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Where are the Black CEOs?



Where are the Black CEOs?

This is the first question I attempted to answer when I established the race beat at Fortune exactly five years ago this month. At the time, there had been fifteen Black CEOs in the history of the Fortune 500, with five still on the job. 

Today, as we wade into the grim truth-telling that is Black History Month, we are facing the same question. 

“In the history of the Fortune 500 list, first published in 1955, there have been only 19 Black CEOs out of 1,800 chiefs,” says my colleague Phil Wahba in this must-read-and-share piece. And, as anyone who has been paying attention has repeatedly noted, nobody is coming. “More worrisome, observers and executives agree, is that there is no quick fix, given the years it takes to groom someone for the C-suite,” Phil writes. “A major source of the problem is that too few Black businesspeople are put on a management track early in their career, in which a promising executive is given oversight of a business with its own profit and loss (P&L) benchmarks, the measures by which superiors and the board assess whether someone is CEO material.”

With the thrilling news that Roz Brewer, currently Starbucks Chief Operating Officer, has been tapped to become Walgreen’s next CEO, she is now one of 40 women running a Fortune 500 company—and currently, the only Black one. With TIAA CEO Roger Ferguson Jr. stepping down at the end of March, that brings the total number of Black Fortune 500 CEOs to four: Brewer, Ken Frazier at Merck, Marvin Ellison at Lowe’s and René Jones at M&T Bank. 

Oh, hang on… breaking news… Merck CEO Ken Frazier just announced that he will be stepping down at the end of June.

Sorry, folks. We’re back to three. 

A short time after she left her role as Xerox CEO, I interviewed Ursula Burns for The Black Ceiling, an inside look at the many reasons Black executive women are not making it to the C-Suite. It was a similarly dispiriting moment. She had been the first Black woman ever to run a Fortune 500 company. When she left in 2017, there were none. (Mary Winston became the second, after she briefly led Bed Bath & Beyond as interim CEO in 2019.)

She was unflinching in her assessment of the problem.

Black women tend to get shunted away from positions of real impact and end up in career cul-de-sacs that eliminate them from consideration. “HR isn’t going to get you there,” she says.  “Communications and the arts aren’t going to get you there. So, now look at the numbers of women we have now. Unless you’re bringing people in from Mars, it’s going to be a while.” 

Sensing a pattern?

Burns, in an episode last fall of our Leadership Next podcast (Apple/Spotify), told Fortune CEO Alan Murray and me about her quest to advocate for top down change via her Board Diversity Action Alliance, a no-nonsense plan to diversify corporate boards to better address the utter lack of progress in corporate diversity. 

Turns out, the pattern is a huge part of the problem: Everyone’s ideal short list for Black board talent is ridiculously out of touch. Board chairs routinely ask her for a list of Black folks who have already run a Fortune 500 company or similar. “That’s like a list of 25 people,” Burns says, which utterly ignores the remarkable talent that exists in a wide variety of positions and industries. “I promise you, white people are not held to that same standard.”

Lowe’s CEO Marvin Ellison, formerly of J.C. Penney, appears on that short list twice. He is the only Black person to be CEO of two Fortune 500 companies, and he nearly didn’t make it the first time. “[A]t Home Depot, where he spent many years, he jumped to store management, giving him a P&L by which to measure him as he rose up,” says Wahba. “He was passed over in 2014 when Home Depot changed CEOs, and he went to Penney.”

The executive pipeline then, is thin by blind spot and design. To solve it, we have to think beyond central casting as we develop Black executive potential early and often. 

But to really change things, we should revisit the premise of my first-ever corporate diversity story, and all the ones that came after: The path to the C-Suite starts from birth.  

It takes 22 years to grow an entry level employee, and a lot goes wrong for people along the way. Right now, a future CEO—or doctor, engineer, filmmaker, Nobel Prize winner, journalist, supply chain genius, or fill-in-the-blank—is about to be lost in a human pipeline that has been invisibly leaking for generations. The reasons are many and related. Inadequate housing and education. An unsafe neighborhood and lack of fresh food. Under-resourced parents with no access to credit markets in dead-end, soon-to-be-replaced-by-automation jobs. An unresponsive health care system. The criminal justice “system.” Not to mention the constant low-level exhaustion of living in a country that wants to wave away white supremacist norms like so many gnats from an errant puddle.

Black CEOs are all around us, if we would let them grow. 

Ellen McGirt


Coinbase’s near-term outlook is ‘still grim’, JPMorgan says, while BofA is more positive about firm’s ability to face crypto winter



Coinbase's near-term outlook is 'still grim', JPMorgan says, while BofA is more positive about firm's ability to face crypto winter

Coinbase is well positioned to successfully navigate this crypto winter and take market share, Bank of America said in a research report Tuesday. It maintained its buy recommendation following the exchange’s second-quarter results.

The results warrant “a muted stock reaction,” the report said. Net revenue of $803 million was below the bank’s and consensus estimates, while its adjusted $151 million loss before interest, tax, depreciation and amortization was better than the street expected. Importantly, the company remains “cautiously optimistic” it can reach its goal of no more than $500 million of adjusted EBITDA loss for the full year, the report added.

Coinbase shares fell almost 8% in premarket trading to $80.74.

Bank of America notes that Coinbase had no counterparty exposure to the crypto insolvencies witnessed in the second quarter. The company also has a “history of no credit losses from financing activities, holds customer assets 1:1, and any lending activity of customer crypto is at the discretion of the customer, with 100%+ collateral required.” These rigorous risk-management practices will be a “positive long-term differentiator” for the stock, the bank said.

