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Darden's CEO who decided to sell Red Lobster will step down later in 2014 after the company finds a replacement
Darden CEO and chairman Clarence Otis, Jr. will step down from his positions after the company finds a replacement.
Clarence Otis Jr., currently both the chief executive officer and chairman of Darden, will step down from later this year, the company announced on Monday. Otis will remain in the CEO position either until a successor is named, or until December 31st, whichever comes first.
Effective immediately, the company has appointed lead independent director Charles A. Ledsinger Jr. as an independent non-executive chairman of the board.
Earlier this year, following Darden’s sale of Red Lobster — a move which the company's activtist investor Starboard Value saw as unwise — the company was urged to split the positions of CEO and chairman, calling Darden’s decision to give up Red Lobster the result of “a corporate bureaucracy that has demonstrated extremely poor leadership.”
During Otis’ tenure, Darden grew from $5.2 billion in annual sales to more than $8.7 billion in annual sales in 2014. However, Otis was criticized for what investors considered a shortsighted decision to sell Red Lobster, resulting in a loss in market value of $1 billion for the company.
“With the Red Lobster sale complete and progress on our Olive Garden brand renaissance and other strategic priorities underway, this is the right time for me to step down,” said Otis. “I am confident that they, under the leadership of our board and management team, will continue to make progress on the actions we are taking to reinvigorate restaurant performance and further enhance shareholder value.”
For the latest food and drink updates, visit our Food News page.
Karen Lo is an associate editor at The Daily Meal. Follow her on Twitter @appleplexy.
Danone caves to investors and moves CEO
Danone has split its CEO and chairman roles, but it is not enough to appease activist investors.
Dairy and baby food giant Danone has said Emmanuel Faber will step down as chief executive in an attempt to alleviate pressure from shareholders who have called for new management to revive the world’s largest yogurt maker.
Danone said it will separate the chairman and CEO positions, which Mr Faber has held for the past three years. Once the company finds a new CEO, Mr Faber will become non-executive chairman.
Danone is suffering on three fronts. Non-dairy substitutes are failing to compensate for a slowdown in yogurt. Meanwhile, demand for bottled water has wilted as restaurants close due to the pandemic, while infant formula sales weaken due to slowing birthrates.
Danone employs around 700 people in its baby food business in Ireland, across operations in Macroom, Wexford and Dublin.
“This is not a clean break,” wrote Bruno Monteyne, an analyst at Sanford C. Bernstein. The situation risks either leading to a new CEO who is controlled by Faber, or another stand-off with investors further down the line, he said.
Bluebell Capital Partners, one of the shareholders that campaigned for a management shake-up, said that the announcement marks a step in the right direction, but what Danone really needs is external leadership.
“There should be an outside candidate, somebody who is not connected to the past,” said Bluebell chief investment officer Giuseppe Bivona. “It’s good to split the role of chairman and CEO, but obviously what we want, what the company deserves, is an independent chairman, which clearly is not going to be the case.”
The company said the board unanimously supports Mr Faber, who will continue managing Danone until a new CEO arrives.
A rising chorus of shareholders, including Artisan Partners Asset Management and Causeway Capital Management called for a management revamp in recent weeks. Pressure on Mr Faber mounted as Danone’s shares lost a quarter of their value in 2020 and sales fell for the first time in more than 30 years.
Danone’s board also appointed Gilles Schnepp as vice chairman, alongside Cecile Cabanis, the company’s former chief financial officer. Mr Schnepp’s role as lead independent director will be transferred to Jean-Michel Severino, who also acts as head of the governance committee.
Analysts said that those shifts give Mr Faber more power, as he pushed for Mr Cabanis and Mr Schnepp to become new board members last year.
Mark McGettrick to Retire Jim Chapman Named Successor as Chief Financial Officer
RICHMOND, Va. , Oct. 9, 2018 /PRNewswire/ -- Dominion Energy (NYSE: D) today announced that Mark F. McGettrick , executive vice president and chief financial officer, will retire on Jan. 1, 2019 , capping a 38-year career at the company. Effective Nov. 1, 2018 , McGettrick will step down as chief financial officer. James R. "Jim" Chapman, senior vice president-Mergers & Acquisitions and treasurer, will succeed McGettrick as CFO. McGettrick will assist Chapman during the two-month transition.
Thomas F. Farrell, II , chairman, president and chief executive officer, said:
"Dominion Energy's shareholders, customers and employees have benefited greatly from Mark McGettrick's decades of exemplary service to the company. As chief of our generation unit, he led a buildout in Virginia that has helped improve the reliability of the electric service Dominion Energy provides to our utility customers in Virginia and North Carolina . As CFO, Mark has spearheaded and overseen tremendous capital growth across all of our businesses. In his time as CFO, our asset base has nearly doubled and our annual dividend rate has more than doubled. Mark has been outstanding in every way, and we will miss him.
"This year, Mark and Jim Chapman have worked together to complete our credit improvement initiatives – through a forward sale of equity, project debt at Cove Point and agreements to sell some non-core assets. They will continue their collaborative relationship through the end of the year to ensure a successful handoff of duties and to maintain cohesive and coordinated communications with our analysts and investors."
McGettrick joined the company in 1980. During his career, he held a variety of management positions in distribution design, accounting, financial planning, customer service and generation. He was named president of the services company in 2002 and chief executive officer of the generation operating unit in 2003. In June 2009 , he was promoted to chief financial officer, where his responsibilities have included treasury, accounting, tax, investor relations, risk management, business planning and financial analysis.
" Jim Chapman comes in as CFO with a wealth and depth of experience in the finance industry," Farrell said. "Jim's unique skillset of knowledge and agility has been on full display in our recent acquisitions of Carolina Gas Transmission, Questar Corporation and a larger stake in Iroquois. His promotion is part of a longstanding succession plan to fill top jobs at Dominion Energy."
Chapman, 49, came to Dominion Energy in 2013 after more than 20 years in investment banking and corporate finance, principally related to the utility and energy sector. Among his roles, he was managing director and head of Asia Pacific Power & Utilities Investment Banking at Barclays plc, as well as holding similar senior roles at Barclays and its predecessor firm, Lehman Brothers in New York and overseas. Chapman earned a bachelor's degree in history and political science from Auburn University and an MBA from the University of Virginia's Darden School of Business.
Chapman assumed his current post in February 2016 . Once he becomes the company's chief financial officer, he is expected to retain his role as treasurer.
