Tag Archives: companies

E-Cigarette Regulations Survive Industry’s Legal Challenge

U.S. rules for marketing e-cigarettes withstood a legal challenge by a maker of the devices and an industry group.

A federal appeals court in Washington on Tuesday upheld regulations by the Food and Drug Administration, stating that “e-cigarettes are indisputably highly addictive and pose health risks, especially to youth, that are not well understood.”

Nicupure Labs LLC and the Right to be Smoke Free Coalition argued that the FDA’s Tobacco Control Act rules on the marketing of new tobacco products should not be applied to e-cigarettes. The court said the rules were rational and not arbitrary.

https://www.bnnbloomberg.ca/e-cigarette-regulations-survive-industry-s-legal-challenge-1.1360465

Intel Is First to Share Detailed Pay Disparities. It’s Not Flattering.

It’s not really a surprise that white and Asian men dominate the top pay tiers among Intel’s U.S. workforce. That’s been true in the tech industry for years. What’s unusual is the excruciating level of detail about pay disparity the chipmaker is releasing Tuesday to the public—information it could have kept secret.

In addition to its annual update on the outlook for women and people of color at the company, Intel on Tuesday released the results of a new report it sent to the U.S. Equal Employment Opportunity Commission that gives unprecedented pay, race and gender data for about 51,000 U.S. workers. Intel is the first company to release the otherwise private data.

The results are not flattering. Among 52 top executives at Intel, who all earn more than $208,000—the top pay band the EEOC tracks—29 are white men, 11 are Asian men and 8 are white women. The remaining tally is 1 each for Asian women, black women and black men, with no Hispanic men among executives in that top tier.

The ratio was similarly skewed across manager, professional and technician job classifications, with white and Asian men dominating top pay groups and women and people of color clustered in the lower bands. One in four white men at Intel are in the top salary tier, earning at least $208,000, a higher share than any other group. Rates are far lower for women and underrepresented minorities; less than 10% of black employees are top earners.

“It’s difficult to really fix what you aren’t being transparent about,” said Barbara Whye, Intel’s chief diversity and inclusion officer and a vice president in human resources. The chipmaker is making itself “very vulnerable,” she says, to “do the right things,” and she hopes her peers will follow and share pay information, too. “These are industry-wide problems,” Whye said. “They are going to require industry-wide solutions to resolve them.” So far, no other companies have said they’ll do the same. 

Intel joins a small but growing number of companies that have released gender and racial pay data, often under pressure from investors. The transparency may be laudable, but it is often overshadowed by what is revealed. Annual diversity reports from the biggest tech companies from the last half decade have shown scant progress in advancing the numbers of under-represented workers.

Companies that choose to release this kind of information risk backlash. Citigroup this year faced criticism after it voluntarily released median pay data that showed women at the bank earn 29% less than men do.

Intel’s report finds that within job types—not just at the top—white men dominate the highest salary band. Two-thirds of employees fall into a job group called “professionals,” which includes includes non-managerial office workers and programmers. Nearly all earn at least $80,000 per year, but white and Asian men have the highest salaries. Black, Hispanic and other minorities are overrepresented in the bottom half of the pay ranges. 

Even if the numbers look bad, companies will ultimately benefit more from leading on disclosure than they would from dragging their heels, said Natasha Lamb, managing partner at Arjuna Capital, which pressures companies to disclose gender pay data. The point is not to beat up on organizations for telling the truth, she said. “It’s much more important to have an accurate reflection of reality than to glaze over the simple truth,” she said. “These companies are not as diverse and equal as they could be.”

In 2015, Intel set a goal to have women make up at least 26% of its workforce by 2020. The company met that last year and is working to increase the percentage of women among top executives now to 26%, too, Whye said. Intel says representation among its total U.S. workforce and for technical employees has improved—underrepresented workers make up 15.8% of the company up from 14.6% last year. Women as a percentage of the workforce fell slightly to 26.5% from 26.8%.

Overrepresentation of white men in the highest-paying jobs contributes to the nation’s wage gap: American women earn 20% less than men do, and the gap is even wider for women of color. Intel’s disclosure shows that these disparities can’t be fixed simply by raising the salaries of women and minorities. Whye said the company’s task is to help underrepresented groups get promoted into more lucrative roles and keep them there. 

The data provided to the EEOC covered 2017 and 2018 and was collected from nearly all U.S. companies for the first time this fall under an initiative started by President Barack Obama. By law, the forms stay private unless a company makes them public. 

This could be the only time the EEOC collects worker pay broken down by race, sex and ethnicity, making Intel’s disclosure a unique window into company compensation, and how it results in wage gaps. The agency has been soliciting the data since July and could continue to do so until January under a federal judge’s order. But the EEOC has said it won’t pursue future collections in this form. 

