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Tuesday, January 24, 2023
Today’s newsletter is from Julie Hyman, anchor and correspondent at Yahoo Finance. Follow Julia on Twitter @Juleshyman. Read this and more market news on the go with the Yahoo Finance app.
One of the regular accusations leveled against participants at the World Economic Forum in Davos is that they talk a big game about climate change… and then fly private jets to Zurich.
The WEF has said it offsets all of that travel by buying carbon credits. Some CEOs have responded with commercial flights that have a lower carbon footprint.
But the executives and world leaders we spoke to last week seemed increasingly aware of how they are perceived outside of their bubble in the Swiss Alps, and are making some attempts to address those perceptions.
However, as my colleague Brian Sozzi wrote in yesterday’s Morning Brief, attendees at the World Economic Forum did not pay much attention to Elon Musk Musk fired again at the annual meeting.
Ignoring the antagonistic billionaire, however, does not mean the Davos proceedings have not taken on a new air of confidence about this annual gathering of the global elite.
“People are very aware of that now and are becoming more so,” said Doug Peterson, CEO of S&P Global, in Davos. Peterson said he flies commercially for international travel. The Yahoo Finance team shared a commercial flight with another top US CEO this weekend en route back to the US.
A view of Zurich Kloten Airport as the private and VIP planes arrive for participants at the World Economic Forum (WEF) annual meeting held in Davos, in Zurich, Switzerland, on January 17, 2023. (Photo by Michele Crameri/Anadolu Agency via Getty Images)
But it’s not just internet trolls or climate activists like Greta Thunberg whose voices have risen to the heights where CEOs live. Executives told Yahoo Finance they hear from their home communities and employees that they expect companies to be good partners.
“We live in a world today where our employees want to know us as people,” said Cisco CEO Chuck Robbins. “Our employees really care about culture. You care about your purpose. If you look at some of the latest surveys, employees will tell you that salary is no longer number one.”
The story goes on
Technology executives in particular are aware of the optic of throwing lavish Davos parties while cutting back on spending at home. Cloudflare CEO Matthew Prince decided to tone it down this year, eschewing the company’s typical hot-ticket party. (Cloudflare still sponsored a popular piano bar.)
“It just didn’t seem like the right year to celebrate,” Prince said. “When we see a lot of companies laying off employees, when we see people in the tech industry really struggling, the idea of flying in a big artist and throwing a lot of money at a lavish party didn’t make sense.”
Prince appeared to cast shadows over Microsoft, which reportedly hosted Sting and 50 attendees at a party earlier in the week, before announcing the company was laying off 10,000 employees.
Salesforce also threw a party, which coveted invitations were hard to come by, and featured The Pretenders frontwoman Chrissie Hynde.
But that party was sandwiched between layoff news earlier this month and Monday’s revelation that activists Elliott Management and Jeff Ubbens Inclusive Capital had taken a stake in the software giant. Investors have also noticed the split. And maybe feel an opening.
These kinds of parties — some with ostensible themes like sustainability — aim to show that Davos is not a dark cabal gathering of global executives, political leaders and NGOs, but a chance for high-flyers to get plenty of facetime with their counterparts in concentrated time.
This year’s conference also revealed, to sometimes uncomfortable effect, that CEOs are attempting to walk a difficult line between business and philanthropy, a challenge of so-called stakeholder capitalism.
BlackRock CEO Larry Fink, who has pushed his giant money management firm further into ESG investing, has been attacked by activists on both sides for going too far and not far enough.
“The attacks are personal now,” Fink said during a panel last week.
What does all this Davos self-awareness and sensitivity mean for investors?
Probably more caution and caution on the part of companies and their executives.
With the global economy slowing — and there has been lively debate among Davos executives as to how much — expect a little more tact from Corporate America in 2023. And not just on their balance sheets, but also in managing their public image.
What to see today
business
8:30 a.m. ET: Philadelphia Fed activities outside of manufacturingJanuary (-17 in previous month, revised to -12.8)
9:45 a.m. ET: S&P Global US Manufacturing PMIJanuary Prelim (46.0 expected, 46.2 in previous month)
9:45 a.m. ET: S&P Global US Services PMIJanuary Prelim (45.3 expected, 44.7 last month)
9:45 a.m. ET: S&P Global US Composite PMIJanuary Prelim (46.4 expected, 45.0 last month)
10:00 a.m. ET: Richmond Fed Manufacturing IndexJanuary (-5 expected, 1 in previous month)
10:00 a.m. ET: Richmond Fed Terms and ConditionsJanuary (-14 in previous month)
merits
Microsoft Corporation (MSFT), 3M (MMM), Johnson&Johnson (JNJ), Hasbro (HAS), Halliburton (HAL), Lockheed Martin (LMT), Verizon Communications (VZ), Lockheed Martin (LMT), General Electric (GE), The Traveling Company (TRV), Capital One Finance (COF), Texas Instruments (TXN)
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