– Reuters reported that a growing number of large US companies have said they will cover travel costs for employees who must leave their home states to access abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, according to legal experts.
Amazon.com, Apple, Lyft, Microsoft and JPMorgan Chase & Co were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of the US Supreme Court decision overturning the landmark Roe vs Wade ruling that had legalized abortion nationwide.
Within an hour of the decision being released, Conde Nast CEO Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court’s ruling ‘a crushing blow to reproductive rights.’ Walt Disney Co unveiled a similar policy, telling employees that it recognizes the impact of the abortion ruling but remains committed to providing comprehensive access to quality healthcare, according to a spokesperson.
Companies will have to navigate a patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions.
– The Wall Street Journal (paywall) reported that EY agreed to pay a record $100 mn fine and to admit that some of its auditors cheated on required ethics exams in recent years, according to an SEC settlement order. The SEC said the penalty is the largest fine ever imposed on an audit firm and stemmed partly from EY’s failure to report the issue to regulators who had asked the firm about such misbehavior.
‘It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams, of all things,’ said SEC enforcement director Gurbir Grewal. ‘And it’s equally shocking that [EY] hindered our investigation of this misconduct.’
EY said ‘nothing [at the firm] is more important than our integrity and our ethics.’ It said the firm doesn’t tolerate cheating on exams, adding that its ‘response to this unacceptable past behavior has been thorough, extensive and effective.’
– According to Reuters, Toshiba Corp shareholders voted in two board directors from activist hedge fund investors, a step expected to add momentum to the company’s exploration of potential buyout deals. Toshiba’s AGM elected Nabeel Bhanji, a senior portfolio manager at Elliott Management, and Eijiro Imai, managing director at Farallon Capital Management, as new board members. Shareholders also chose Akihiro Watanabe, an executive from boutique US investment bank Houlihan Lokey, who becomes board chair.
External director Mariko Watahiki, who opposed Bhanji’s and Imai’s candidacies, tendered her resignation after the vote, concluding that in order to move forward as a united board, it would be better she step down, Toshiba said in a statement. Watahiki had argued the appointments of the two could skew the board too much toward the input of activist investors. So far only a few large Japanese companies have brought activist shareholders onto their board.
– Pinterest said long-time CEO Ben Silbermann would step down, handing over the reins to Google commerce executive Bill Ready, according to CNN. Ready has for the past two years run commerce and payment operations at Google and has held senior leadership roles at PayPal. Silbermann has been CEO for 12 years, having co-founded Pinterest in 2010. He will take up the newly created role of executive chair and keep his board seat, while Ready will also join the board, the company said.
– CNBC reported that Disney has extended CEO Bob Chapek’s contract for three years. Chapek’s contract was set to expire in February next year, three years after he took the reins from Bob Iger. The board voted unanimously to extend Chapek’s tenure to July 2025.
‘Disney was dealt a tough hand by the pandemic, yet with Bob at the helm, our businesses – from parks to streaming – not only weathered the storm but also emerged in a position of strength,’ board chair Susan Arnold said in a statement.
– The WSJ said that, according to a study commissioned by the UN-affiliated Race To Zero climate campaign, many big companies working in agriculture and other sectors that drive deforestation won’t hit their climate targets without immediate action to protect forests. The study analyzed the environmental programs of 350 companies in the forestry, land use and agriculture sectors that have a major impact on the world’s forests. It found that 148 of those companies have committed to net-zero but judged that only nine were making strong progress on curbing deforestation.
‘These companies play a huge role in the sector, which is more impactful than steel and cement,’ said Nigel Topping, who works to spur action by businesses, investors and cities as part of the UN climate process. Companies generally set net-zero targets for decades into the future. Nevertheless, Topping said, those goals could be out of reach unless companies act on deforestation urgently. Companies should commit to stopping deforestation by 2025, and lenders and investors should prioritize the issue, he said.
– The US Supreme Court imposed limits on the federal government’s authority to issue sweeping regulations to reduce carbon emissions from power plants in a ruling that will undermine President Joe Biden’s plans to tackle climate change, Reuters reported.
The ruling restricted the Environmental Protection Agency’s (EPA) authority to regulate greenhouse gas emissions from existing coal and gas-fired power plants under the landmark Clean Air Act anti-pollution law. Biden’s administration is working on new regulations. The ruling is likely to have implications beyond the EPA as it raises new legal questions about any big decisions made by federal agencies. The court’s conservative majority has signaled its skepticism toward expansive federal regulatory authority.
– CNBC reported that Spirit Airlines delayed a shareholder vote on its proposed merger with Frontier Airlines until July 8, hours before a scheduled meeting, so that it can further discuss options with Frontier and rival suitor JetBlue Airways. Spirit originally scheduled Thursday’s vote for June 10 but delayed that for the same reasons. Both Frontier and JetBlue had upped their offers in the week before the scheduled vote approached.
‘We compliment the Spirit board for listening to [its] shareholders, [which] clearly were not supportive of the Frontier transaction, and adjourning the special meeting,’ said JetBlue CEO Robin Hayes in a statement. Spirit didn’t comment on whether that is the case.
Frontier didn’t comment immediately on the postponed vote.
– According to the WSJ, while governments grapple with shortages of food and fuel caused by the war in Ukraine and are less focused on climate change, companies and investors are taking a bigger role in trying to limit rising temperatures. Despite the lack of progress by governments, businesses have continued to invest in green energy, often spurred on by demands from customers. Climate and sustainability start-ups have raised more than $20 bn in the first half of the year. Sales of green bonds are also up compared with 2019 and 2020 levels, according to Dealogic.
Shareholders have voted on roughly 275 sustainability-related proposals this year at AGMs, a record total that is up more than 40 percent from last year, according to the non-profit Sustainable Investments Institute.
– Mark Uyeda was sworn into office as a member of the SEC. Uyeda was nominated by President Biden earlier this year and confirmed by the US Senate on June 16. Uyeda has worked at the agency since 2006, including as senior adviser to chair Jay Clayton, senior adviser to acting chair Michael Piwowar, counsel to commissioner Paul Atkins and various positions in the division of investment management. He most recently served on detail from the SEC to the Senate Committee on Banking, Housing and Urban Affairs as a securities counsel to the committee’s minority staff.