Earlier this month, Bud Light said, “Anheuser-Busch works with hundreds of influencers across our brands as one of many ways to authentically connect with audiences across various demographics.”

    But the Bud Light-Mulvaney partnership quickly brought an onslaught of criticism from people who said they’re angry about the world going “woke.” Musician Kid Rock posted a video of himself shooting cans of Bud Light with a rifle.

    Anheuser-Busch InBev’s stock that trades in the United States is down 1.8% since Mulvaney’s April 1 video showing herself taking a sip of Bud Light. But the stock is still up 9.1% for the year so far, more than the broad U.S. stock market, as measured by the S&P 500.

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  • Bud Light exec takes leave after boycott calls, reports say

    Bud Light exec takes leave after boycott calls, reports say

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    Reports say a Bud Light marketing executive is taking a leave of absence after overseeing a partnership between the company and a transgender influencer, drawing cries for boycotts

    NEW YORK — The marketing executive who oversaw a partnership between Bud Light and a transgender influencer is taking a leave of absence after it snowballed into cries for boycotts from some angry customers, according to media reports.

    Alissa Heinerscheid, Bud Light’s vice president of marketing, will be replaced by Todd Allen, most recently global vice president of Budweiser, according to reports from Beer Business Daily and Ad Age.

    A spokesperson for Bud Light’s parent company, Anheuser-Busch InBev, on Saturday did not directly confirm the leave of absence but said Allen as vice president of Bud Light will report directly to Benoit Garbe, U.S. chief marketing officer. The company also made streamlining changes so that its most senior marketers are more closely connected to all of its brand activities.

    The partnership between the blue-emblazoned beer brand and Dylan Mulvaney, who has more than 10.8 million followers on social media, hit the internet on April 1. That’s when Mulvaney posted a video on Instagram showing herself cracking open a can of Bud Light, one with the hashtag #budlightpartner.

    Companies have broadened efforts to attract customers and employees across racial, cultural and other lines as the country continues to diversify. In many cases, their own shareholders have pushed them to become more inclusive in hopes of improved returns.

    Earlier this month, Bud Light said, “Anheuser-Busch works with hundreds of influencers across our brands as one of many ways to authentically connect with audiences across various demographics.”

    But the Bud Light-Mulvaney partnership quickly brought an onslaught of criticism from people who said they’re angry about the world going “woke.” Musician Kid Rock posted a video of himself shooting cans of Bud Light with a rifle.

    Anheuser-Busch InBev’s stock that trades in the United States is down 1.8% since Mulvaney’s April 1 video showing herself taking a sip of Bud Light. But the stock is still up 9.1% for the year so far, more than the broad U.S. stock market, as measured by the S&P 500.

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  • Mexico finally sells unwanted presidential jet to Tajikistan

    Mexico finally sells unwanted presidential jet to Tajikistan

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    After almost 4 1/2 years of trying, Mexico’s president says he has finally sold the unwanted presidential jet — to the former Soviet republic of Tajikistan

    MEXICO CITY — After almost 4 1/2 years of trying, Mexico’s president said Thursday he has finally sold the unwanted presidential jet — to the former Soviet republic of Tajikistan.

    President Andrés Manuel López Obrador said the government of Tajikistan paid the equivalent of about $92 million for the Boeing 787 jet.

    López Obrador refused to use the jet after taking office on Dec. 1, 2018, saying it was too luxurious. The austerity-loving president usually takes commercial flights.

    López Obrador had tried to lure corporations and business executives to buy the jet, but found no takers. He even symbolically “raffled off” the plane, which would be expensive to convert back into a normal airliner.

    The plane was purchased for $200 million and was used by the previous president, Enrique Peña Nieto.

    It has been difficult to sell because it is configured to carry only 80 people and has a full presidential suite with a private bath. Experts said it would be costly to reconfigure into a typical passenger jet that would carry up to 300 passengers.

    Though the plane has relatively few miles on it, Mexico was eager to unload it because maintence costs make it expensive to keep parked. There had been talk the Boeing 787 might be turned over to an army-run company for use as a commercial jet.

    “After a long time, we managed to sell the plane,” López Obrador said in a video clip from inside the plane, which he had previously refused to board. “We are happy.”

    “We are going to use the money from selling the plane to build two hospitals,” he said.

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  • New to volunteering? A How-To-Guide to find the right fit

    New to volunteering? A How-To-Guide to find the right fit

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    Over the last 20 years, fewer and fewer people in the U.S. have donated their time through volunteering with nonprofits.