Business Overview - DR I Stub
Post spin-off or sale, DRI will continue to operate as a full-service restaurant through its 1,469 restaurants located in the both U.S and Canada. The company will own and operate through seven restaurant brands including Olive garden, LongHorn Steakhouse, and SRG which includes, The Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s, and Yard House.
Olive Garden (approximately 62% OF total FY 13 sales): Olive Garden is a full service restaurant inspired by the Italian culture with operations in both U.S. and Canada. First Olive Garden Restaurant was opened in 1982. As on November 25, 2013, olive garden had 828 restaurants in U.S. and 6 restaurants in Canada. Each Olive Garden restaurant is typically managed by a general manager.
The restaurant brand has different menu for dinner and lunch. In addition, menu differs based on the location the restaurant operates, based on the consumer preferences, prices and selections, as well as a smaller portioned, lower-priced children’s menu. Olive Garden’s menu consists of a variety of Italian foods, which includes fresh ingredients and a wine list that included broader range of Italian imported wine. In addition, the menu consists of flatbreads and other appetizers soups, salad and garlic bread sticks, baked pastas, sautéed specialties with chicken, seafood and fresh vegetables, grilled meats, and a variety of desserts.
Dinner entry prices range from $10 to $20 and lunch entry prices range from $7 to $17.Average check per person was in the range of $16.25 to $16.75 during FY 13. Olive Garden advertises its brand through its national network television advertising, supplemented by cable, local television and digital advertising. In an effort to increase visits from Hispanic consumers, Olive Garden continued to develop advertising in Spanish language.
LongHorn Steakhouse (approximately 22% of total FY 13 sales): LongHorn Steakhouse restaurants are full service establishments, serving food in a classic American West atmosphere. DRI purchased LongHorn Steakhouse in 2007. As on November 25, 2013, LongHorn steak house had 445 restaurants operating in U.S. LongHorn restaurants are located across 38 states, with majority in the Eastern half of the U.S.
LongHorn Steakhouse menus differ according to the locations, preferences, prices and selections, as well as a smaller portioned, lower –priced children’s menu. Dinner price menus range from $12 to $23, and lunch menu prices range from $7 to $15. Average check price during FY 13 was approximately $18.5 to $19.0, with alcoholic beverages accounting for 9.6% of LongHorn’s Steakhouse’s sales.
Specialty Restaurant Group (approximately 17% of total FY 13 stub’s sales): DRI SRG at the time of RARE Hospitality International Inc (RARE) acquisition to support the operations of The Capital Grilles, Seasons 52 and Bahama Breeze restaurants. Later, both Eddie V’s and Yard House joined the specialty restaurant group as well. The specialty restaurant group is a portfolio of small to medium size, full service restaurant brands.
The Capital Grille: The Capital Grille is renowned for dry aging steaks, and is also known for fresh seafood and culinary specials created by chefs. The restaurants are located in major metropolitan cities in the United States. The Capital Grille offers award-winning wine list with over 350 selections, personalized service, comfortable club-like atmosphere, and premiere private dining rooms.
The restaurant offers separate menu for lunch and dinner, which varies according the geographic differences in consumer preferences, prices and selections. Most of the dinner items on the menu range from $28 to $51, and most lunch items range from $12 to $39. Alcoholic beverages accounted for approximately 29.8% of FY 13 sales. Average check per person was approximately $70.0 to $72.5.
Bahama Breeze: The restaurant offers food, drinks and ambience found in Caribbean islands. The restaurant’s menu includes distinctive, Caribbean Sea food, chicken, steaks, and signature specialty drinks. The restaurant offers menu for both lunch and dinner. Most lunch menu prices range from $7.5 to $16.5, and most dinner prices range from $9 to $23.Alcoholic beverage accounted for 22.1% of the restaurant’s sales. Average check per person was approximately in the range of $23.25 to $23.75.
Seasons 52: Seasons 52 brand was introduced in the year 2003. Seasons 52 is a fresh grill and wine bar with seasonally inspired menu and international wine list in an adult ambience. It holds its operations through private dining rooms, Chef’s table, and piano bar.
Seasons 52 has no item on the menu which is more than 475 calories. Seasons 52 has a different menu for both lunch and dinner. Menu differs on the basis of differences in consumer preferences, prices and selections. Average check per person was approximately in the range of $40.25 to $41.25. Alcoholic beverages contributed 26.9% of Seasons 52’s sales.
Eddie V’s: Eddie V’s restaurants are opened drawing inspiration from the great classic restaurants of New Orleans, San Francisco and Boston. The restaurant emphasizes on prime seafood creations, USDA prime beef and chops, and fresh oyster bar selections. Eddie V’s menu differs for dinner based on the geographical differences in consumer preferences, prices and selections. Dinner menu prices range from $18 to $49. Average check per person was approximately in the range of $87 to $89.
Yard House: Yard House offers contemporary American cuisine with chef-inspired recipes and ethnic flavors with a wide range of draft beers and other beverages. Most lunch prices at Yard House range from $9 to $17, and dinner prices range from $9.0 to $38.5. Alcoholic beverage accounted for 39.2% of the restaurants sales.
DRI has a broad range of differentiated and well established brands. The key to success in this includes, brand management excellence, restaurant operations excellence, supply chain, talent management and information technology, among other things. In order to have continued future growth, the company is modifying organizational structure to better leverage on existing experience and expertise and, adding new expertise in additional areas that are critical to future success.
The company commenced a more aggressive promotional campaign to beat competition, and also to gain market share. The company took initiatives focusing on Specialty Restaurant Group, enterprise-level sales building, digital guest and employee engagement, health and wellness, and centers of excellence. To maintain strong brand relevance and strengthen guest experience and loyalty, DRI is moving forward with a multi-year program to build and leverage a single digital technology platform. The company is leveraging on its expertise to increase its SSS and increase number of restaurants in each of its existing brands. On a cost side, the company focused on indentifying and pursuing transformational multi-year cost reduction opportunities. In FY14, DRI plan to implement three transformational initiatives which includes, automating supply chain, significantly reducing the use of energy, water and cleaning supplies in restaurants and optimizing labor costs within restaurants.
In an effect to leverage its market position, its brand, its expertise and other assets, the company is planning to address some changes in consumer demand and competitive dynamics in the restaurant industry. DRI has come up with four strategy plans, first, plan to separate Red Lobster, second, plans involving changes in capital allocation, third, increase focus on operating cost efficiency, and finally plan involving changes in management compensation and incentive plans.
