May 29, 2023 - Employment & Business News

St James’s Place starts search for new CEO

Posted on May 29, 2023 - 11:01 am by Nagasunder

St James’s Place, one of Britain’s largest wealth management firms overseeing more than £150 billion in client assets, has begun the search for a new chief executive officer (CEO), as Andrew Croft prepares to step down.

The FTSE-100 company has enlisted the services of Russell Reynolds Associates, a renowned headhunter, to help in finding a suitable successor, according to sources familiar with the matter.

Andrew Croft has been with St James’s Place since 1993 and held the position of finance chief from 2004 to 2017 before assuming the role of CEO in 2018.

Although there is “no rush” to find a replacement, insiders suggest the transition to a new CEO could span over a year, indicating a deliberate and careful selection process.

St James’s Place specializes in serving affluent clients and employs thousands of financial advisers, referred to as partners, who collectively manage £153 billion in assets.

The firm has faced scrutiny regarding its recent performance, with Mr. Croft characterizing quarterly net inflows as “good,” while analysts have expressed differing opinions.

Additionally, the company issued a warning this year it would fall short of a key expenses growth target.

In 2019, St James’s Place became embroiled in a controversy surrounding partners’ compensation and benefits, such as luxury cruises and jewelry, which were awarded to high-performing individuals.

Following a review, the program was discontinued to promote appropriate behavior, addressing concerns that partners were being incentivized to engage in misleading sales practices.

The news of the potential leadership change at St James’s Place coincides with the upcoming introduction of a new consumer duty overseen by the Financial Conduct Authority.

Paul Manduca, a respected figure in the financial industry who chairs St James’s Place and previously led Prudential, will oversee the search for Croft’s successor.

During the company’s recent annual meeting, more than 20 percent of shareholders voted against its remuneration report, reflecting discontent within the investor community.

Andrew Croft’s total package for the previous year amounted to just over £3 million, with some investors expressing dissatisfaction over his receipt of long-term awards tied to the company’s depressed share price during the pandemic.

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St James’s Place partners operate on a self-employed basis, and the firm is headquartered in Cirencester.

A spokesperson for St James’s Place stated that the board maintains regular communication with search firms as part of long-term succession planning and adheres to best practices in corporate governance.

As of Friday’s closing, St James’s Place shares were up 7.5p at 1112.5p, giving the company a market value of £6.1 billion. Over the past 12 months, the stock has experienced an 11 percent decline.

Walgreens Boots Alliance to cut 10 percent of corporate workforce

Posted on May 29, 2023 - 11:01 am by Nithya Bose

Walgreens Boots Allianceis is cutting 504 corporate jobs, which accounts for approximately 10 percent of its corporate workforce.

The majority of the cuts will be made at its offices in Deerfield and Chicago.

However, the impacted roles constitute only about one percent of the company’s overall US workforce.

The retail pharmacy giant said the job cuts are part of its transformation into a consumer-centric healthcare company.

The company aims to align its structure and streamline operations to serve patients and customers better.

It said the affected employees are not from store locations, microfulfillment centers, or call centers.

The company expressed gratitude for the contributions made by the departing team members and pledged support during the transition.

Walgreens said that both its Deerfield and Chicago offices will continue operations, emphasizing its commitment to maintaining a presence in those locations.

The layoffs come at a time when Walgreens faces challenges related to opioid-related settlements and intensified competition with rivals CVS Health and Amazon.

In the first six months of this fiscal year, Walgreens reported a net loss of $3 billion, largely due to a $5.4 billion after-tax charge for opioid-related claims and litigation.

Recently, the retail chain reached a $10.7 billion settlement agreement with Illinois and several other states over allegations of contributing to the opioid epidemic.

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Last week, the company also settled with San Francisco for $230 million after being found liable for its role in the opioid crisis.

To strengthen its healthcare offerings, Walgreens has invested significant funds in VillageMD, a Chicago-based primary care clinic provider with clinics located adjacent to Walgreens stores nationwide.

Walgreens plans to expand the number of Village Medical clinics to 1,000 by 2027.

Both Walgreens and CVS have been actively expanding their healthcare businesses.

CVS recently finalized a $10.6 billion deal to acquire Oak Street Health, a Chicago-based company offering primary care services to Medicare beneficiaries across the country.

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Eli Lilly to pay $13.5 million in class-action lawsuit over insulin pricing

Posted on May 29, 2023 - 9:39 am by Nithya Bose

Drugmaker Eli Lilly has settled a class-action lawsuit filed six years ago after being accused of systematically overpricing insulin.

The company has agreed to pay $13.5 million and maintain the cap on out-of-pocket costs for insulin users for four more years.

Under the settlement agreement, those who do not qualify for the $35-a-month cap, such as those who no longer use Eli Lilly insulin or are enrolled in Medicare and Medicaid, can access the $13.5 million fund.

This fund will also cover administrative costs and fees for the plaintiffs’ attorneys.

According to the American Diabetes Association, around 7 million Americans rely on insulin daily to manage their diabetes.