    While it’s not the only way to give back to your community, volunteering through nonprofit organizations is a powerful way to make a difference. Nonprofits support many of our society’s most vulnerable people. They nurture art, expression and sports. They can conduct scientific research and care for our natural spaces. The possibilities are many, though it may take some looking.

    Tim Delaney, president and CEO of the National Council of Nonprofits, calls nonprofits the “invisible sector,” one that is both everywhere and often never seen.

    Here are some things to expect as you look for a volunteer opportunity that is a good fit for you and some steps you can take to succeed:

    KNOW YOURSELF

    The first step in finding an organization to support with your time is to assess your goals, your skills and your passions. Are you seeking to find new friends, learn something new or make a change in a specific area?

    “The first thing an individual needs to do is for their own fulfillment, as well as their ability to help the nonprofit meet its mission, is to understand what that individual’s passion points are,” said Delaney.

    He urged people to think broadly about their skills and interests.

    “A lot of people imagine over the years stuffing envelopes,” Delaney said. “Well, sometimes, that happens. But that’s not what most volunteers are doing.”

    DEFINE YOUR AVAILABILITY

    The second step is to consider when you’re available and for how much time.

    Many nonprofits are facing a confluence of challenges, including diminishing budgets, inflation, high fuel costs and a workforce shortage. Some will have volunteer opportunities only during working hours because that’s what their staff can handle. Others may be more fluid but have a mountain of work to assign.

    Be clear with yourself and the organization about how much time you can commit and what you want to be doing in that time.

    “An organization that has a one size fits all model, it’s probably not going to be best,” said Karmit Bulman who leads that Minnesota Alliance for Volunteer Advancement. “You want an organization that’s going to utilize you, your skills, your talents well.”

    HOW TO FIND OPPORTUNITIES

    The act and process of searching for volunteers is one of the biggest barriers for people to get started, said Rian Satterwhite, director of the Office of Service Learning and Leadership at University of Nevada, Las Vegas.

    Often, a large organization like the local United Way will have information about potential volunteer spots. Organizations like VolunteerMatch and state-run volunteer centers may also run online dashboards that aggregate opportunities.

    But many local nonprofits are run entirely by volunteers and may not have the bandwidth to post new volunteer shifts on different websites. So read their websites or social media posts and then reach out directly to ask if your skills and availability are a good fit. Follow up if needed and be patient.

    The process of searching is part of the journey of deepening your connection with your community.

    When you do find an opportunity that interests you, sign up and make a plan for how it will fit into your schedule. Consider telling a friend or family member as a way to hold yourself accountable for actually going.

    “It takes a bit of a leap of faith to kind of show up for that first time in an unfamiliar space,” Satterwhite said. “I think that nine times out of ten people are going to have a really good experience and choose to come back.”

    EXPECT A PROCESS, BUT LOOK FOR EFFICIENCY

    If the nonprofit serves a vulnerable population, including children, survivors of violence or those with serious health issues, they will likely ask volunteers to complete a background check. Other organizations will require training and may send you material to read in advance.

    This due diligence is meant to protect their clients but can become an impediment to volunteer recruitment, which is one reason why Bulman encourages nonprofits to consider carefully how they recruit and train volunteers.

    “If you set up systems like a long application process, a very intensive orientation, a lot of interviews, an intense background check, you aren’t going to get as wide a range of volunteers as if you make the process as simple and efficient as possible,” she said.

    Consider if the nonprofit has made volunteer recruitment a priority by hiring or appointing a volunteer manager, developing inclusive policies and having formalized ways to engage the community they serve as partners.

    Organizations that are successful in recruiting and retaining volunteers have looked to bring in people who are among the communities they serve, Bulman said.

    “If we continue to nurture systems where there’s a structure of the ‘haves’ volunteer for the ‘have nots,’ we’re going to continue to have volunteer shortages,” she said.

    KEEP AN OPEN MIND

    Even though we’ve been talking about “finding” a volunteer opportunity, nonprofit professionals say the best way to recruit new volunteers is through current volunteers. So, if a friend or family member invites you to participate, go! Or better yet, ask around to see if someone you know is already involved with an organization that they would recommend.

    And if you’re hoping to connect a loved one with a volunteer opportunity, use the power of that invitation to your advantage: Sign yourself and your loved one up to go together.

    The big takeaway is that identifying and connecting with volunteering opportunities will put you in contact with the people around you and that is one major benefits of nonprofits that Delaney and others point to.