Latest Earnings Update: Second Quarter ending November 24, 2013
Total sales from continuing operations were $2.1 billion compared to $2.0 billion during the prior year quarter, representing a growth of 5% YOY. This growth was primarily due to net new additions of 99 restaurants compared to the prior year quarter and SSS growth of 4% YOY for Company Specialty Restaurant Group, partially offset by 1% YOY decline in blended SSS of Olive Garden, Red Lobster and LongHorn Steakhouse. During the quarter, total company’s operating profit margins fell by approximately 140 basis points compared to prior year quarter. This was primarily due to weak SSS, store level margin, and higher general and administrative expense.
Olive Garden: Sales for the quarter was $869 million, an increase of 2% YOY, as compared to prior year quarter. The increase was primarily due to 25 net new restaurants opened during the last 12 months period. The increase from new store opening was partially offset due to decline in U.S. SSS of 0.6%. During the quarter, operating profit and operating profit as a percentage of sales increased due to lower restaurant expenses and selling, general and administrative expenses which were partially offset by an increase in food and beverage expenses, labor expenses and depreciation expense.
Red Lobster: Sales for the quarter was $561 million, an increase of 5% YOY, as compared to prior year quarter. The increase was primarily due to revenue from 46 net new restaurants and YOY SSS increase of 5%. On a percentage of sales basis, lower food and beverage expense, restaurant labor expenses and depreciation and amortization expenses were higher compared to the prior year quarter, while selling, general and administrative expenses were lower.
LongHorn Steakhouse: Sales for the quarter was $320 million, an increase of 17% YOY, as compared to prior year quarter. The increase in sales was driven by revenue increase from 46 net new restaurant and strong SSS increase. For the quarter, on a percentage of sales basis, lower food and beverage expenses, restaurant expenses and depreciation and amortization expenses were higher compared to prior year quarter, while selling, general and administrative expenses were lower.
The Specialty Restaurant Group: Sales for the quarter was $291 million, an increase of 21% YOY, as compared to prior year quarter. The increase was primarily due to 7% increase in SSS at the Capital Grille, 6% at Bahama Breeze, 6% at Eddie V’s, 1% at Yard House, and 1% at Seasons 52. Sales growth for the Group also reflected revenue from four new restaurants at The Capital Grille, four at Bahama Breeze, ten at Seasons 52, two at Eddie V’s and seven at Yard House.
Given the continued industry sales softness and trends at brands, the company now expects total sales growth in the range of 4% to 5%. DRI has lowered its SSS expectation for FY 14 to be in the range of negative 4% to 5% at Red lobster and negative 1% to 2% at Olive Garden, and positive 2% to 3% at LongHorn SteakHouse, compared to its earlier expectation of flat SSS on a blended basis. The company now expects that comparable sales for the industry will be flat to down 1% this year, which is about 50 to 100 basis points lower than what was expected. With lower sales expectations, DRI expects diluted net earnings per share will be down between 15% and 20%. The primary reason for lowering FY 14 estimates is due to downward adjustments in Red lobster expectation for the year. The company estimates effective tax rate during FY14 to be approximately 17%, which are about 400 basis points lower than prior year’s effective tax rate.
Revenue and Margin Profile
Sales from continuing operations during FY13 were $8.6 billion compared to $8.0 billion in FY 12, representing a growth of 8% YOY. The growth was primarily driven by the addition of 104 net new company-owned restaurants and 40 Yard House restaurants acquired during the period. During the period SRG’s blended SSS was 2%, partially offset by negative 1% blended SSS for Olive Garden, Red Lobster and LongHorn Steakhouse.
Olive garden’s sales during FY13 were $3.7 billion, an increase of 3% YOY. The increase was primarily driven by revenue from 36 net new restaurants partially offset by 2% YOY decrease in U.S. SSS. The decline in U.S. SSS was primarily due to 3% decrease in same-restaurant guest counts partially offset by 1% YOY increase in average check. Average annual sales per restaurant for Olive Garden was $4.6 million in FY13 compared to $4.7 million in FY12.
Red Lobster’s sales declined 2% YOY to $2.6 billion, primarily due to 2% decline in U.S SSS, partially offset by revenue from one net new restaurant. The decline in U.S. SSS was primarily due to 2% decline in U.S same-restaurant guest counts combined with a 0.4 % decrease in average guest check. Average annual sales per restaurant for Red Lobster were flat YOY.
LongHorn Steakhouse’s sales were $1.2 billion in FY13, an increase of 10% YOY, driven primarily due to revenue from 44 net new restaurants combined with 1% increase in SSS. The increase in SSS was primarily due to 1% increase in same-restaurants guest counts combined with 0.1% increase in average guest check. Average annual sales per restaurant for LongHorn Steakhouse were flat at $3.0 million during the year.
The Specialty Restaurant Group’s sales were $968 million in FY13, an increase of 58% YOY. The increase was primarily due to Yard House acquisition and new restaurants additions. During the period, Seasons 52 added 8 new restaurants, Yard House added 4 new restaurants, The Capital Grille added 3 new restaurants, Bahama Breeze added 3 new restaurants, and Eddie V’s added 1 new restaurant. During the FY 13, SSS increased 3% at The Capital Grille, 1% at Seasons 52, and 0.2% at Bahama Breeze.
AT&T’s strategy to bolster profits also includes potential job cuts, which was strongly opposed by a union that represents over 100,000 AT&T workers.
“The plan that AT&T announced today is something only a hedge fund manager could love,” Chris Shelton, the head of the Communications Workers of America, said in a statement. The group said it will “keep a close eye” on AT&T as it evaluates possible cuts.
In September, Elliott Management asked the company to stop striking new acquisitions, to increase dividends and share buybacks and to improve its efficiency by cutting workers and selling off underperforming divisions like DirecTV. The fund also said it was seeking seats on AT&T’s board. The two sides have been in talks over the last few weeks to broker an agreement.
Elliott Management also questioned AT&T’s ability to handle its newest property, WarnerMedia, the company behind CNN, the Warner Bros. movie studio and HBO. AT&T acquired the media giant — then called Time Warner — last year in a bid to find new growth and to distinguish itself from its chief rival, Verizon.
Last month, Elliott Management announced it had taken a $3.2 billion stake in AT&T, or about 1 percent of outstanding shares. The telecom behemoth is most likely the largest company the fund has taken on, and its limited stake meant it had less negotiating leverage than it had in previous campaigns.