JPMorgan said Coinbase had endured another challenging quarter, while noting some positives.

Trading volume and revenue were down materially. Subscription revenue was also lower, but would have been much worse were it not for higher interest rates, it said in a research report Wednesday.

The company is taking steps on expense management, and in addition to the June headcount reductions, is scaling back marketing and pausing some product investments, the note said.

The bank says the company’s near-term outlook is “still grim,” noting that the exchange expects a continued decline in 3Q 2022 monthly transacting users (MTUs) and trading volumes, but says Coinbase could take more “cost actions” if crypto prices fall further.

JPMorgan is less optimistic than Bank of America about the company in the near term, saying pressure on revenue from falling crypto markets will have a negative impact on the stock price. Still, it sees positives including higher interest rates, from which the firm will generate revenue. It also sees opportunities for the exchange to grow its user base, leveraging almost $6 billion of cash. The surge in crypto prices in July, and the forthcoming Ethereum Merge are also seen as positive catalysts, it added.

The bank maintained its neutral rating on the stock and raised its price target to $64 from $61.

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Elon Musk sold $6.9B in Tesla stock in case he’s forced to buy Twitter



Elon Musk sold $6.9B in Tesla stock in case he's forced to buy Twitter

Elon Musk sold $6.9 billion of his shares in Tesla Inc., the billionaire’s biggest sale on record, saying he needed cash in case he is forced to go ahead with his aborted deal to buy Twitter Inc.

“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk tweeted late Tuesday after the sales were disclosed in a series of regulatory filings. 

Asked by followers if he was done selling and would buy Tesla stock again if the $44 billion deal doesn’t close, Musk responded: “Yes.”

Tesla’s chief executive officer offloaded about 7.92 million shares on Aug. 5, according to the new filings. The sale comes just four months after the world’s richest person said he had no further plans to sell Tesla shares after disposing of $8.5 billion of stock in the wake of his initial offer to buy Twitter.  

Musk last month said he was terminating the agreement to buy the social network where he has more than 102 million followers and take it private, claiming the company has made “misleading representations” over the number of spam bots on the service. Twitter has since sued to force Musk to consummate the deal, and a trial in the Delaware Chancery Court has been set for October. 

In May, Musk dropped plans to partially fund the purchase with a margin loan tied to his Tesla stake and increased the size of the equity component of the deal to $33.5 billion. He had previously announced that he secured $7.1 billion of equity commitments from investors including billionaire Larry Ellison, Sequoia Capital, and Binance. 

“I’ll put the odds at 75% that he’s buying Twitter. I’m shocked,” said Gene Munster, a former technology analyst who’s now a managing partner at venture-capital firm Loup Ventures. “This is going to be a headwind for Tesla in the near term. In the long term, all that matters is deliveries and gross margin.”

At the weekend, Musk tweeted that if Twitter provided its method of sampling accounts to determine the number of bots and how they are confirmed to be real, “the deal should proceed on original terms.” 

Musk, 51, has now sold around $32 billion worth of stock in Tesla over the past 10 months. The disposals started in November after Musk, a prolific Twitter user, polled users of the platform on whether he should trim his stake. The purpose of the latest sales wasn’t immediately clear.  

Tesla shares have risen about 35% from recent lows reached in May, though are still down about 20% this year. 

With a $250.2 billion fortune, Musk is the world’s richest person, according to the Bloomberg Billionaires Index, but his wealth has fallen around $20 billion this year as Tesla shares declined.    

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The rent is too d*mn high for Gen Z: Younger generations are ‘squeezed the most’ by higher rents, BofA says



The rent is too d*mn high for Gen Z: Younger generations are 'squeezed the most' by higher rents, BofA says

Most of Gen Z is too young to remember the 2010 New York gubernatorial candidate Jimmy McMillan.

But over a decade later, they would probably agree with his signature issue (and catchphrase): the rent is too damn high.

This July, median rent payments were 7.4% higher than during the same period last year, according to a Bank of America report released Tuesday. 

The national median price for a one-bedroom apartment has been hitting new highs nearly every month this summer. It was $1,450 for July, according to rental platform Zumper. In the country’s largest city, New York, average rent exceeded a shocking $5,000 a month for the first time ever in June. 

But inflation in the rental market hasn’t hit each generation equally, and no one is getting squeezed harder by the higher monthly payments as Gen Z. Those born after 1996 have seen their median rent payment go up 16% since last July, compared to just a 3% increase for Baby Boomers, BofA internal data shows. 
“Younger consumers are getting squeezed the most by higher rent inflation,” BofA wrote.

The great rent comeback

Early in the pandemic, landlords slashed rents and gave significant COVID discounts to entice tenants to stay instead of leaving urban areas. Once those deals started expiring in 2021, many landlords suddenly raised payments once again, sometimes asking for over double their pandemic value. 

Young people across the board have been hit hard, and rent burdens compared to age can be seen even within a single generation. Younger millennials had their median rent payment grow 11% from last year, while the median payment for older millennials rose 7%. Gen X experienced a 5% median rent increase, according to BofA. 

It’s not a surprise, then, that Gen Z feels so strapped for cash. The majority of young people, 61%, said they want to receive their wages daily instead of twice a week, a practice typically reserved for workers living paycheck to paycheck, according to a report from the Center for Generational Kinetics, which specializes in research across the generations. Rising rent inflation has even priced nearly a third of Gen Zers out of the apartment search altogether. Around 29% of them have resorted to living at home as a “long-term housing solution,” according to a June survey from personal finance company Credit Karma.

It’s no wonder—the rent really is too high.

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