In the U.K. where companies are required to publicly report wage gaps between male and female workers, the disclosures have shown the benefits and limits of transparency, said Harini Iyengar, a lawyer who advocates for equal pay in Britain. “A lot of members of the public who don’t pay an interest generally in labor market issues are quite shocked at the scale of the pay disparity,” she said. “So that’s been very positive because people are genuinely shocked.”

But so far the nation-wide initiative has not resulted in measurable change, she said: “What I’m seeing is collective hand-wringing about, ‘Oh no, this is not good enough. But look everyone else in our industry sectors is in the same boat. So that’s all right then.’”

https://www.bnnbloomberg.ca/intel-is-first-to-share-detailed-pay-disparities-it-s-not-flattering-1.1360422

Modi Considers Excluding $7 Billion of Air India Debt to Lure Buyers

 India is considering a plan to exclude more than half of Air India Ltd.’s $11 billion of debt in the government’s latest attempt to lure investors to the struggling carrier, people with knowledge of the matter said.

Prime Minister Narendra Modi’s administration plans to ask proposed investors to take over 300 billion rupees of the airline’s debt, which are backed by the carrier’s aircraft, the people said, asking not to be identified, citing private information. The government may call for the so-called expression of interest as early as Dec. 15, the people said.

Modi’s administration, which failed to attract any bidder for the carrier last year, is keen to sell the company to help bridge a widening fiscal deficit following dismal tax collections and cuts to corporate tax rates worth $20 billion. Last week, the government decided to sell its entire stake in the country’s second-largest state refiner, and its biggest shipping company.

Unprofitable for a decade with taxpayers bailing it out repeatedly, Air India’s appeal to any investor is contingent on the government’s ability to write off the debt not backed by assets. The government has pumped in 560 billion rupees in the last past decade in a bid to keep the carrier afloat, the people said.

A spokesman at India’s finance ministry, which handles assets sales, was not immediately available for a comment.

The government will absorb 500 billion rupees worth of obligations, the people said. Air India Assets Holding Ltd., a special purpose vehicle, holds about 300 billion rupees of the state-owned carrier’s debt and some of its assets, they said.

The SPV expects to raise 100 billion rupees selling the assets, the people said.

https://www.bnnbloomberg.ca/modi-considers-excluding-7-billion-of-air-india-debt-to-lure-buyers-1.1354086

Lebanon Bond Sell-Off Eclipses Argentina as Unrest Flares Up

Lebanese bonds have overtaken Argentine debt as the second-worst performer this year, showing the financial toll that the social uprising has taken on one of the world’s most indebted nations.

Investors in Lebanon’s dollar-denominated notes have lost 30% this year, eclipsing the 27% decline for holders of Argentine securities. Lebanese notes maturing in 2034 fell 7% on Friday, the worst for sovereign dollar bonds in emerging markets. Its 2033 is the next worst-performing among developing nations.

S&P Global Ratings downgraded Lebanon’s long-term foreign currency debt rating to CCC from B- after the market closed on Friday, following the rating company’s decision to downgrade three of the nation’s top banks the previous day.

The nation has been without a government since Saad Hariri resigned late last month in the face of mass demonstrations demanding the removal of a ruling elite blamed for corruption and mismanagement. The situation has deteriorated so much that the Lebanese army was deployed heavily across the country this week as protesters began to converge on the presidential palace.

Argentina’s overseas bonds reached new lows this week as investors await clarity on how President-elect Alberto Fernandez plans to save the nation from a looming default and dwindling reserves. Venezuelan debt has lost investors 55% this, the world’s worst performance.

https://www.bnnbloomberg.ca/lebanon-bond-sell-off-eclipses-argentina-as-unrest-flares-up-1.1348934

U.S. Retail Sales Exceed Estimates, With Some Signs of Cooling

 U.S. retail sales rose more than estimated in October on gains from auto dealers and gas stations, though declines in categories including clothing and furniture stores tempered the advance.

The value of overall sales increased 0.3% after an unrevised 0.3% drop the prior month, Commerce Department figures showed Friday. The median estimate in a Bloomberg survey called for a 0.2% advance.

Sales in the “control group” subset, which some analysts view as a more reliable gauge of underlying consumer demand, increased 0.3% as projected. The measure excludes food services, car dealers, building-materials stores and gasoline stations.

The reading signals consumers remain willing to spend, though at a slower pace than earlier this year, as the robust jobs market and solid wage gains offer reasons for Americans to remain upbeat. Consumers have driven the economy forward in recent quarters, and Friday’s data suggest the trend may continue in the fourth quarter.

Federal Reserve Chairman Jerome Powell reiterated this week that the labor market is strong, following an October jobs report that showed payroll gains intact and the jobless rate still near a half-century low. Solid employment would continue to underpin consumer spending.