The moves by AT&T address most of Elliott Management’s concerns. The hedge fund didn’t get any direct board seats, but AT&T will name a new director in the coming days who has the approval of Elliott Management, said two people familiar with the matter, who did not give their names because the plan has not yet been made public.
The investment group had also taken aim at John Stankey, the head of WarnerMedia whose elevation to chief operating officer of AT&T this month put him in line to succeed Mr. Stephenson. Citing the promotion, Elliott Management noted with disapproval that he “would now also be responsible for an additional $145 billion of revenue as the president and C.O.O. of the entire company.”
At the time, Elliott Management expressed concern over his lack of experience running a media business and his management of DirecTV. Mr. Stankey has spent the bulk of his career in the telephone business. (AT&T said it is reviewing candidates for chief executive of WarnerMedia.)
Mr. Stephenson’s commitment to stay through 2020 is a shift from a previous plan. He had considered stepping down next year, but his willingness to remain longer would delay any potential elevation for Mr. Stankey. The soonest he could succeed Mr. Stephenson would be 2021.
In the interview, Mr. Stephenson emphasized that the board has not set his retirement date. “One thing the board said is I need to see this plan through,” he said. Whether he stays beyond that “involves many factors,” he added.
Of the likelihood that Mr. Stankey will succeed him, Mr. Stephenson said, “If he executes on this plan over the coming years, he obviously has to be one of the primary candidates on the list.”
In addition to the profit plan, AT&T said it would evaluate its myriad divisions to see what no longer fits within its main business. This year, it sold off several smaller divisions and some real estate that together generated $6 billion in capital. AT&T said it now aims to sell more assets that could generate between $5 billion and $10 billion.
For the moment that may not include one of its largest divisions, DirecTV, the ailing satellite service. Mr. Stankey has said the service remains vital to its strategy, which includes targeted advertising and HBO Max.
More details on HBO Max — including its price — will be revealed at an investor presentation Tuesday afternoon on the Warner Bros. lot in Burbank, Calif.
Darden’s four new nominees include Gregory Burns, former CEO of the O𠆜harley’s restaurant chain Jeffrey Fox, chairman of customer-management company Convergys Corp. former Office Depot Inc. and AutoZone Inc. CEO Steve Odland and Enrique Silva, CEO of Checkers fast-food drive-in restaurants.
Darden rose 0.9 percent to $47.75 at the close in New York. Shares of the Orlando, Florida-based company have fallen 12 percent this year.
The restaurant operator today reaffirmed its forecast for adjusted profit of as much as $2.30 a share for this fiscal year. Analysts estimate $2.23, the average of projections compiled by Bloomberg.
Darden also announced preliminary fiscal first-quarter results. Same-store sales rose 2.8 percent for LongHorn and fell 1.3 percent at Olive Garden. The company, which owns about 1,500 restaurants, will report full earnings and sales on Sept. 12.
Darden, under pressure, to spin off or sell Red Lobster
(Reuters) - Darden Restaurants Inc DRI.N said it would spin off or sell its floundering Red Lobster chain, bowing to pressure from hedge fund Barington Capital Group, and warned that earnings would fall more than expected this year due to weak demand.
Barington, which represents shareholders who own more than 2 percent of Darden, and some Wall Street analysts contended that Darden’s move was not aggressive enough.
“While today’s announcement is a first step toward improving focus and operating execution at Red Lobster and Olive Garden, we view the plan Darden announced today as incomplete and inadequate,” James Mitarotonda, chairman and chief executive of Barington, said in a statement.
New York-based Barington says Darden has become too large and complex to compete with direct rivals such as Cheesecake Factory CAKE.O and Brinker International's EAT.N Chili's Grill & Bar. The company also is under pressure from popular limited-service chains like Chipotle Mexican Grill CMG.N , which have been stealing customers.
Barington has been pushing the company for months to split in two: one company to operate its mature Olive Garden and Red Lobster chains, and another for growing brands such as LongHorn Steakhouse, Seasons 52, Capital Grille and three others.
The hedge fund also has urged Darden, the largest U.S. full-service restaurant operator, to explore creating a publicly traded real estate investment trust (REIT) to “unlock the value” of its property holdings.
Barington said those actions could push Darden’s stock to between $71 and $80. The shares were down 4.9 percent to $50.34 in midday trading on the New York Stock Exchange.
Asked on a conference call with investment analysts why the company was keeping Olive Garden, Darden Chief Executive Clarence Otis said the chain contributes strong cash flow and is a significant part of the company. Olive Garden has historically contributed about half of Darden’s total revenue but of late has struggled to grow sales at established restaurants.
Otis said Darden had reviewed the potential for a REIT and determined that substantial costs and other factors did not make this a viable option.
“That is not something that we think makes sense going forward. We think the plan that we’ve outlined is a plan that best creates shareholder value,” he said.
Janney Capital Markets analyst Mark Kalinowski gave the plan a mixed review.
Father Finn, a Catholic priest who advises church groups on investment issues and is chairman of the Interfaith Center on Corporate Responsibility, said the leadership question was not his primary concern, but he figured that a proposal to split the role would probably get him a meeting with the bank’s top leadership.
It worked. Bank of America agreed to give Father Finn what he really wanted — a report detailing what went wrong at Bank of America during the mortgage crisis. And in return, Father Finn said he agreed to dropped his proposal to divide the top positions.
Even though the issue did not make it on the ballot at the annual meeting, the proxy advisory firms Institutional Shareholder Services and Glass Lewis urged the bank’s shareholders to vote against members of the board’s corporate governance committee because of the unilateral decision to combine the titles.
Acknowledging the extent of the shareholders’ displeasure, the bank decided to put the issue to a special vote and started campaigning.
A major player in the effort is the bank’s lead independent director, Jack O. Bovender Jr., a former health care executive and Duke University trustee. Described by a bank colleague as the consummate Southern gentleman, Mr. Bovender has been making the rounds of investors, explaining why the board moved to make Mr. Moynihan both chairman and chief executive.
Mr. Bovender has not been able to win over everyone, though. In a conversation last month, he told Institutional Shareholder Services how he agreed to take a leadership role at the bank only if no other board member wanted to step in.
Mr. Bovender was speaking “tongue in cheek,” a person briefed on the matter said. But apparently the proxy advisory firm did not see it that way, calling his anecdote “particularly telling.”