    @apnews Over the last 20 years, fewer and fewer people in the U.S. have donated their time through volunteering with nonprofits. Here is a guide to how you can start volunteering in your community. #volunteering #nonprofit ♬ original sound – The Associated Press

    “Nonprofits are really where Americans learn about democracy, in that people come together in their local communities to help in some way, and they learn about community issues beyond whatever brought them together to work on that particular nonprofits mission,” he said. “They get on a committee. They get on a board. They learn about conflict resolution. They learn about compromise. They learn about all these skill sets that we need in democracy.”

    Besides all that, Delaney said, it can be fun.

    “You will find so much fulfillment by sharing your grace and your skills and your knowledge with others in your community to make it stronger,” he said. “We’re all in this life together. And you have certain abilities that nobody else has. And we need you.”

    ___

    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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  • Twitter removes policy against deadnaming transgender people

    Twitter removes policy against deadnaming transgender people

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    Twitter has quietly removed a policy against the “targeted misgendering or deadnaming of transgender individuals.”

    ByBARBARA ORTUTAY AP Technology Writer

    SAN FRANCISCO — Twitter has quietly removed a policy against the “targeted misgendering or deadnaming of transgender individuals,” raising concerns that the Elon Musk-owned platform is becoming less safe for marginalized groups.

    Twitter enacted the policy against deadnaming, or using a transgender person’s name before they transitioned, as well as purposefully using the wrong gender for someone as a form of harassment, in 2018.

    On Monday, Twitter also said it will only put warning labels on some tweets that are “potentially” in violation of its rules against hateful conduct. Previously, the tweets were removed.

    It was in this policy update that Twitter appears to have deleted the line against deadnaming from its rules.

    “Twitter’s decision to covertly roll back its longtime policy is the latest example of just how unsafe the company is for users and advertisers alike,” said Sarah Kate Ellis, the president and CEO of the advocacy group GLAAD. “This decision to roll back LGBTQ safety pulls Twitter even more out of step with TikTok, Pinterest, and Meta, which all maintain similar policies to protect their transgender users at a time when anti-transgender rhetoric online is leading to real world discrimination and violence.”

    Twitter did immediately respond to a message for comment Tuesday.

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  • J-Hope becomes 2nd BTS member to join South Korean army

    J-Hope becomes 2nd BTS member to join South Korean army

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    SEOUL, South Korea — J-Hope, a member of K-pop sensation BTS, entered a South Korean boot camp Tuesday to start his 18-month compulsory military service, becoming the group’s second member to join the country’s army.

    There was heated public debate in 2022 over whether to offer special exemptions of mandatory military service for BTS members, until the group’s management agency announced in October that all seven members would fulfill their duties.

    In December, Jin, 30 and the oldest member of BTS, became the band’s first member to enter the army after revoking his request to delay his conscription.

    South Korean TV footage Tuesday afternoon showed what they called a black minivan likely carrying J-Hope moving into the boot camp in Wonju, about 90 kilometers (55 miles) east of Seoul. Hybe Corp., the parent company of BTS’ management agency Big Hit Music, later confirmed the 29-year-old singer entered the camp.

    Dozens of fans showed up near the base after arriving via rented buses wrapped with large photos of J-Hope and words hoping for his safe service. Authorities mobilized soldiers and police officers to maintain order, and there were no immediate reports of safety-related accidents. Big Hit Music had pleaded with fans, who call themselves the “Army,” not to come to the site due to safety reasons.

    “I love you, Army. I’ll see you again,” J-Hope, whose real name is Jung Ho-seok, said Monday in a message posted on the online fan platform Weverse, with photos of himself with a military buzz cut.

    Five other younger BTS members — RM, Suga, Jimin, V and Jungkook — are to join the South Korean military one by one in the coming years. That means the world’s biggest boy band is expected to reconvene as a group again a few years later.

    In South Korea, all able-bodied men are required by law to perform 18-21 months of military service under a conscription system meant to deter aggression from rival North Korea.

    The law gives special exemptions to athletes, classical and traditional musicians, and ballet and other dancers if they have obtained top prizes in certain competitions and are assessed to have enhanced national prestige. K-pop stars and other entertainers aren’t subject to such privileges.

    That has caused an intense domestic debate over whether it was time to amend the law to expand exemptions to entertainers like BTS members. Jin, who turned 30 in December, had faced an impending conscription because the law disallows most South Korean men from further delaying their services after they turn 30.

