October 6, 2022

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Oct. 7, 2021, 10:44 a.m. ET

Oct. 7, 2021, 10:44 a.m. ET

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Shareholders of Tesla will vote on Thursday on proposals aimed at forcing the electric-car maker to be more transparent and accountable in its employee dealings, just days after a jury ordered the company to pay $137 million to a former worker who said he was subjected to racism.

The votes will take place virtually at the company’s annual shareholder meeting, where some investors are also hoping to oust two directors picked by management — James Murdoch, the former 21st Century Fox executive, and Kimbal Musk, the brother of Tesla’s chief executive, Elon Musk.

If any of these efforts are successful, it would represent a big rebuke to Tesla, the dominant maker of electric cars and a Wall Street phenomenon, and to Mr. Musk’s control over the company. Tesla is the world’s most valuable automaker by far and its shares have a devoted following among professional and individual investors.

The company is on track to sell about a million cars this year and is planning a major expansion, including by building a factory near Austin, Texas, where the meeting is being hosted, and one near Berlin. Mr. Musk said last year that he had moved to Texas, where his other company SpaceX has a site for launching rockets.

Activist shareholders have submitted five proposals to compel Tesla to disclose more information about its efforts to diversify its work force, how it handles employee disputes and its human rights record. The proposals also include calls for greater oversight over how Tesla manages employees and for requiring directors to seek re-election every year, instead of every three years.

Tesla’s board opposes all those measures and has encouraged investors to re-elect Mr. Murdoch and Kimbal Musk.

A federal jury on Monday dealt Tesla a blow by siding with Owen Diaz, a former contractor who said he faced repeated racist harassment while working at Tesla’s factory in Fremont, Calif., in 2015 and 2016. The jury ordered Tesla to pay Mr. Diaz $137 million. Tesla faces similar accusations from dozens of others in a class-action lawsuit.

Under a proposal from Calvert Research and Management, a firm that focuses on responsible investment and is owned by Morgan Stanley, Tesla would have to publish annual reports about its diversity and inclusion efforts.

Another proposal, by Nia Impact Capital, which owns fewer than 1,000 Tesla shares, would require the carmaker to publish a report on its practice of using mandatory arbitration to resolve employee disputes. That practice, Nia argued in its proposal, presents “a long-tail risk” to Tesla and can make it harder for companies to identify and address widespread discrimination.

Separately, ISS, a firm that advises investors on shareholder votes and corporate governance issues, has opposed the election of Mr. Murdoch and Kimbal Musk because it says the board hasn’t justified the compensation it pays to some of its members, including nearly $6 million last year to Robyn Denholm, who chairs the board, and more than $9 million to Hiromichi Mizuno, mainly in stock option grants.

While Mr. Murdoch received only $32,500 for serving on the board last year and Mr. Musk received $20,000, the amounts paid to the other members are much higher than is typical at similar large corporations, according to ISS. Because Mr. Murdoch and Mr. Musk are the only members up for election, they should be denied a chance to continue serving on the board, ISS said.

“Accordingly, support is not warranted for directors responsible for approving director pay,” the firm said in a note to clients last month.

Mr. Musk and Mr. Murdoch hold shares and options in the company that are worth hundreds of millions of dollars at the current share price, according to Tesla’s most recent proxy filing with the Securities and Exchange Commission.

Tesla’s board said the pair should remain. Mr. Murdoch provides the company with deep executive experience, knowledge of international markets and experience with adopting new technologies, it said in a securities filing. Mr. Musk brings experience in retail and consumer markets and technology companies. Mr. Murdoch has been on Tesla’s board since 2017 and Kimbal Musk has been a board member since 2004.

Peter Eavis contributed reporting.

U.S. stocks jumped on Thursday, adding to Wednesday’s gains, as investors reacted with relief to the news of an agreement in the Senate to raise the federal borrowing limit and pull the country from the brink of a debt default.

The S&P 500 gained about 1.5 percent in early trading, while the Nasdaq composite was up 1.6 percent. European stock indexes also rallied on Thursday, rebounding from a sharp decline the day before. The Stoxx Europe 600 was up 1.5 percent.