“While shareholders should be glad that Bovender stepped into this leadership vacuum by accepting the lead director role,” it wrote in its report, “it calls into question the board’s acceptance of an individual without relevant industry experience.”
With I.S.S. and Glass Lewis recommending that the jobs of chief executive and chairman be separated, the bank most likely lost as much as 30 percent of the vote because certain shareholders vote automatically with the proxy firms, people briefed on the matter said.
In trying to win over other investors, the bank has had to navigate somewhat unfamiliar territory. Each large investor approaches these votes differently. Some firms consider the opinions of their portfolio managers and analysts, who recommend whether to buy the bank’s shares. Others allow only their corporate governance committees to weigh in.
Bank of America cannot even lobby its largest shareholder, BlackRock, directly. Because BlackRock is partly owned by another bank, PNC Financial Services, the giant asset manager has to outsource its vote to an independent fiduciary so as not to run afoul of the Bank Holding Company Act.
A BlackRock spokesman declined to name the outside fiduciary, citing “company policy.”
Last week, Bank of America got help from Mr. Buffett, who said in a television interview that Mr. Moynihan deserved both titles.
Then, Mr. Frank voiced support for the combined roles, calling Mr. Moynihan “one of the more constructive” bank leaders in helping shape recent financial regulation.
Mr. Frank is not a Bank of America shareholder. But his endorsement could persuade some unions or progressive-minded investors to break from the California funds and back the bank’s position.
Mr. Frank said he volunteered to speak publicly after discussing it with his neighbor in Newton, a Boston suburb, who works for the bank in communications and public policy. Mr. Frank, who recently joined the board of Signature Bank, a small commercial bank in New York, said the most important oversight of financial companies comes not from its directors but from regulators.
Darden CEO rebuffs plan to put Red Lobster sale to vote
(Reuters) - Darden Restaurants Inc , under scrutiny from two activist investors over a plan to sell or spin off its Red Lobster chain, on Friday resisted pressure put the divestiture of the struggling seafood restaurants to a shareholder vote. Shares in Orlando-based Darden were up 2.9 percent to $50.73 in early trading after it also reported fiscal third-quarter results in line with its previously lowered expectations. Still, the results showed a severe deterioration at Red Lobster, which accounts for an estimated 30 percent of revenue at Darden, whose other chains include Olive Garden and the Capital Grille. Darden announced plans on December 19 to spin off or sell its 705-restaurant Red Lobster chain. The company said the transaction would not require a shareholder vote and could close in the fiscal year beginning May 26. Activist investors Starboard Value LP and Barington Capital Group are pressing Darden to move more boldly to improve performance at the company, the biggest U.S. operator of full-service restaurants. Starboard, which owns about 5.5 percent of Darden shares, is soliciting support for its bid to hold a special shareholder meeting to vote on Darden's Red Lobster plan. Darden, which canceled its analyst and investor meeting slated for later this month, said it prefers to have one-on-one discussions with investors. "We believe that shareholders should continue to engage directly with the company and should not view a special meeting as a substitute for that ongoing two-way engagement," Darden Chief Executive Officer Clarence Otis said on a conference call on Friday. The activists' calls for more robust interventions gained urgency after Darden warned earlier this month that closely watched same-restaurant sales at Red Lobster and Olive Garden, its marquee chains, had fallen sharply in the latest quarter due in part to severe winter weather. Darden said on Friday that sales at established restaurants tumbled 8.8 percent at Red Lobster and 5.4 percent at Olive Garden in the third quarter ended February 23. Red Lobster suffered double-digit percentage declines in customer visits in each month of the latest quarter, chalking up nine straight months of falling traffic. Darden's quarterly net income was down 18 percent to $109.7 million, or 82 cents per share. Barington, which represents a group of shareholders that holds more than 2 percent of Darden shares, wants the company to split its businesses. One company would operate the mature Olive Garden and Red Lobster chains. The other would own brands like LongHorn Steakhouse, Seasons 52, Capital Grille and three others. It also is pushing Darden to explore creating a publicly traded real estate investment trust (REIT) to "unlock the value" of its property holdings, which it has valued at about $4 billion before leakage costs. Barington also wants Darden's board to split the chairman and CEO roles. Otis has been CEO since November 2004 and chairman since November 2005. Otis orchestrated Darden's acquisitions of LongHorn Steakhouse, Capital Grille, Eddie V's and Yard House. Barington and other critics say those moves led to a lack of focus, bloated operating costs and roughly 18 months of market share losses at its three biggest brands. (Reporting by Lisa Baertlein and Aditi Shrivastava Editing by Savio D'Souza and Chizu Nomiyama)
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China reports 15 new COVID-19 cases on May 24 vs 18 a day earlier
PG&E to Sell San Francisco Headquarters for $800 Million
(Bloomberg) -- PG&E Corp. has reached a deal to sell its iconic San Francisco headquarters to real estate joint-venture Hines Atlas for $800 million as the utility giant moves to cut costs after it emerged from bankruptcy last year.PG&E, which plans to move to Oakland next year, needs approval from state regulators to sell the 1.7 million-square-foot (158,000-square-meter) complex, which includes 77 Beale Street and 245 Market Street, according to a statement Monday.The sale comes as office markets around the globe have been battered by the coronavirus pandemic. One broker estimated in 2019 that PG&E’s headquarters could bring in more than $1 billion. The utility giant is one of the most high-profile companies to leave San Francisco for Oakland, a less expensive city located across San Francisco Bay.Nearly a dozen bids were submitted for the property, according to a person familiar with the matter. That level of interest suggests real estate investors are willing to bet on a rebound for office demand in the city.“It’s a fantastic bet on San Francisco,” said J.D. Lumpkin, executive managing director at commercial real estate brokerage Cushman & Wakefield in San Francisco, who wasn’t involved in the deal. “While San Francisco has taken its lumps through Covid, perhaps more than other cities, there’s a lot of evidence that we will rebound over the next two or three years.”PG&E didn’t immediately respond to a request for comment about the bids. The company’s shares rose as much as 2.1% Monday.Unlike some other large property sales in San Francisco since the pandemic, the complex will require a substantial amount of renovation. It also doesn’t have a tenant in place, so the buyers will have to fill it in a few years once the redevelopment is finished.Also See: KKR Said to Buy $1.08 Billion San Francisco Dropbox OfficesSan Francisco’s overall office vacancy rate in the first quarter shattered the previous record high hit during the dot-com bust at the turn of the century, according to CBRE Group Inc. That’s pushed rent down and weighed on the value of buildings.The sale price is about $200 million less than expected, Citigroup Inc. utility analyst Ryan Levine wrote in a research note Monday. That raises the prospect that PG&E may need to raise equity this year, he said.Offset BillsPG&E intends to distribute about $400 million from its gain on the sale to customers over five years to offset bill increases as it invests in safety and operational improvements. In an added benefit, most PG&E workers will have shorter commutes to their new office, the company said.CBRE’s San Francisco Capital Markets team brokered the deal.PG&E filed for bankruptcy in early 2019 after collapsing under liabilities from wildfires sparked by its equipment. Though the company exited Chapter 11 last year, it remains burdened by about $42 billion of debt, raising concerns about its financial durability and ability to make the investments required to fire-proof its grid.Hines is one of the biggest private real estate investors and managers in the world, according to its website. Hines Atlas is a joint venture between Hines and another investor, a Hines spokesman said. He declined to name the other investor.(Adds details of bid beginning in fourth paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Fed's balance sheet could reach $9 trillion by end of 2022, NY Fed report projects
(Reuters) -The Federal Reserve's ongoing asset purchases could lead the central bank's portfolio to grow to $9.0 trillion by the end of 2022, according to projections https://www.newyorkfed.org/medialibrary/media/markets/omo/omo2020-pdf.pdf released by the New York Fed on Monday. Reserve balances could peak at $6.2 trillion by the end of 2022 and then steadily decline, according to the forecasts, issued as part of an annual report conducted by the markets team at the New York Fed. The Fed's portfolio could hold steady through 2025 if proceeds from maturing securities are reinvested.