    Lawmakers bickered over the issue at the National Assembly, while a series of public surveys showed sharply split opinions over possible service exemptions for BTS members. Defense Minister Lee Jong-Sup said at the time that it would be “desirable” for BTS members to implement their duties to promote fairness in the country’s military service.

    Exemptions or dodging of military duties are a highly sensitive issue in South Korea, because the draft forces young men to suspend their studies or professional careers.

    Formed in 2013, BTS expanded its popularity in the West with its 2020 megahit “Dynamite,” the band’s first all-English song that made BTS the first K-pop act to top Billboard’s Hot 100.

    Hybe Corp. said in October that each member of the band for the time being would focus on individual activities scheduled around their military service plans.

    ___

    Associated Press writer Kim Tong-hyung contributed to this report.

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  • Buffett says people shouldn’t worry about Berkshire, banks

    Buffett says people shouldn’t worry about Berkshire, banks

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    OMAHA, Neb. — Billionaire Warren Buffett assured investors Wednesday that Berkshire Hathaway will be fine when he’s no longer around to lead the conglomerate.

    Buffett said shareholders shouldn’t worry about the future of the company after Vice Chairman Greg Abel takes over because he will do a great job and Berkshire will still follow the same model of allowing its subsidiaries to largely run themselves while looking for other companies to buy with the substantial cash reserves it keeps on hand at all times.

    “The problem for our board of directors is the day I’m not around and Greg’s running it, I am not giving him some envelope that tells him what to do next,” Buffett said. But Abel and Berkshire will still be ready to say within minutes whether they are interested in an acquisition and have the resources to do it.

    Buffett said Berkshire is “so damn lucky” to have Abel ready to take over as CEO because there aren’t many executives like him out there. The 92-year-old has no plans to retire, but Abel has been designated as the successor for several years ever since Buffett’s partner Charlie Munger let it slip at the 2021 annual meeting. Abel already oversees all of Berkshire’s non-insurance businesses.

    Buffett and Abel appeared together Wednesday on CNBC from Tokyo where they went this week to check up on several companies Berkshire invested in there in 2020 and promote the conglomerate Buffett leads.

    Wednesday’s appearance is the first extended television interview Buffett has done since before the pandemic. Buffett used to regularly appear on the cable network to answer questions for three hours at a time several times a year. Buffett and Abel fielded a variety of questions Wednesday, including the recent bank failures and whether railroads, including Berkshire’s BNSF railroad, need to continue improving safety in the wake of several recent high-profile derailments.

    Buffett said more banks will fail over time, but most people shouldn’t worry about it because their money is protected by the Federal Deposit Insurance Corp.

    “We’re not over bank failures, but depositors haven’t had a crisis,” Buffett said. “Banks go bust, but depositors aren’t going to be hurt.”

    There has been an intense focus on improving railroad safety in the wake of the fiery Feb. 3 Norfolk Southern derailment outside East Palestine, Ohio, that prompted evacuations and lingering health concerns after hazardous chemicals were released.

    Buffett and Abel said it’s impossible to ensure there will be no derailments because of everything that’s involved in running a railroad, but the industry is generally getting safer over time, and it will get better now.

    “There’s no question there’s lessons to be learned for the industry as a whole and there’s room for improvement,” Abel said.

    Berkshire owns dozens of businesses besides BNSF, including Geico insurance, a number of large utilities an assortment of manufacturing and retail businesses. It also holds more than $300 billion of investments, including major stakes in Apple and Coca-Cola.

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  • Mississippi grain company’s ex-CEO indicted on fraud charges

    Mississippi grain company’s ex-CEO indicted on fraud charges

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    GREENVILLE, Miss. — The former leader of a Mississippi grain storage and processing company has been indicted on federal and state charges, more than a year after the company filed for bankruptcy, prosecutors said Tuesday.

    John R. Coleman, 46, of Greenwood, Mississippi, is the former CEO of Express Grain Terminals, LLC.

    A federal grand jury indicted Coleman on charges of defrauding farmers, banks and the Mississippi Department of Agriculture, U.S. Attorney Clay Joyner and Mississippi Attorney General Lynn Fitch said in a news release.

    Coleman made his initial appearance Tuesday before U.S. Magistrate Judge Jane M. Virden in Greenville. Federal court records did not list an attorney for him.

    Federal court documents say that from June 2018 to October 2022, Coleman altered Express Grain’s audited financial statements to receive a state warehouse license and lied about the amount of debt he owed on corn, wheat, soybeans or other crops held at the facility.

