Jun 21, 2019

Axios AM

By Mike Allen
Mike Allen

😎 Happy Friday! Today's Axios AM: 1,184 words ... < 5 minutes!

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1 big thing: Wall Street plays nice with shareholder activists

Illustration: Aïda Amer/Axios

With investors of all sizes pressing their agendas on corporations, top executives have started negotiating upfront, aiming to reduce the number of loud confrontations and proxy battles, Axios markets reporter Courtenay Brown writes.

  • American-style activism has caught on abroad and is rising in countries like the U.K. and Japan.
  • But in the U.S., where investors first started building up stakes in companies and picking high-profile fights, the number of public showdowns is way down this year, despite some splashy exceptions.

Not since 2015 have so few U.S. companies faced public demands from activists during spring’s big proxy season, which runs through the end of June, according to research firm Activist Insight.

  • Activism outside the U.S., meanwhile, is spiking. The U.K. had its busiest first quarter in recent years while Japanese companies saw a record 30 campaigns last year, per CNBC.

Between the lines: American companies have grown more experienced and sophisticated at managing shareholder activism, aided by armies of lawyers, consultants and bankers who have built up specialized practices in this field.

  • Behind-the-scenes negotiations have led to fewer environmental, social and governance proposals making it onto ballots for shareholder meetings.
  • "Companies are more willing to discuss, more willing to listen, and it de-escalates the situation," Jason Day, a partner at the law firm Perkins Coie who advises public companies on stockholder activism, tells Axios.
2. 🇮🇷 Trump pulls back Iran strike: "Planes were in the air"
An RQ-4 Global Hawk, like the one Iran shot down. Photo: Airman 1st Class D. Blake Browning/U.S. Air Force via AP

"President Trump approved military strikes against Iran in retaliation for downing an American surveillance drone, but pulled back from launching them" last night the N.Y. Times reports.

  • Officials in D.C. were still expecting a strike — targeting "a handful of Iranian targets, like radar and missile batteries" — as late as 7 p.m.
  • "Planes were in the air and ships were in position, but no missiles had been fired when word came to stand down."

Between the lines: "It was not clear whether [he] simply changed his mind on the strikes or whether the administration altered course because of logistics or strategy."

3. Exclusive data: Trump deports fewer than Obama

Data obtained by Axios shows the U.S. has deported more immigrants this year than any of the Trump presidency, but has yet to reach President Obama's early deportation levels, Axios' Stef Kight and Alayna Treene report.

  • By the numbers: Under Obama, total Immigration and Customs Enforcement deportations were above 385,000 each year in fiscal years 2009 through 2011, and hit a high of 409,849 in 2012. The numbers dropped below 250,000 in 2015 and 2016. (The government's fiscal year ends Sept. 30.)
  • Under Trump, deportations fell to 226,119 in 2017, ticked up to 250,000+ in 2018, and hit a Trump high of 282,242 this fiscal year (as of June).

ICE and DHS didn't respond to a request for comment.

4. Pic du jour
Photo: Carolina Cabral/Getty Images

Venezuela's central bank introduces banknotes of 10,000, 20,000 and 50,000 bolivars (equivalent to $8) to cope with rampaging inflation.

5. Overnight delivery's environmental footprint

Illustration: Sarah Grillo/Axios

Flying, trucking and delivering millions of packages a day comes with a cost. As shoppers demand faster and faster speed, there could be a sharp environmental impact, Axios' Erica Pandey writes:

  • The annual sustainability report from UPS, one of the biggest enablers of the e-commerce boom, says it emitted 13.8 million metric tons of CO2 while delivering 5.1 billion packages in 2017, by ground and air.
  • Emissions from FedEx, the other major shipper, were 15.1 million metric tons in 2017.
  • The Postal Service emitted about 4.3 million metric tons of CO2 in 2016.

In theory, e-commerce is good for the environment, says Don Mackenzie, who leads the University of Washington's Sustainable Transportation Lab. Instead of a whole neighborhood driving to stores to shop, one truck makes lots of stops.

  • "There are climate benefits to e-commerce, but those disappear as delivery gets faster and faster," says Miguel Jaller, a professor at UC Davis. "It goes against everything they have been achieving in terms of efficiency."

Memberships that offer free, fast shipping, regardless of the size of a cart, have eliminated shoppers' incentive to bundle their orders.

  • E-commerce companies are building more and more warehouses so they can cut delivery times to a few hours.
  • And the packing material that goes into delivery boxes is a major driver of the global plastics crisis, says Axios energy columnist Amy Harder.

In a statement to Axios, Amazon said:

  • "We’ve eliminated more than 244,000 tons of packaging materials and avoided 500 million shipping boxes, and with anticipated and continued progress in electric vehicles, aviation bio fuels, and renewable energy we [want] to reach 50% of all Amazon shipments with net zero carbon by 2030."
6. Trump fumes at TIME after showing new Kim Jong-un letter

President Trump vented at TIME magazine during a Monday interview in the Oval Office (hat tip: CNN's Brian Stelter).

Trump had gone off the record to show the reporters a "letter ... written by Kim Jong-un ... delivered to me yesterday." And then this happened:

  • Trump: "Excuse me — Under Section II — Well, you can go to prison instead, because, if you use, if you use the photograph you took of the letter that I gave you ... I didn’t give it to you to take photographs of it — So don’t play that game with me."
  • TIME: "I’m sorry, Mr. President. Were you threatening me with prison time?"

Trump: "I told you you can look at this off the record. That doesn’t mean you take out your camera and start taking pictures of it. OK? So I hope you don’t have a picture of it. I know you were very quick to pull it out — even you were surprised to see that. You can’t do that stuff."

  • "So go have fun with your story. Because I’m sure it will be the 28th horrible story I have in TIME Magazine because I never — I mean — ha. It’s incredible. With all I’ve done and the success I’ve had, the way that TIME Magazine writes is absolutely incredible."
  • "With all I’ve done, with the tremendous success I’ve had, that TIME Magazine writes about me the way they write is a disgrace, OK? Let’s face it, it’s a disgrace. And some day within the next 20 years, maybe you’ll pick me as Man of the Year. OK, big deal."
7. Stat of the day
Hope Hicks leaves after her closed-door interview. Photo: J. Scott Applewhite/AP

Hope Hicks was blocked by President Trump's lawyers from answering questions more than 150 times during a combative interview with the House Judiciary Committee yesterday, according to a 273-page transcript released by Democrats. (AP)

  • She said she has spoken to Trump five to 10 times since leaving the White House at the end of March 2018.

Read the transcript.

8. Local scams pop on Google

"Millions of Business Listings on Google Maps Are Fake — and Google Profits," write the Wall Street Journal's Rob Copeland and Katherine Bindley (subscription):

  • The fake listings can be from businesses that want it to seem like they have a branch near you, or from con artists.
9. America's future will be written in the two mega-states
Courtesy The Economist

The Economist points to these dueling visions for America:

  • Texas offers "a low-tax, low-regulation place in which government makes little provision for its citizens."
  • California provides "a high-tax, highly regulated one in which it is the government’s role to tackle problems, such as climate change, that might ordinarily be considered the job of the federal government."
10. 1 food thing
Courtesy KFC

KFC is offering a Cheetos Sandwich nationwide for the month of July:

  • The sandwich is a twist on the KFC Crispy Colonel sandwich, made by coating a chicken filet with Cheetos sauce, and placing it on a toasted bun with the Colonel’s mayo and a "pinch of the thumb, index and middle fingers" layer of Cheetos, according to a press release.
Mike Allen