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Are Growth Stocks Ready To Blastoff
It’s an annoying fact of life. I have some sobering news for you. According to a study, you’ll spend an average of 2 years of your life waiting in lines. You’ll also feel less anxious waiting in a single line as opposed to multiple lines.
Boom in Chinese Firms Listing in the U.S. Comes to a Sudden Halt
(Bloomberg) -- At least three Chinese companies have put their plans to list in the U.S. on hold, heralding a slowdown in what’s been a record start to a year for initial public offerings by mainland and Hong Kong firms.A bike-sharing platform, a podcaster and a cloud computing firm are among popular Chinese corporates holding off plans for a U.S. float, put off by recent market declines, souring investor sentiment toward fast-growth companies and lackluster debuts by peers like Waterdrop Inc.Hello Inc., Ximalaya Inc. and Qiniu Ltd. are postponing plans to take orders from investors, even though the three had filed paperwork with the Securities and Exchange Commission well over two weeks ago. In the U.S., companies can kick off their roadshows two weeks after filing publicly and most typically stick to that timetable.“The recent broad market selloff, combined with the correction of the IPO market since the beginning of last month when some new issuers tanked during their debuts, may make the market conditions less predictable for newcomers who are ‘physically’ ready -- meaning they have cleared all regulatory hurdles for IPO -- to get out of the door,” said Stephanie Tang, head of private equity for Greater China at law firm Hogan Lovells. “Some participants may choose to monitor the market for more stable conditions.”The delays throw a wrench in a listings flood by Chinese and Hong Kong companies in the U.S. that already reached $7.1 billion year-to-date -- the fastest pace on record -- after booming in 2020. Demand for IPOs surged as a wave of global stimulus money, ultra-low interest rates and rallying stock markets lured investors despite Sino-American tensions and the continued risk of mainland stocks being kicked off U.S. exchanges.READ: Stock Market’s Million Little Dramas Come Down to a Supply GlutThe S&P 500 Index capped its biggest two-week slide since February on Friday amid mounting investor concern over inflation and its impact on tech and other growth stocks. China’s CSI 300 Index remains in a technical correction, having fallen more than 10% from a February peak, while the Nasdaq Golden Dragon China Index, which tracks Chinese companies listed in the U.S., has slumped 30% from its high that month.‘Less Predictable’Hello, which offers a bike-sharing platform plus electric scooters for sale, has delayed its planned launch and is still undecided on its prospective valuation given rising investor caution about new shares, Bloomberg News has reported. It had been planning to raise between $500 million and $1 billion in the offering, although the final number will depend on valuations, according to one person with knowledge of the matter.Online podcast and radio services startup Ximalaya and enterprise cloud services provider Qiniu have put their listings on hold after beginning to gauge investor interest at the end of April, people with knowledge of the matter said, asking not to be identified as the information isn’t public.The sounding out of investors, or pre-marketing process, generally comes after filing for an IPO and before formal order-taking in a roadshow. Hello declined to comment while Qiniu didn’t immediately respond to an emailed request for comment. Ximalaya’s IPO process is ongoing and the company will seek public listing at an appropriate time depending on market conditions, it said in response to questions.Weak DebutsThe poor performance of recent Chinese debutants has also sapped investor confidence. Insurance tech firm Waterdrop has plunged 40% from its offer price since going public earlier this month. Onion Global Ltd., a lifestyle brand platform, has fallen about 9% below its IPO price.In fact, almost 59% or specifically 20 of the 34 Chinese firms that have listed in the U.S. this year are under water, data compiled by Bloomberg show, among them the two largest IPOs -- e-cigarette maker RLX Technology Inc. and online Q&A site Zhihu Inc. Of the ones that listed in 2020, just 40% are trading below their IPO prices.The recent volatility in global markets has spooked U.S. companies as well. They have also been delaying floats or facing weak debuts.For some, the current challenges faced by Chinese listing hopefuls are likely to be transitory, with the hotly-anticipated IPO of ride-hailing giant Didi Chuxing Inc., which has filed confidentially for a multibillion-dollar offering, set to prove the real test of investor appetite for the China story.“There is a natural strong growth in China which international investors will still want to invest in over the longer term,” said Gary Dugan, chief executive officer at the Global CIO Office in Singapore.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
China Braces for $1.3 Trillion Maturity Wall as Defaults Surge
(Bloomberg) -- Even by the standards of a record-breaking global credit binge, China’s corporate bond tab stands out: $1.3 trillion of domestic debt payable in the next 12 months.That’s 30% more than what U.S. companies owe, 63% more than in all of Europe and enough money to buy Tesla Inc. twice over. What’s more, it’s all coming due at a time when Chinese borrowers are defaulting on onshore debt at an unprecedented pace.The combination has investors bracing for another turbulent stretch for the world’s second-largest credit market. It’s also underscoring the challenge for Chinese authorities as they work toward two conflicting goals: reducing moral hazard by allowing more defaults, and turning the domestic bond market into a more reliable source of long-term funding.While average corporate bond maturities have increased in the U.S., Europe and Japan in recent years, they’re getting shorter in China as defaults prompt investors to reduce risk. Domestic Chinese bonds issued in the first quarter had an average tenor of 3.02 years, down from 3.22 years for all of last year and on course for the shortest annual average since Fitch Ratings began compiling the data in 2016.