    The federal indictment said farmers delivered grain to Express Grain throughout the 2021 harvest season but did not receive payment.

    The indictment said that Express Grain sent an email to customers on Sept. 28, 2021, with wording approved by Coleman. The message said the company was in good financial shape.

    “We have funding from multiple sources to make sure everyone gets paid on time,” the company email said. “Stay safe out there and keep those combines rolling!”

    The next day, Express Grain eventually filed for Chapter 11 bankruptcy.

    “Coleman’s fraud caused widespread financial hardship and suffering throughout the Mississippi Delta and elsewhere,” the federal indictment said.

    In September 2021, Express Grain had $70 million in outstanding loans from UMB Bank in Kansas City, Missouri.

    If convicted on the federal charges, Coleman would face up to 180 years in prison.

    Fitch also said a Leflore County grand jury has indicted Coleman on five counts of making false representations to defraud government and one count of false pretenses.

    The FBI, the Mississippi Attorney General’s Office, the U.S. Department of Agriculture Office of Inspector General and the Internal Revenue Service are investigating the case.

    Law enforcement agents raided the Express Grain offices and Coleman’s home in February, days before the company’s properties were sold at auction, the Greenwood Commonwealth reported. A legal battle over Express Grain’s proceeds was settled earlier this year. Farmers who chose to participate in the settlement were able to claim a share of $9 million.

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  • Los Angeles City Council votes to ban oil and gas drilling

    Los Angeles City Council votes to ban oil and gas drilling

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    __

    The Los Angeles City Council voted unanimously on Friday to ban drilling of new oil and gas wells and phase out existing ones over the next 20 years.

    The vote comes after more than a decade of complaints from city residents that pollution drifting from wells was affecting their health.

    “Hundreds of thousands of Angelenos have had to raise their kids, go to work, prepare their meals (and) go to neighborhood parks in the shadows of oil and gas production,” said Los Angeles City Council president Paul Krekorian, one of the councilmembers who introduced this measure. “The time has come …. when we end oil and gas production in the city of Los Angeles.”

    Two engineers with Yorke Engineering, a California-based company that does air quality and environmental compliance review, spoke in opposition to the ordinance. They said a ban and phase out will have a negative effect because oil and gas operators will abandon wells. They said this is being underestimated by the city. If they walk away, that will mean increased air pollution and greenhouse gas emissions, they said.

    But Los Angeles City Attorney Mike Feuer said these claims are “not credible,” citing a review by Impact Sciences, another California-based firm that performed an environmental analysis of the ordinance for the city.

    Los Angeles was once a booming oil town. Many of its oilfields are now played out but it still has several productive ones.

    According to the city controller’s office there were 780 active and 287 idle wells within city boundaries in 2018. An idle well is one that is not operating, but neither has it been permanently sealed, so it could be brought back into production.

    Near Long Beach there’s the very prolific Wilmington oil field, which yielded more than 10 million barrels of crude oil in 2019, according to state records.

    Hundreds of the still active wells in that field are concentrated in Wilmington, a predominantly Latino part of Los Angeles. Several clusters of the active wells, located near homes, ballfields and childcare facilities, are operated by companies like E&B Natural Resources Management Corporation and Warren Resources.

    Warren Resources CEO and president James A. Watt said in a statement to The Associated Press that the company has invested $400 million in its oil and gas operations. “We intend to use all available legal resources to protect our major investment from this unlawful taking,” he said.

    Many more wells lie just outside Los Angeles city limits, in Carson, Inglewood and Long Beach.

    Some studies look at the possible effects of pollution emanating from the city’s existing oil and gas wells.

    Researchers from the University of Southern California in a study in 2021 found that people living near wells in two Los Angeles neighborhoods — University Park and Jefferson Park — reported significantly higher rates of wheezing, eye and nose irritation, sore throat and dizziness than neighbors living farther away. Both of those communities are predominantly non-white with large Black and Latino communities, according to the U.S. Census.

    The push to ban drilling in the City of Los Angeles is part of a region-wide effort to shut down oil and gas extraction throughout the county of Los Angeles, with similar measures covering Culver City and unincorporated parts of Los Angeles County passed in 2021.

    “In Los Angeles, we sit on the largest urban oil deposit in the world,” said councilmember Marqueece Harris-Dawson ahead of the vote. “So if Los Angeles can do it, cities around the world can do it.”

    ———

    This story has been edited to correct the amount Warren Resources CEO and president James A. Watt said his company has invested in its oil and gas operations. It is $400 million, not $44 million.