However, the prices of the most popular insulin types have tripled over the past decade.

The suit highlighted the struggles faced by insulin users, including extreme measures like self-starvation and intentionally inducing ketoacidosis to obtain insulin from emergency rooms.

The settlement, which still requires approval from the US District Court for the District of New Jersey, does not include an admission of liability or wrongdoing by Eli Lilly.

A company spokesperson said: “The settlement contains no admission of liability or wrongdoing by Lilly.”

“The agreement is a reflection of our continued commitment to close gaps in the U.S. health-care system for people with diabetes.”

Earlier this year, Eli Lilly announced a 70 percent price reduction for its commonly prescribed insulin.

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The class covered by the lawsuit includes anyone in the US who paid for any Lilly insulin product between January 1, 2009, and the final approval order for the settlement.

Eligible insulin buyers can file claims forms on the settlement website.

Upon preliminary approval, the plaintiffs’ attorneys plan to subpoena the six largest pharmacy benefit managers and the seven largest retail pharmacy chains in the US to gather transactional data for verifying settlement claims.

Steve Berman, the court-appointed co-lead counsel for the insulin buyers said the settlement and four-year cap are estimated to “save these consumers $500 million in payments for their insulin over the four-year period.”

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Disney still plans to invest in Florida which could create 13,000 new jobs

Posted on May 29, 2023 - 7:50 am by Nithya Bose

Disney remains dedicated to its expansion in Florida despite ongoing tensions with Governor Ron DeSantis.

The entertainment giant has announced plans to invest $17 billion in central Florida’s Walt Disney World hub over the next ten years.

The project would potentially generate 13,000 job opportunities.

Despite the escalating feud between Disney and Florida lawmakers, CEO Bob Iger and parks chief Josh D’Amaro have consistently reiterated these figures in recent months.

The significance of this conflict has heightened with DeSantis officially running for president.

Disney filed a lawsuit in April, accusing DeSantis and the new board members of its special district of engaging in a campaign of political retaliation against the company.

The governor targeted Disney’s special district, previously known as the Reedy Creek Improvement District.

It was after Disney’s public criticism of a controversial Florida bill restricting discussions of sexual orientation and gender identity in classrooms, referred to by critics as the “Don’t Say Gay” bill.

During the company’s earnings call, Iger expressed his disappointment in having to defend their business interests in federal court.

He emphasized the long-standing positive relationship between Disney and the state over the past 50 years.

However, the firm recently canceled plans for a new employee campus in Lake Nona, Florida, citing changing business conditions.

It resulted in the elimination of the relocation proposal for over 2,000 California-based employees.

This location was not part of the $17 billion investment plan.

D’Amaro, overseeing Disney’s parks, experiences, and consumer products division, further stressed the company’s aggressive approach to the investment.

He highlighted the transformation of Epcot and the introduction of new attractions such as Star Tours and Tiana.

Epcot has already opened Remy’s Ratatouille Adventure and Guardians of the Galaxy: Cosmic Rewind, with future additions like The Journey of Water set to open in late 2023.

Disney World’s Hollywood Studios, along with Disneyland and Disneyland Paris, will witness expansions to the Star Tours attraction and the transformation of Splash Mountain into a “Princess and the Frog” theme.

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The company also has plans to update multiple hotel and resort locations in Florida.

Additionally, D’Amaro mentioned “blue sky” ideas from the D23 Expo, including revamping Dino Land at Animal Kingdom, potentially incorporating “Zootopia” or “Moana” themes, and exploring Disney villain-themed areas at Magic Kingdom.

While the exact costs for these projects are yet to be determined, previous estimates for similar endeavors like Star Wars: Galaxy’s Edge were around $1 billion each.

Disney’s theme parks have experienced a significant rebound in guest visitation following the pandemic shutdowns,.

With the parks being a key growth driver for the company, Iger underscored their importance during its recent earnings call.

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Rolls-Royce restructuring plans put 3,000 jobs at risk

Posted on May 29, 2023 - 6:49 am by Nithya Bose

Luxury car manufacturer Rolls-Royce has announced plans to reduce its workforce, aiming to streamline its operations.

The firm will use consultants from McKinsey & Co who will provide guidance on the matter.

The company is reportedly planning to layoff of approximately 3,000 employees from various non-manufacturing roles across its global staff.

This initiative involves merging the non-manufacturing departments within Rolls-Royce’s civil aerospace, defence, and power systems divisions.

A company spokesperson said: “We are working at pace on our transformation across a number of work streams and only one part of one of those work streams is about realizing organizational efficiencies.

“We have made no decisions whatsoever on any potential impact on employees and any suggestion otherwise is pure speculation.”

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The cuts are expected to have a significant impact on Rolls-Royce’s London headquarters, where the majority of its back-office administrative functions are located.

CEO Tufan Erginbilgic has initiated several key management changes alongside this workforce reduction to drive the manufacturer’s transformation program.