“As credit risk increases, everyone wants to limit their exposure by investing in shorter maturities only,” said Iris Pang, chief economist for Greater China at ING Bank NV. “Issuers also want to sell shorter-dated bonds because as defaults rise, longer-dated bonds have even higher borrowing costs.”The move toward shorter maturities has coincided with a Chinese government campaign to instill more discipline in local credit markets, which have long been underpinned by implicit state guarantees. Investors are increasingly rethinking the widely held assumption that authorities will backstop big borrowers amid a string of missed payments by state-owned companies and a selloff in bonds issued by China Huarong Asset Management Co.The country’s onshore defaults have swelled from negligible levels in 2016 to exceed 100 billion yuan ($15.5 billion) for four straight years. That milestone was reached again last month, putting defaults on track for another record annual high.The resulting preference for shorter-dated bonds has exacerbated one of China’s structural challenges: a dearth of long-term institutional money. Even before authorities began allowing more defaults, short-term investments including banks’ wealth management products played an outsized role.Social security funds and insurance firms are the main providers of long-term funding in China, but their presence in the bond market is limited, said Wu Zhaoyin, chief strategist at AVIC Trust Co., a financial firm. “It’s difficult to sell long-dated bonds in China because there is a lack of long-term capital,” Wu said.Chinese authorities have been taking steps to attract long-term investors, including foreign pension funds and university endowments. The government has in recent years scrapped some investment quotas and dismantled foreign ownership limits for life insurers, brokerages and fund managers.But even if those efforts gain traction, it’s not clear Chinese companies will embrace longer maturities. Many prefer selling short-dated bonds because they lack long-term capital management plans, according to Shen Meng, director at Chanson & Co., a Beijing-based boutique investment bank. That applies even for state-owned enterprises, whose senior managers typically get reshuffled by the government every three to five years, Shen said.The upshot is that China’s domestic credit market faces a near constant cycle of refinancing and repayment risk, which threatens to exacerbate volatility as defaults rise. A similar dynamic is also playing out in the offshore market, where maturities total $167 billion over the next 12 months.For ING’s Pang, the cycle is unlikely to change anytime soon. “It may last for another decade in China,” she said.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Battered Bitcoin claws back losses as oil rallies on recovery hopes
Consumer-related stocks helped tip London markets into the green, following two weeks of drops, helped by a weekend of Covid restrictions being eased. “It seems investors have had a good weekend and have realised how many other people have also been enjoying newly reinstated opportunities,” said Danni Hewson, financial analyst at AJ Bell. “From cinemas to restaurants, shops to bingo halls, real life has translated into share gains for companies like Primark owner Premier Foods, The Restaurant Group and the Rank Group.” The domestically-focused FTSE 250 index added 84.31 points to close at 22,483. Gambling company Rank Group led the leaderboard, rising 14.2p to 196.2p, followed by Mr Kipling’s parent Premier Foods, which gained 6p to 107.6p. Joining them in the top 10 was Frankie & Benny’s owner The Restaurant Group, which added 6.4p to 128.4p, as well as pub chain Wetherspoon. Similar types of blue-chip companies helped push the FTSE 100 to close in positive territory, though gains were tempered by miners which mostly fell after China’s commodity price warnings. Meanwhile, stocks globally struggled for momentum as investors awaited key US inflation readings for guidance on monetary policy. London’s benchmark FTSE 100 edged up 33.54 points to close at 7,051.59 Catering company Compass Group led the charge, up by 43p at £15.82. Gambling firms Entain and Flutter Entertainment also finished in the top 10, gaining 35.5p to £16.14 and 270p to £13.20 respectively. They were followed by hotel owners Intercontinental Hotels Group and Whitbread, which rose 98p to £49.22 and 59p to £31.50, respectively. Heavyweight oil stocks also performed well as oil prices extended Friday’s rally and climbed higher after Iran said that gaps remain in negotiations aimed at reaching a deal to end US sanctions on its crude. Iran said there are still differences around the timing of when countries will return to compliance with the original 2015 nuclear agreement, allaying some concern about a rapid ramp-up in the Persian Gulf nation’s output. While the market is anticipating the Islamic Republic’s supply will pick up again by late summer, the demand recovery will be strong enough to absorb it, according to Goldman Sachs. The bank expects Brent futures to hit $80 (£57) a barrel in the next few months. Royal Dutch Shell added 10.4p to £13.50, while BP rose 4.2p to 316.4p. Dominating the bottom of the rankings and dragging on the index, however, were miners including Fresnillo, Antofagasta, BHP and Evraz. RBC also cut its price target on Chilean miner Antofagasta. Elsewhere among companies, shares of FTSE 250 software firm Kainos fell 25p to £13.87 despite saying its annual pre-tax profit more than doubled in an eleventh consecutive year of growth, surging 124pc to £57.1m in the year through March. Revenue grew by 31pc to £234.7m while booking rose 6pc.
Exclusive-HSBC CEO says Bitcoin not for us
LONDON (Reuters) -HSBC has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency, its Chief Executive Noel Quinn told Reuters. Europe's largest bank's stance on cryptocurrencies comes as the world's biggest and best-known, Bitcoin, has tumbled nearly 50% from the year's high, after China cracked down on mining the currency and prominent advocate Elon Musk tempered his support. It marks it out against rivals such as Goldman Sachs, which Reuters in March reported had restarted its cryptocurrency trading desk, and UBS which other media said was exploring ways to offer the currencies as an investment product.
U.S. Treasury deputy chief sees G7 backing for 15%-plus global minimum tax
WASHINGTON (Reuters) -U.S. Treasury Deputy Secretary Wally Adeyemo said he expects strong backing from G7 peers for Washington's proposed 15%-plus global minimum corporate tax, which should help solidify support in the U.S. Congress for domestic corporate tax legislation. "My sense is that you're going to see a lot of unified support amongst the G7 moving forward," Adeyemo told Reuters on Monday after France, Germany, Italy and Japan made positive comments about the Treasury's proposal.