    ———

    Follow Drew Costley on Twitter: @drewcostley.

    ———

    The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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  • Shutterfly CEO sees ‘choppy’ times through her economic lens

    Shutterfly CEO sees ‘choppy’ times through her economic lens

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    SAN FRANCISCO — While other technology companies lay off workers and try to cut other costs amid a post-pandemic comedown, Shutterfly CEO Hilary Schneider is gearing up for a busy holiday season. Orders are pouring in for the digital photo and printing company’s photo books, which capture moments from all the postponed vacations, weddings and other diversions people could finally enjoy this year.

    Schneider, who became Shutterfly’s CEO in 2020 shortly after Apollo Global Management took the company private in a $2.7 billion deal, also sympathizes with the belt-tightening at other technology companies. Her past experience includes being CEO of Red Herring, a technology magazine that collapsed during the dot-com bust 20 years ago, and working as a top executive at Yahoo during the Great Recession of 2008 and 2009. She recently shared her perspective with The Associated Press.

    Q: How do you view the current state of the economy?

    A: We’re certainly going through an economic reconciliation here. It’s hard to remember what that’s like because we have been in a bull market for so long. But those of us with some gray hair have seen this before. I think the reality is it’s a choppy environment. While we are not in a recession yet, there are certainly things that are impacting everyone already. You have the war in Ukraine, you have inflation, you have supply chain issues, and higher labor costs with nearly full employment.

    So that puts everyone in a cautious mode because of the lack of predictability about not only the next day or the next week, but what the next month is going to be. When my boys were young, I remember in soccer they would line them up and teach them to get into a crouch so you could react to the ball. I feel like that’s what all these businesses are doing right now,

    Q: We have seen thousands upon thousands of layoffs at major tech companies in recent weeks. Do you think this will be a prime opportunity for smaller tech firms to add talent?

    A: I was recently at a good friend’s 60th birthday party that had an interesting group there and everyone was talking about cutbacks. What I heard from the venture investors who were there is that they are in a more conservative mode just because they are trying to preserve cash for their existing portfolio (of funded companies). So you just look at number of new companies being funded, I think that number will go down. And that means there will be less of a call for new talent. Everybody is a little more risk averse in this current environment.

    Q: Do you expect the tougher economy to yield any new growth opportunities?

    A: The smarter companies — and I know we certainly are thinking about it this way — will remember the adage about not letting any downturn go by without taking advantage of it. Ultimately, I think some of the smarter companies are thinking, “OK, this is a harder economic environment but what are the jujitsu moves you can make right now?” So you are a company with more resources and more brand recognition than smaller competitors, you are going to be trying to make moves that allow you to come out of this downturn in a situation where you have actually gained market share.

    Q: Is it strange to see a company like Yahoo where you once worked go from a technology powerhouse to an afterthought?

    A: The interesting thing about something like Yahoo is there is still significant residual value in brands like that. I don’t know the specifics, but I think if you look at AOL, which was sort of the original internet, there is still a significant number of people with AOL email. There are habits that get formed and alliances that continue. There are companies that continue reinventing themselves, but unfortunately you also see technology companies that hit a peak and then didn’t catch that next wave.

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  • Disney taps ex-CEO Bob Iger to return, set strategy

    Disney taps ex-CEO Bob Iger to return, set strategy

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    BURBANK, Calif. — The Walt Disney Company has tapped its former CEO Bob Iger to return to head the company for two years, firing his successor Bob Chapek in a move that stunned the entertainment industry.

    Chapek is leaving after the company posted lower than expected earnings in the last quarter. Hollywood’s creative community had grumbled about Chapek’s cost-cutting measures and sometimes blunt approach to talent, while theme park regulars had been unhappy with price hikes.

    So, it’s back to Iger.

    “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period,” Susan Arnold, Disney’s chairman, said in a statement.

    Arnold thanked Chapek for leading the company through the pandemic, while enthusing over Iger’s stature within the company, which he led for 15 years before his ouster in early 2020.

    Iger has the “deep respect of Disney’s senior leadership team,” she said. She added that he was “greatly admired by Disney employees worldwide.”

    “The company’s robust pipeline of content is a testament to his leadership and vision,” the company’s statement said.

    Iger said in the statement that he was “thrilled” to return and “extremely optimistic” about Disney’s future.

    “I am deeply honored to be asked to again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through unrivaled, bold storytelling,” said Iger, who is 71.