Mixed Signals

The report also included some signs that may point to consumers running out of steam, with seven of 13 major categories dropping. Sales at furniture and home furnishing stores fell 0.9% while food service and drinking places decreased 0.3%, both posting the steepest declines of this year.

Control-group sales have increased an annualized 4% over the latest three months compared with a 6.3% rate in the same period through September.

Nonstore retailers, which include online shopping, were a bright spot. They posted a 0.9% gain from the prior month and were up 14.3% from a year earlier, the most of any major group.

Filling-station receipts increased 1.1%, the report showed. The retail figures aren’t adjusted for price changes, so sales could reflect changes in gasoline costs, sales, or both.

Auto Dealers

Spending at automobile dealers climbed 0.5% after decreasing 1.3% in the previous month. That contrasted with industry data from Wards Automotive Group that previously showed auto sales slumped to six-month low in October.

Excluding automobiles and gasoline, retail sales edged up 0.1% after a decline the previous month.

Retail sales estimates in Bloomberg’s survey of economists ranged from a 0.2% decline to a 0.7% gain from the prior month.

The sales data capture don’t capture all of household purchases and tend to be volatile because they’re not adjusted for changes in prices. Personal-spending figures will offer a fuller picture of U.S. consumption in data due at the end of the month.

A separate Labor Department report Friday showed the U.S. import price index fell 0.5% in October from the prior month and 3% from a year earlier, the most in three years. Excluding petroleum, the index decreased 0.1% from the prior month.

https://www.bnnbloomberg.ca/u-s-retail-sales-exceed-estimates-with-some-signs-of-cooling-1.1348569

China Regulator Approves Plan to Overhaul Share Ownership

China’s stock regulators say they will remove a limit on the public float of mainland companies listed in Hong Kong — a change that would shake up the ownership structures of some of the nation’s biggest firms.

The China Securities Regulatory Commission said in a statement on Friday evening that qualified companies listed or planning an initial public offering in the city can apply for “full circulation” of their shares. The change requires regulatory approval, it added.

Chinese regulators have been preparing to expand a pilot allowing mainland firms listed in the former British colony to convert their non-tradeable shares to H-shares and trade them on the city’s stock exchange. The program has been seen as a key step for state investors to reduce their control or even exit some industries.

“Full-circulation is relatively a good thing for investors as it could improve liquidity for these stocks,” said Steven Leung, executive director at Uob Kay Hian (Hong Kong) Ltd. “However, if there is sharp increase in tradeable shares, it would raise investor concern over the impact on the market.”

The CSRC said in its Friday statement that it successfully conducted a pilot involving three companies in 2018.

Some of China’s biggest and most-high profile firms trade in Hong Kong, including its big four banks, oil giants and insurers.

https://www.bnnbloomberg.ca/china-regulator-approves-plan-to-overhaul-share-ownership-1.1348511

World’s Biggest Wealth Fund Drops G4S on Qatar Worker Abuses

Norway’s sovereign-wealth fund has dropped U.K. security firm G4S Plc from its portfolio, citing abuses of migrant-worker rights in Qatar and the United Arab Emirates.

The central bank in Oslo, which manages the $1.1 trillion fund, said it took the step “due to unacceptable risk that the company contributes to or is responsible for serious or systematic human rights violations,” according to a statement on Thursday.

Shares in G4S dropped as much as 3.7% in London trading. The fund held a 2.33% stake in G4S at the end of 2018, valued at the time at about $91 million. The investor currently has 156 companies on its exclusion list.

The decision to exclude G4S follows a recommendation from Norway’s Council of Ethics, which said it had assessed the company’s operations in the two Gulf countries. The investigation showed that migrant workers have paid recruitment fees to be able to work for G4S, that a substantial part of their salaries went to pay debt related to those fees, and that many were paid less than agreed. In the Emirates, workers saw their passports confiscated, the Council said.

The probe also revealed that workers were exposed to long days, a lack of compensation for working overtime and instances of harassment, the Council said.

Norway’s wealth fund, the world’s biggest of its kind, is managed according to a set of ethical principles. It’s barred from investing in tobacco and certain kinds of weapons, and in companies responsible for serious environmental damage or human rights abuses.

See list of excluded companies

https://www.bnnbloomberg.ca/world-s-biggest-wealth-fund-drops-g4s-on-qatar-worker-abuses-1.1347829

Japan Post Pledges Caution as CLO Holdings Hit $14 Billion

Japan Post Bank Co. said it would be cautious about future investment in bundled corporate loans after raising holdings last quarter, as financial authorities increase scrutiny of the practice.

The postal savings giant boosted its holdings of collateralized loan obligations by 15% from June to 1.52 trillion yen ($14 billion) as of Sept. 30, an earnings presentation showed Thursday.

“We are acting very carefully and analyzing a range of issues as authorities show interest” in Japanese investments in overseas CLOs, Hiroichi Shishimi, a senior executive, said at a briefing.

