Bloomberg Opinion

Tesla CEO Elon Musk’s recent $29 billion stock award is staggering — not just for its size, which exceeds the GDP of over 70 countries, but because it epitomizes a troubling trend: boards granting enormous equity to CEOs who already own a vast amount of stock in the company. The logic behind these mega awards is supposedly to incentivize performance. But on closer examination, this rationale falls apart. CEOs like Musk already own stakes worth hundreds of billions. Doubling company value doubles their wealth. If billions more are needed to motivate them, the entire premise of incentive compensation collapses. Similar mega grants have been awarded to other executives — from Figma’s Dylan Field to Broadcom’s Hock Tan and Warner Bros. Discovery’s David Zaslav — many of whom were already multi-billionaires. These packages often serve more as status symbols within CEO peer groups than as genuine motivators. Beyond the wasteful excess, these awards encourage the wrong behavior. Research shows that narcissistic CEOs, who often seek self-aggrandizement, lead companies into greater performance volatility and risk. Boards should be wary of enabling such traits. What can boards do? First, remember their primary responsibility is to shareholders, not the CEO. They must exercise firm judgment and say no to unreasonable compensation demands. More importantly, they should seek leaders who are passionate about their work — not just their wealth. Legendary CEO Alan Mulally, who signed his letters with a sketch of a smiling jumbo jet, exemplifies this ideal. His love for engineering and products drove his success more than money ever could. Boards have the chance to identify such leaders, especially from within their ranks. They should seize it. Mega CEO pay packages may dazzle headlines, but they risk blinding us to the deeper truth: great leadership demands commitment to purpose, not just profit. Read the full article on Bloomberg Opinion: https://lnkd.in/eU-ibJWF

From Gucci to Rolex, luxury brands are losing their power. Mentions of expensive labels in songs have sunk, underlining the sector’s bust. Can it reassert itself in pop culture once more? Andrea Felsted and Carolyn Silverman tracked the rise and fall through song lyrics. Read the feature: https://lnkd.in/edAAc9KD

"You know my style and I love Christian Dior." If you've heard these lyrics at a bar or club recently, you are not alone. Its the song of the summer -- and very good news for Bernard Arnault, whose LVMH is trying to revive Christian Dior. That's because we analyzed mentions of luxury brands in songs, and found that a rise in name-checks correlated with luxury's boom years, roughly between late 2020 and early 2023. Since then, mentions have slumped -- so have big luxury's fortunes. Brand stories are even more fascinating. Take Gucci. Its mentions took off in 2016 after creative director Alessandro Michele's bold logos and clashing prints began to filter into fashion. Since he left in late 2022 the Kering-owned house has struggled -- and its mentions have languished. Prada is also notable. Although it hasn't featured as prominently in hip hop as some other brands, its mentions increased in pop and dance in 2021 and 2022 -- just when it was enjoying a revival. Watches are also telling. Think iced-out bling and Rolex comes to mind. Yet its mentions peaked in 2014. At around this time, inclusions of two other even pricier and more exclusive timepieces Audemars Piguet and Patek Philippe started to surge. Cartier isn't mentioned as frequently as other watch brands, but its name checks have remained steady -- at least until this year. That has parallels with the popularity of Cartier watches. Tyler, the Creator is a fan, and the big Taylor Swift news this week wasn't her new album, but the gold and diamond Cartier Panthere she wore to announce it. Should companies and their investors be taking all this seriously? Yes. Dior has a new designer Jonathan Anderson who is unveiling his creative vision. Arnault is an accomplished pianist, but it is Dior the party anthem that should be music to his ears. Bloomberg Opinion #Dior, #Rolex, #Gucci, #audemarspiguet, #patekphilippe, #taylorswift https://lnkd.in/e8Gvd-B7

Can an environmentalist leader of 1.4 billion Catholics counter the environmental vandalism of the leader of 340 million Americans? My quick video for Bloomberg Opinion And a gift link to my less-quick column: https://lnkd.in/eeY-WyHW

When Pope Francis died, it wasn't clear his successor would take up his environmentalist mantle. In just a few short months, Pope Leo is already well on his way to being the climate champion the world needs now. Gift link to my column for Bloomberg Opinion https://lnkd.in/dtCVw5ZC

Serious bid or seriously mischievous? Most people seem to agree -- Perplexity's $34.5 billion longshot effort to buy Google Chrome is very unlikely to succeed (even though, as I argue in the column, it would actually be a fantastic idea for the AI company). But it does a good job of skewering a key Google defense, which is that Chrome would wither and die if not under its ownership. That might make Perplexity's cheeky offer quite powerful indeed. Today's Bloomberg Opinion column... gifted for my Linkedin followers: https://lnkd.in/e-BHTSmu

When Donald Trump went after Panama over the Panama Canal, it looked like a classic thwacking with America's big stick, wielded by the US Bully-in-Chief. But when JP Spinetto went to Panama for a look-see, he discovered something of a silver lining. To wit: "Trump’s unexpected pledge to reclaim the iconic waterway for the US, mentioning Panama six times during his address to Congress in March, sent shockwaves through this nation of 4.5 million, a longtime American ally and a vital hub of global trade. But almost seven months into Trump 2.0, a different picture is emerging: The attention from competing superpowers, as uncomfortable as it may be, could prove to be a blessing. In fact, the picture that emerged from my discussions with more than a dozen Panama-watchers, policymakers and business leaders during a recent trip was clear and compelling: If Panama can seize the moment, it has the chance to reinforce the canal’s strategic role, attract fresh foreign investment and overhaul its increasingly creaky economic model." Come for the piece, stay for the video!

My takeaways from a fascinating visit to the Panama Canal, for Bloomberg Opinion video & full column here: https://lnkd.in/drtkb8wx

Panama has become an unlikely focal point in the growing rivalry between the US and China, ever since President Trump last year targeted its most revered national symbol: the Panama Canal. Trump’s unexpected pledge to reclaim the iconic waterway for the US sent shockwaves through this nation of 4.5 million, a longtime American ally and a vital hub of global trade. But almost seven months into Trump 2.0, a different picture is emerging: The attention from competing superpowers, as uncomfortable as it may be, could prove to be a blessing. JP Spinetto traveled to the crucial waterway to see what’s at stake for Panama — and global trade. Read the feature: https://lnkd.in/e5gMjuny

If Trump wants to emerge from Friday’s Alaska talks a master negotiator rather than a pushover, his smartest move may be to postpone until better prepared, says Marc Champion. Read why European leaders are right to be nervous about the meeting with Putin: https://lnkd.in/eUYAjCdx