The rally picked up steam after top Senate Democrats and Republicans in the Senate on Thursday said they had struck an agreement that would allow the debt ceiling to be raised through early December.

“It’s our hope that we can get this done as soon as today,” Senator Chuck Schumer of New York, the majority leader, said on the Senate floor. He did not offer details about the agreement.

Senator Mitch McConnell of Kentucky, the minority leader, had said on Wednesday that Republicans would allow Democrats to vote on a short-term extension after weeks of disagreement over raising the debt ceiling. News of Mr. McConnell’s offer helped Wall Street rebound in late trading on Wednesday and end the day with a small gain.

Initial jobless claims for regular benefits declined last week, falling 38,000 to 326,000 after three consecutive weekly increases. For the week ending Sept. 18, about 4.2 million people were receiving some form of unemployment assistance, down 854,638 from the previous week.

“The combination of easing labor supply constraints, strong labor demand and an improving Covid outlook should spur further labor market progress in coming months,” Lydia Boussour, lead U.S. economist at Oxford Economics, wrote in a note.

Investors will also be keeping an eye on the monthly jobs report for September, set to be released on Friday. Economists surveyed by Bloomberg are forecasting that the U.S. economy added 500,000 jobs during the month, a sharp gain from the 235,000 added in August.

Credit…Brian Snyder/Reuters

Lael Brainard, a Federal Reserve governor, offered the clearest signal yet that America’s central bank is going to begin seriously assessing big banks’ exposure to climate-related financial risks.

Ms. Brainard said the Fed is in the process of developing climate-related scenarios for use in bank’s safety checkups, which are often called stress tests. She also endorsed the use of supervisory guidance — the Fed’s recommendations to banks — to encourage financial institutions to curb their exposures.

“I anticipate it will be helpful to provide supervisory guidance for large banking institutions in their efforts to appropriately measure, monitor, and manage material climate-related risks, following the lead of a number of other countries,” Ms. Brainard said, speaking from remarks prepared for a Fed research conference.

Ms. Brainard said that the Fed is also assessing climate-related risks from a broader perspective — trying to game out what melting ice caps and rampant wildfires could mean for the financial system as a whole.

“We are developing scenario analysis to model the possible financial risks associated with climate change and assess the resilience of individual financial institutions and the financial system to these risks,” she said.

The fact that it is developing climate scenarios puts the Fed more in line with its global counterparts, including the European Central Bank and the Bank of England, that have been examining what climate-related risks could mean for the banking sector. It also comes at a time when the Fed — and Jerome H. Powell, its leader — have faced backlash for moving slowly toward a more concerted climate push.

Mr. Powell had also suggested that the Fed would test banks’ exposure to climate problems, though his remarks, to lawmakers during testimony last week, were not as definitive or as detailed as Ms. Brainard’s. He explained that the Fed’s goal was to make sure regulated banks could manage any of the risks that threats like climate change pose.

“Scenario analysis is almost certainly going to be one of the principal tools for doing exactly that,” Mr. Powell said.

The central bank oversees the nation’s largest banks, including institutions such as Goldman Sachs and Bank of America.

Credit…Gabriela Bhaskar/The New York Times

Anticipating strong holiday travel, United Airlines said on Thursday that it will offer 3,500 daily flights within the United States in December, the most in any month since the pandemic began.

United said it plans to offer 91 percent as many domestic flights in December as it did in the same month in 2019, though the company’s final schedule could still change. That month, United will debut new direct routes — and restart a handful of others.

The airline plans to place an emphasis on flights connecting the Midwest to warm-weather destinations like Las Vegas and Orlando or ferrying travelers to ski slopes. Flight searches for holiday travel are up 16 percent compared with the same time in 2019, the airline said.

“We’re seeing a lot of pent-up demand in our data and are offering a December schedule that centers on the two things people want most for the holidays: warm sunshine and fresh snow,” said Ankit Gupta, vice president of network planning and scheduling at United.

United and other airlines enjoyed strong demand this summer because of widespread vaccinations, though the spread of the Delta variant of the coronavirus slowed that momentum going into the fall. The industry had hoped that corporate travel would restart in a big way after Labor Day, but many professionals have not returned to offices full time and business travel remains down.