First Warning Sign in Global Commodity Boom Flashes in China
(Bloomberg) -- One pillar of this year’s blistering commodities rally -- Chinese demand -- may be teetering.Beijing aced its economic recovery from the pandemic largely via an expansion in credit and a state-aided construction boom that sucked in raw materials from across the planet. Already the world’s biggest consumer, China spent $150 billion on crude oil, iron ore and copper ore alone in the first four months of 2021. Resurgent demand and rising prices mean that’s $36 billion more than the same period last year.With global commodities rising to record highs, Chinese government officials are trying to temper prices and reduce some of the speculative froth that’s driven markets. Wary of inflating asset bubbles, the People’s Bank of China has also been restricting the flow of money to the economy since last year, albeit gradually to avoid derailing growth. At the same time, funding for infrastructure projects has shown signs of slowing.Economic data for April suggest that both China’s economic expansion and its credit impulse -- new credit as a percentage of GDP -- may already have crested, putting the rally on a precarious footing. The most obvious impact of China’s deleveraging would fall on those metals keyed to real estate and infrastructure spending, from copper and aluminum, to steel and its main ingredient, iron ore.“Credit is a major driver for commodity prices, and we reckon prices peak when credit peaks,” said Alison Li, co-head of base metals research at Mysteel in Shanghai. “That refers to global credit, but Chinese credit accounts for a big part of it, especially when it comes to infrastructure and property investment.”But the impact of China’s credit pullback could ripple far and wide, threatening the rally in global oil prices and even China’s crop markets. And while tighter money supply hasn’t stopped many metals hitting eye-popping levels in recent weeks, some, like copper, are already seeing consumers shying away from higher prices.“The slowdown in credit will have a negative impact on China’s demand for commodities,” said Hao Zhou, senior emerging markets economist at Commerzbank AG. “So far, property and infrastructure investments haven’t shown an obvious deceleration. But they are likely to trend lower in the second half of this year.”A lag between the withdrawal of credit and stimulus from the economy and its impact on China’s raw material purchases may mean that markets haven’t yet peaked. However, its companies may eventually soften imports due to tighter credit conditions, which means the direction of the global commodity market will hinge on how much the recovery in economies including the U.S. and Europe can continue to drive prices higher.Some sectors have seen policy push an expansion in capacity, such as Beijing’s move to grow the country’s crude oil refining and copper smelting industries. Purchases of the materials needed for production in those sectors may continue to see gains although at a slower pace.One example of slowing purchases is likely to be in refined copper, said Mysteel’s Li. The premium paid for the metal at the port of Yangshan has already hit a four-year low in a sign of waning demand, and imports are likely to fall this year, she said.At the same time, the rally in copper prices probably still has a few months to run, according to a recent note from Citigroup Inc., citing the lag between peak credit and peak demand. From around $9,850 a ton now, the bank expects copper to reach $12,200 by September.It’s a dynamic that’s also playing out in ferrous metals markets.“We’re still at an early phase of tightening in terms of money reaching projects,” said Tomas Gutierrez, an analyst at Kallanish Commodities Ltd. “Iron ore demand reacts with a lag of several months to tightening. Steel demand is still around record highs on the back of the economic recovery and ongoing investments, but is likely to pull back slightly by the end of the year.”For agriculture, credit tightening may only affect China’s soaring crop imports around the margins, said Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultant Co. Less cash in the system could soften domestic prices by curbing speculation, which may in turn reduce the small proportion of imports handled by private firms, he said.The wider trend is for China’s state-owned giants to keep importing grains to cover the nation’s domestic shortfall, to replenish state reserves and to meet trade deal obligations with the U.S.No DisasterMore broadly, Beijing’s policy tightening doesn’t spell disaster for commodities bulls. For one, the authorities are unlikely to accelerate deleveraging from this point, according the latest comments from the State Council, China’s cabinet.“Internal guidance from our macro department is that the country won’t tighten credit too much -- they just won’t loosen further,” said Harry Jiang, head of trading and research at Yonggang Resouces, a commodity trader in Shanghai. “We don’t have many concerns over credit tightening.”And in any case, raw materials markets are no longer almost entirely in thrall to Chinese demand.“In the past, the inflection point of industrial metal prices often coincides with that of China’s credit cycle,” said Larry Hu, chief China economist at Macquarie Group Ltd. “But that doesn’t mean it will be like that this time too, because the U.S. has unleashed much larger stimulus than China, and its demand is very strong.”Hu also pointed to caution among China’s leaders, who probably don’t want to risk choking off their much-admired recovery by sharp swings in policy.“I expect China’s property investment will slow down, but not by too much,” he said. “Infrastructure investment hasn’t changed too much in the past few years, and won’t this year either.”Additionally, China has been pumping up consumer spending as a lever for growth, and isn’t as reliant on infrastructure and property investment as it used to be, said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong. The disruption to global commodities supply because of the pandemic is also a new factor that can support prices, he said.Other policy priorities, such as cutting steel production to make inroads on China’s climate pledges, or boosting the supply of energy products, whether domestically or via purchases from overseas, are other complicating factors when it comes to assessing import demand and prices for specific commodities, according to analysts.(Updates copper price in 11th paragraph.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Gold Price Futures (GC) Technical Analysis – Big Challenge for Gold Bulls at $1899.20 Retracement Level
The direction of the August Comex gold futures market on Monday is likely to be determined by trader reaction to the major 50% level at $1899.20.
And Smith does not appear to be letting up. In a recent statement, he declared that Darden's cession of three seats was not good enough.
"We view the Company's decision to nominate nine of twelve director candidates as a transparent tactic designed to manipulate and maintain the problematic status quo majority following the 2014 Annual Meeting," Smith said in last week's statement. "This is yet another example of the Board attempting to make an easy decision. Rather than working toward the best possible Board for shareholders, the Board is only willing to offer representation for vacancies created by retiring directors. It is clear that such token Board change is not sufficient given the depth of the value destruction and the abominable corporate governance that this Board has overseen. That this Board would think that the retirement of just two independent directors would erase years of poor performance and oversight demonstrates once again that this Board is out of touch with reality and unwilling to take responsibility for its mistakes or to make the difficult decisions that are necessary to benefit shareholders."