    He replaced Michael Eisner as CEO in 2005 and the former TV weather man won over Wall Street and Hollywood with bold acquisitions and public displays of respect for the creative community and the company’s storied history.

    During his 15 years at the helm, Disney absorbed Pixar, Lucasfilm, Marvel and Fox’s entertainment businesses, then launched its Disney+ streaming service.

    After Chapek became CEO in 2020, Iger remained as chairman through 2021.

    Chapek is stepping down in what has been a tough year for Disney. He faced blowback earlier this year for not using the company’s vast influence in Florida to help quash a Republican bill that would prevent teachers from instructing early grades on LGBTQ issues. The bill sparked a spat between Disney and Republican Gov. Ron DeSantis.

    He also was criticized for his handling of Scarlett Johansson’s lawsuit last year over her pay for “Black Widow,” an unusually public conflict between the studio and a top Hollywood star. The 2021 Marvel film was released simultaneously in theaters and through Disney+ for a $30 rental.

    There are reports of plans for major layoffs as the company maneuvers to improve its profitability.

    Currently, Disney+ now is ad-free, but in December it will launch a new tiered service in December for U.S. subscribers. The basic Disney+ service that costs $7.99 per month will run ads. A subscriber who wants no ads will have to upgrade to a premium service that starts at $10.99 per month, a 38% increase over current prices.

    Disney said it ended its fiscal year with more than 235 million subscribers to its streaming services. That was above analysts’ expectations of 231.5 million.

    Disney’s share price is at about the level it was at when Iger stepped down as CEO in early 2020, closing at $91.80 pm Friday. That’s about half its peak of just over $200 a share in March 2021.

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  • Disney announces ex-CEO Bob Iger to return for 2 years

    Disney announces ex-CEO Bob Iger to return for 2 years

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    BURBANK, Calif. — The Walt Disney Company announced late Sunday that former CEO Bob Iger would return to head the company for two years in a move that surprised the entertainment industry.

    Disney said Bob Chapek, who succeeded Iger in 2020, had stepped down from the position.

    “The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period,” board Chair Susan Arnold said in a statement from Disney.

    Arnold thanked Chapek for his service, including his time during “the unprecedented challenges of the pandemic.”

    Iger steered Disney through its absorption of Lucasfilm, Pixar, Marvel and Fox’s entertainment businesses and the launch of Disney Plus.

    Earlier this month, Disney posted lower than expected results for its fiscal fourth quarter.

    Iger led Disney for 15 years before stepping down in 2020.

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  • New CEO of FTX blasts its handling of financial information

    New CEO of FTX blasts its handling of financial information

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    The new CEO of the collapsed cryptocurrency trading firm FTX, who oversaw Enron’s bankruptcy, said he has never seen such a “complete failure” of corporate control.

    John Ray III, in a filing with the U.S. bankruptcy court for the district of Delaware, said there was a “complete absence of trustworthy financial information.”

    “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray said. “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

    Ray noted that many of the companies in the FTX Group, particularly those in Antigua and the Bahamas, didn’t have appropriate corporate governance and many had never held a board meetings. The group also had cash management procedural failures, including the absence of an accurate list of bank accounts and account signatories. There was also insufficient attention paid to the creditworthiness of banking partners.

    Ray also addressed the use of corporate funds to pay for homes and other items for employees.

    “In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors. I understand that there does not appear to be documentation for certain of these transactions as loans, and that certain real estate was recorded in the personal name of these employees and advisors on the records of the Bahamas,” he said.

    So far, debtors have found and secured “only a fraction” of the group’s digital assets that they hope to recover, with about $740 million of cryptocurrency secured in new cold wallets, which is a way of holding cryptocurrency tokens offline, said Ray.

    Ray was named CEO of FTX less than a week ago when the company filed for bankruptcy protection and its CEO and founder Sam Bankman-Fried resigned. The embattled cryptocurrency exchange, short billions of dollars, sought bankruptcy protection after the exchange experienced the crypto equivalent of a bank run.

    In its bankruptcy filing, FTX listed more than 130 affiliated companies around the globe. The company valued its assets between $10 billion to $50 billion, with a similar estimate for its liabilities.

    Bankman-Fried was recently estimated to be worth $23 billion. His net worth has all but evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s richest people.

    FTX’s failure goes beyond finance. The company had major sports sponsorships as well, including Formula One racing and a sponsorship deal with Major League Baseball. Miami-Dade County decided Friday to terminate its relationship with FTX, meaning the venue where the Miami Heat play will no longer be known as FTX Arena. Mercedes was planning to remove FTX from its race cars starting last weekend.