Overall, air travel appears to have settled at about 75 percent of 2019 levels in September, according to data from the Transportation Security Administration. The Biden administration’s plan to relax travel restrictions on vaccinated foreigners starting next month is expected to provide another boost, especially around the holidays.

United said it expects the Wednesday before Thanksgiving and the Sunday after the holiday to be particularly busy. It also expects Thursday, Dec. 23, and Sunday, Jan. 2, to be popular travel days.

Credit…Mario Anzuoni/Reuters

NBCUniversal has reached a multimillion-dollar settlement with Ron Meyer, a former executive vice chairman of Universal Pictures, according to two people briefed on the matter, who spoke on the condition of anonymity because the agreement was confidential.

Mr. Meyer, who began running the film studio in 1995 and segued into a chairman role in 2013, admitted last year that he had made secret payments to a woman in an effort to cover up a decade-old affair. When he left NBCUniversal in August 2020, he still had a year and a half left on his contract.

The settlement was reported earlier by the industry trade publication Deadline. One person briefed on the negotiations said on Wednesday that NBCUniversal had agreed to pay Mr. Meyer roughly $15 million. A spokeswoman for NBCUniversal declined to comment.

At the time of Mr. Meyer’s ousting, he released a statement claiming to be the victim of an extortion plot. “I recently disclosed to my family and the company that I made a settlement, under threat, with a woman outside the company who had made false accusations against me,” he said in the statement.

That woman turned out to be Charlotte Kirk, a young British actress who was also involved with the former Warner Bros. chairman Kevin Tsujihara in a similar scandal that cost Mr. Tsujihara his job in 2019.

Mr. Meyer had a storied Hollywood career. After dropping out of high school at 15, he joined the Marine Corps at 17 and started his movie career at 19 as a messenger for a Hollywood talent agency. After working at William Morris as a television agent, he went on to found the Creative Artists Agency with Michael S. Ovitz and Bill Haber. At CAA, Mr. Meyer represented stars like Tom Cruise and Meryl Streep.

During his 18-years in charge of Universal, Mr. Meyer led the studio through four disruptive ownership changes. The company became the property of its current owner, Comcast, in 2011.

Brian X. Chen, our Tech Fix columnist, is done with paying for a virtual private network, a service that claims to protect your privacy when you’re connected to a public Wi-Fi network at the local coffee shop, the airport or a hotel.

Here’s why:

  • Many of the most popular VPN services are now also less trustworthy than in the past because they have been bought by larger companies with shady track records. That’s a deal-breaker when it comes to using a VPN service, which intercepts our internet traffic.

  • Many casual users may not even need a VPN anymore. Most sites now support HTTPS, a security protocol that encrypts traffic and solves most of the aforementioned problems. This means that VPNs are no longer an essential tool when most people browse the web on a public Wi-Fi network, said Dan Guido, the chief executive of Trail of Bits, a cybersecurity firm.

  • For those who would still prefer not to browse the web on a public Wi-Fi network, there’s an easy solution included on most smartphones: the personal hot spot, a feature for wirelessly sharing a smartphone’s cellular data connection with other devices, like your computer.

Some people still benefit from using a VPN. Here’s how to create your own →

Credit…Justin Sullivan/Getty Images

SAN JOSE, Calif. — The fifth week of the trial of Elizabeth Holmes, the founder of the blood testing start-up Theranos, offered only brief moments of drama amid long stretches of technical tedium.

Ms. Holmes is fighting 12 counts of fraud for her role in building Theranos into a $9 billion company that collapsed when it was revealed that its blood tests did not work. She has pleaded not guilty; if convicted, she faces up to 20 years in jail.

Ms. Holmes’s reputation as a tech and business prodigy — and the intense interest in her downfall — has turned the trial into a media spectacle. But a month in, the minutiae of the case, which hinges on whether Ms. Holmes intended to mislead investors, has begun to drag.

While the trial usually takes place three days a week, Friday’s session was canceled for Columbus Day. Here are takeaways from the week.

Adam Rosendorff, who was Theranos’s lab director in 2013 and 2014, testified for six days about highly technical elements of the company’s inner workings. Jurors’ eyes glazed over at detailed discussions of Immulite reagents, Advia machines, immunoassays, Vacutainers, and an array of acronyms like Q.C. (quality control) and H.C.G. (a hormone test).