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Boots CEO earns £3.8 million as profits triple post-pandemic

Posted on May 29, 2023 - 6:13 am by Nagasunder

Seb James, the CEO of Boots, received £3.8 million in pay last year as the health and beauty retailer’s profits tripled in the wake of the pandemic.

Pre-tax profits for the company reached £137 million in the fiscal year ending on August 31, 2022, across its three entities that file accounts on Companies House.

This marked a significant increase from the previous year’s £44.5 million. Additionally, sales grew by nearly 10 percent to reach £7.8 billion.

Seb James’ remuneration package included £1.9 million in fixed pay, £1.8 million in long-term bonuses, and £100,000 in pension payments.

This amounted to more than double his £1.5 million earnings from the previous year.

The Boots CEO’s pay reflects the retailer’s strong financial performance during the period.

Boots, known for its nationwide network of over 2,000 stores, reported its eighth consecutive quarter of market share growth earlier this year.

In the three months leading up to February 28, 2023, the company witnessed a notable sales surge of 16 percent.

This growth was attributed to the strong performance of its beauty category and an increase in foot traffic as customers returned to physical stores.

Reports emerged in March suggesting that Boots might be sold or publicly listed before the end of the year.

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Executives of the retailer’s US parent company, Walgreens, have been facing mounting pressure to consider a breakup of the global pharmacy giant.

This potential transaction would mark Walgreens’ second attempt to divest Boots after the abandoned £5 billion sale in 2022.

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Airmeet cuts jobs citing market challenges

Posted on May 29, 2023 - 4:36 am by Nagasunder

Airmeet, a domestic virtual events platform, has recently undertaken a significant workforce reduction, reportedly affecting approximately 30 percent of its employees.

The layoffs have impacted multiple departments, including sales, marketing, technology, and operations, across the company’s operations in India, the United States, and Europe.

Sequoia Capital-backed Airmeet raised $35 million in its Series B funding round from Prosus Ventures and Sistema Asia Fund.

The platform offers a unique online meeting and event hosting experience, allowing participants to engage with other attendees in virtual interactions.

In an internal email to employees, Airmeet CEO Lalit Mangal outlined the reasons behind the job cuts.

Mangal cited reduced marketing budgets and the rapid commoditization of the virtual event category as key factors influencing the decision.

He said: “With drastically reduced marketing budgets everywhere and rapid commoditization of the virtual event category, our steadfast execution is not yielding the needed outcomes for retaining a healthy financial state.”

He emphasized the company’s objective is to become lean and agile, focusing on building a new future for digital engagement in communities and corporations.

To support the affected employees, Airmeet has offered two months’ salary as severance pay for its India-based workforce.

Additionally, the vesting of all employee stock options (ESOPs) will be accelerated until June 30. Health insurance coverage will also be extended until August 18 for impacted employees in India.

For those in the United States, Airmeet will provide severance pay in compliance with local regulations.

The global IT industry has faced significant challenges in 2023, with nearly 200,000 job cuts reported thus far.

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This trend has affected numerous technology giants, including Google, Microsoft, Amazon, Facebook, IBM, HP, Dell, and others.

As companies navigate the evolving landscape, cost optimization and adapting to market conditions have become critical aspects of ensuring financial stability.

ICICI Bank increases stake in ICICI Lombard general

Posted on May 29, 2023 - 3:52 am by Nagasunder

ICICI Bank has made a strategic decision to increase its stake in ICICI Lombard General, reversing its previous plan to reduce its shareholding in the company.

In a meeting held on Sunday , the board approved the conversion of ICICI Lombard into a subsidiary.

Earlier, on March 10, ICICI Bank had disclosed that the Reserve Bank of India (RBI) had extended the deadline for reducing its stake in ICICI Lombard to below 30 percent of the company’s paid-up capital until September 9, 2024.

However, the recent decision indicates a change in approach by the bank.

Under the new plan, ICICI Bank aims to acquire an additional 4 percent stake in ICICI Lombard in multiple tranches.

The bank intends to purchase at least 2.5 percent of the additional stake before September 9, 2024.

The RBI regulations permit banks to hold a stake in insurance companies as a subsidiary (above 50 percent) or limit their holding to 30 percent.

Furthermore, the board of ICICI Bank also approved the reappointments of Hari Mundra and B Sriram as independent directors for their second terms.

Hari Mundra, a visiting professor at IIM Ahmedabad, will serve from October 26, 2023, until October 25, 2024, when he reaches the age of 75.

B Sriram, a former managing director of IDBI Bank, will continue in his role from January 14, 2024, to January 13, 2027, subject to shareholder consent.

In addition to the director reappointments, the board extended Sandeep Batra’s term as the executive director of ICICI Bank.

Batra’s initial appointment was approved by the shareholders and the RBI, commencing on December 23, 2020, for a duration of five years.

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The board has now extended his term for an additional two years, from December 23, 2023, to December 22, 2025.

These developments signify ICICI Bank’s revised approach towards its stake in ICICI Lombard General, showcasing its commitment to the insurance subsidiary and the expertise of its directors.