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  • Musk testifies in lawsuit over Tesla compensation package

    Musk testifies in lawsuit over Tesla compensation package

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    WILMINGTON, Del. — Tesla CEO Elon Musk took the witness stand Wednesday to defend himself in a shareholder lawsuit challenging a compensation package he was awarded by the company’s board of directors that is potentially worth more than $55 billion.

    Musk denied that he dictated terms of the compensation package or attended any meetings at which the plan was discussed by the board, its compensation committee, or a working group that helped develop it.

    “I was entirely focused on the execution of the company,” he said.

    Plaintiff’s attorney Greg Varallo spent much of his early cross-examination trying to draw Musk into admitting that he controls Tesla to such an extent that he can sway the board to do his bidding. Among other things, Varallo questioned Musk about his title of “Technoking,” a role that Musk has previously noted comes with “panache” and “great dance moves.”

    “I think comedy is legal,” Musk told Varallo, who had questioned whether Musk was “stone-cold sober” when he came up with the title.

    Varallo also suggested that one of the reasons that Musk developed a “master plan” for Tesla was to let people know he was in charge. He also noted that Musk makes recommendations regarding compensation for senior executives, and that he unilaterally made the decision to pause Tesla’s policy of accepting bitcoin from vehicle purchasers.

    “You’re asking complex questions that can’t be answered ‘yes’ or ‘no’,” Musk said when Varallo asked whether he came up with the vision for Tesla.

    The lawsuit alleges that the performance-based stock option grant was negotiated by the compensation committee and approved by Tesla board members who had conflicts interest due to personal and professional ties to Musk, including investments in his companies. It also alleges the shareholder vote approving the compensation plan was based on a misleading proxy statement.

    The shareholder plaintiff alleges that the proxy wrongly described members of the compensation committee as “independent,” and characterized all of the milestones that triggered vesting in the stock options as “stretch” goals meant to be difficult to achieve, even though internal projections indicated that three operational milestones were likely to be achieved within 18 months of the stockholder vote.

    Attorneys for the defendants have noted that two institutional proxy advising firms that urged shareholders to reject the plan nevertheless noted that it would require “significant and perhaps historic achievements” and require growth that “appear stretching by any benchmark.”

    The plan called for Musk to reap billions if Tesla hit certain market capitalization and operational milestones. For each incidence of simultaneously meeting a market cap milestone and an operational milestone, Musk, who owned about 22% of Tesla when the plan was approved, would get stock equal to 1% of outstanding shares at the time of the grant. His interest in the company would grow to about 28% if the company’s market capitalization grew by $600 billion.

    Each milestone in the plan includes growing Tesla’s market capitalization by $50 billion and meeting aggressive revenue and pretax profit growth targets. Musk would receive the full benefit of the pay plan, $55.8 billion, only if Tesla hit a market capitalization of $650 billion and unprecedented revenue and earnings within a decade.

    To date, Tesla has achieved all 12 of the market capitalization milestones and 11 operational milestones, resulting in the vesting of 11 of the grant’s 12 tranches and providing Musk over $52.4 billion in stock option gains, according to the lawsuit. Since the grant was awarded, Tesla’s market capitalization has increased from $59 billion to more than $613 billion now, having briefly hit $1 trillion early this year. Musk has sold Tesla stock to finance the Twitter purchase, adding downward pressure on the shares.

    Shares of Tesla and other automakers have been battered this year, but the Austin, Texas, company earned $5.5 billion in 2021, blowing away the previous year’s profit of $721 million. It also produced a record 936,000 vehicles, nearly double vehicle production in 2020.

    Attorneys for the plaintiff have suggested that incentivizing Musk to remain at Tesla’s helm by offering a huge compensation package was unnecessary, because he’s never suggested that he might leave. They’ve also suggested that Musk’s true motive in negotiating the package was to fund his dream to colonize Mars.

    In a November 2017 email to former Tesla General Counsel Todd Maron, Musk expressed optimism that the compensation package would be seen in a favorable light.

    “Given that this will all go to causes that at least aspirationally maximize the probability of a good future for humanity, plus all Tesla shareholders will be super happy, I think this will be received well,” he wrote, adding that “it should come across as an ultra bullish view of the future.”

    While on the stand, Musk also said that he does not want to be the CEO of any company.

    “I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” Musk said, according to multiple media reports.

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