Even Judge Edward Davila, typically reserved and patrician, hinted at exasperation as lawyers from both sides sparred over whether Dr. Rosendorff could be questioned about investigations that happened at companies he worked for after Theranos. The defense had already had four days to poke holes in Dr. Rosendorff’s testimony, Judge Davila said.

Despite the tedium, Dr. Rosendorff’s testimony was critical to the prosecution’s case. He described repeated instances of irregular and inaccurate results in Theranos’s blood tests, which he said made him uncomfortable and ultimately led him to leave. He said he left because he “wanted to join a reputable company whose mission I believed in.”

Lance Wade, a lawyer for Ms. Holmes, attacked Dr. Rosendorff’s testimony by muddying that narrative. When Mr. Wade noted Theranos’s initial offerings were merely a “soft launch” for friends and family, downplaying any issues with the blood tests, Dr. Rosendorff did not flinch. “Those are patients,” he said.

“It was a soft launch for friends and family,” Mr. Wade repeated.

“It was a patient launch,” Dr. Rosendorff said.


Who’s Who in the Elizabeth Holmes Trial

Erin Woo

Erin Woo📍Reporting from San Jose, Calif.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo

Erin Woo📍Reporting from San Jose, Calif.

Carlos Chavarria for The New York Times

Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and 10 counts of wire fraud.

Here are some of the key figures in the case →

Item 1 of 9

On Wednesday morning, before the proceedings, Judge Davila called a juror into the courtroom to discuss Buddhism. The juror, an older Asian woman, said she had become increasingly distressed about the trial. Her Buddhist practice is centered on love and forgiveness, she said, and it would be difficult for her to vote to convict Ms. Holmes. The juror said she could not follow the judge’s instructions to avoid thinking about punishment.

“What if she had to be in there for a long, long time,” she said, her voice breaking. The juror said she would blame herself.

Lawyers from both sides agreed to dismiss her.

The replacement juror, a young woman, had her own concerns. English was not her first language, she said. “It’s her future,” she said of Ms. Holmes. “I could make a mistake.”

The juror said she had understood all of the proceedings thus far. Judge Davila did not allow her to leave.

Keeping the jury together looms large over the four-month trial. In the first week, a juror was dismissed after learning her job would not compensate her for the time away. Each day, Judge Davila has asked the jurors whether they have been exposed to any media coverage that could sway their views.

The pandemic is also a risk. Even though all jurors are vaccinated and wear masks, one day of trial was already canceled because of a juror’s potential exposure to the coronavirus.

Three alternate jurors remain.

Steve Burd, the former chief executive of Safeway, on Wednesday began telling the story of Safeway’s partnership with Theranos, which ultimately unraveled.

Mr. Burd met Ms. Holmes in 2011 and was immediately impressed. He described the promises she had made about Theranos’s technology, testifying that he was excited to bring fast and cheap blood testing to Safeway’s grocery stores. People could shop for groceries while they waited for their results and picked up their prescriptions at Safeway’s pharmacies, he said.

The companies struck a deal for Safeway to pour as much as $85 million into Theranos by investing, buying its equipment and more. The negotiations were all done directly with Ms. Holmes with no lawyer present, a move Mr. Burd said he found “unusual.”

His testimony continues next week.

  • A digital-age magazine giant was born on Wednesday with the announcement that Dotdash, a publishing unit of Barry Diller’s InterActiveCorp, had reached an agreement to acquire Meredith, the publisher of People, Better Homes & Gardens, InStyle, Entertainment Weekly and about 40 other titles and digital brands. The purchase price is roughly $2.7 billion, or $42.18 per share, the companies said in a joint announcement. READ MORE →

  • Twitter said on Wednesday that it would sell MoPub, a platform for selling mobile advertising, to the marketing company AppLovin for $1.05 billion in cash. The sale will allow Twitter to focus on expanding other products, including performance-based advertising and commerce opportunities for small and medium-size businesses, its executives said. Twitter acquired MoPub in 2013 and reportedly paid around $350 million in stock. MoPub generated about $188 million in revenue during 2020, Twitter said in a statement about the sale. READ MORE