With about $1.7 trillion of household savings, Japan Post Bank has been buying CLOs and other foreign assets in search of returns that domestic government bonds no longer provide. The Bank of Japan signaled concern last month that CLO prices “could fall substantially” if economic and market conditions worsen, while adding that the risk of defaults in top-rated tranches is “basically small.”

Shishimi said the bank examines factors including the reputation of CLO managers and the quality of individual loans included in the vehicles. It conducts strict stress tests to make sure that the amount of CLOs owned at any given time is manageable and won’t undermine its financial strength, he said.

The structure of CLOs, particularly top-rated slices, has improved sharply since the global financial crisis, according to Shishimi. Japan Post Bank has been purchasing AAA rated segments partly because they provide higher yields than regular corporate bonds, he said.

Read more about Japan’s unlikely global bond powerhouse

Another way Japan Post has accumulated exposure to U.S. leveraged loans is through investment funds that buy the debt. The company plans to pare its allocation to such funds and increase its CLO investments because the latter offer a cushion against losses in a downturn, a person with knowledge of the matter said last month.

Norinchukin Bank, the Japanese agricultural lender that holds more CLOs than any other local bank, pared its holdings last quarter after becoming more selective about purchasing the credit products, people with knowledge of the matter said this week.

https://www.bnnbloomberg.ca/japan-post-pledges-caution-as-clo-holdings-hit-14-billion-1.1347818

Zimbabwe Distributes New Banknotes but Keeps Curb on Withdrawals

Zimbabwean banks started distributing low-denominated banknotes on Tuesday to help end a crippling cash shortage, more than a decade since the nation had its own hard currency.

However, strict withdrawal limits of Z$300 ($19) a week meant consumers continued to struggle to get enough cash to cover costs.

The central bank sent Z$30 million of the new notes to local banks, the state-controlled Herald newspaper cited Reserve Bank of Zimbabwe Governor John Mangudya as saying. Lenders were issuing newly minted Z$2 and Z$5 notes and coins.

“The only consolation is that today I got my money, but the problem is that it’s not enough to last the whole week since I use public transport,” said Ishe Mukoi, a store supervisor in the capital, Harare.

Zimbabwe this year abolished a multi-currency system and reintroduced the Zimbabwe dollar as sole legal tender, a decade after it went out of circulation because of hyperinflation. It has weakened from a 1:1 parity peg in February to 15.8742 per U.S. dollar on Tuesday.

The central bank plans to “drip feed” Z$1 billion into the economy over the next six months to help end arbitrage and premiums being charged on the parallel market.

https://www.bnnbloomberg.ca/zimbabwe-distributes-new-banknotes-but-keeps-curb-on-withdrawals-1.1346619

Juul to cut 650 jobs, slash expenses as it scales back marketing

Juul Labs Inc. will eliminate 650 jobs and freeze hiring, part of a plan to cut US$1 billion in costs as it pulls back on marketing and tries to get its vaping device cleared for sale by U.S. health regulators.

The San Francisco-based e-cigarette company has become a target of government regulators attempting to stem an epidemic of new, young nicotine users who have flocked to the sleek device despite in many cases never having used cigarettes.

Juul, facing an existential threat to its business, has responded by changing CEOs, limiting its marketing and lobbying, and stopping sales of flavours like mint and mango that are most popular with youth.

Juul plans to cut US$1 billion in costs next year, according to a statement from the company on Tuesday. That includes 650 jobs, or 15 per cent of its workforce. It’s also pausing hiring after bringing on about 300 people a month on average in 2019. Employees will get separation packages, according to the company.

Along with the job cuts, Juul has already stopped its broadcast, print and digital ads and says it’s focused on marketing to current adult smokers.

“As the vapor category undergoes a necessary reset, this reorganization will help Juul Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earnings a license to operate in the U.S. and around the world,” said Chief Executive Officer K.C. Crosthwaite, in the statement.

News of the cost cuts was reported earlier by Axios.

As Juul reboots, federal regulators are weighing curbs on flavored e-cigarette products. On Monday, President Donald Trump said that he had invited industry groups and medical professionals to a meeting at the White House to talk about ways to reduce underage vaping while preserving jobs in the growing business.

In September, Health and Human Services Secretary Alex Azar had indicated that all flavors except tobacco could be temporarily removed from the market. But in recent weeks, there have been signs that any new federal restrictions won’t be that stringent. Last week, Juul said it would stop selling mint-flavored nicotine products in the U.S.

Juul said it will add resources to its product team and try and find ways of reducing youth use. The company declined to say what its total expenses were expected to be in 2019.

https://www.bnnbloomberg.ca/juul-to-cut-650-jobs-slash-expenses-as-it-scales-back-marketing-1.1346608