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June 23, 2021
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Good morning! This Wednesday, the annual meeting is the new battleground for shareholder activism, Warby Parker files to go public, China loves the Quibi model, and remote work replaces the pool table as a company perk.
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Today is the launch of Protocol | Workplace! That's where we'll cover every corner of the future of work, from diversity and equality to Zoom tips to hybrid work to the future of the in-office cafeteria. Never before has so much about work changed so fast, and we're here to help you navigate it all.
You can sign up for the Protocol | Workplace newsletter here, and make sure to come to our next event, Redesigning the 9-5, on Tuesday. And shoot us an email if you have tips or ideas for us! You can reach the whole Workplace team at firstname.lastname@example.org.
The Big Story
Power to the shareholder
Tech employees have become some of their industry's toughest critics, speaking out against everything from unsafe working conditions in Amazon's fulfillment centers to retaliation against Google ethicists.
They've mounted strikes and signed petitions. Some have even taken their fight to legislators. Now, tech companies' annual meetings are also becoming a vehicle for addressing worker concerns.
- This year, Facebook, Amazon, Alphabet and others voted on a battery of shareholder resolutions focused on workplace issues, including proposals to audit whistleblower protections and add more civil and human rights expertise to company boards. (Disclosure: My husband works for Amazon).
One by one, the resolutions all got voted down. But proponents of this approach aren't admitting defeat. Activist investors and tech workers alike argue they're playing the long game.
- "At its heart, this work is about persistence and long-term change," said Jonas Kron, chief advocacy officer at Trillium Asset Management, which has sponsored a resolution calling for a third-party review of whistleblower protections at Alphabet two years in a row.
Investments in ESG funds (short for "environmental, social and governance") have exploded in recent years, spurring a wave of shareholder resolutions aimed at forcing companies to be better to the planet, their communities and their employees. But shareholders pushing these proposals particularly at Facebook and Alphabet face a steeper battle than most thanks to the companies' dual class share structures.
- Dual class shares essentially give Mark Zuckerberg, Larry Page, Sergey Brin and other powerful leaders inside both companies 10 times as much voting power per share as other investors.
- That means they can — and do — single-handedly swat away proposals they don't like.
The numbers bear that out. Open Mic, a nonprofit that works with shareholders to push forward these proposals, crunched the numbers behind some of this year's votes with and without their most powerful shareholders.
- A Facebook resolution to do away with dual class shares got just 28% of votes overall, but 89% when you take out Zuckerberg's share.
- A similar vote at Alphabet got 31% of the vote overall, but about 90% if you don't count Alphabet's directors and officers.
- "Alphabet's not a company where any shareholder coalition that doesn't include Larry and Sergey can pass something by vote," said Andrew Gainer-Dewar, a Google engineer who presented on the whistleblower proposal. "Despite being a trillion-dollar company, it's controlled by two people."
So, why even try? Michael Connor of Open Mic argues that even votes that fail can still have an impact on these companies. "Over time even if shareholder proposals are voted down, it doesn't mean directors don't have a fiduciary duty to worry about those issues and be concerned about them," he said.
- Connor pointed to several recent efforts where shareholders were able to secure a majority vote after years of trying. Most recently, an activist hedge fund manager pushing for climate-friendly reform was able to replace several of ExxonMobil's board members.
- Kron notes Trillium's proposal years ago that tried to push Google to publish a sustainability report. The proposal failed, but not long after, Google began doing just that and is now on track to run on carbon-free energy by 2030.
Shareholder activism can be one of many important pressure points for tech workers seeking change, Ifeoma Ozoma, a former Pinterest employee who spoke out about discrimination and retaliation she experienced at the company last year, told me.
- Ozoma is working on pushing through legislation in California that would allow people to break their NDAs in instances where they've experienced illegal harassment or discrimination.
- But she's also planning to push forward a shareholder proposal that mirrors the bill — though she's not saying yet which company she's targeting.
- Her hope is to get the issue in front of top tech executives who might otherwise ignore it.
"[This] is a mechanism to have the conversation with the company that you don't have when you're just asking them to do something," Ozoma said.
— Issie Lapowsky (email | twitter)
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A MESSAGE FROM THE PILL CLUB
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People Are Talking
Gaming can and ought to be a vector for increasing diversity, Microsoft's Sarah Bond said:
- "Your ability to see all humans as truly equal is really built by having closeness with other people, experiencing things with them, walking in other people's shoes, developing friendships — and gaming has the ability to do that, unlike anything else."
On Protocol | Policy: Sen. Mike Lee took conservatives to task for politicizing antitrust reform:
- "When well-compensated lobbyists and their nonprofit proxies attempt to pervert conservative economic and legal philosophy into a defense of Big Tech monopolists, antitrust policy and consumers suffer."
Patreon doesn't have a sweetheart deal with Apple, Jack Conte said, but it also doesn't have to use Apple's payment systems:
- "I wish we had some special contract with Apple. We don't. We have to deal with the App Store policies and review process like anybody else. And sometimes we actually get delayed and have to make changes in the apps … Why don't we have to pay fees? I think it's because, for whatever reason, we're within Apple's guidelines, and we haven't had to pay fees."
Software is still eating the world, Marc Andreessen said, and that's a great thing:
- "Everywhere software touches the real world, the real world gets better, and less expensive, and more efficient, and more adaptable, and better for people. And this is especially true for the real world domains that have been least touched by software until now — such as housing, education, and health care."
The antitrust bills currently under consideration would ruin the tech industry, Google's Mark Isakowitz said:
- "The bills would require us to degrade our services and prevent us from offering important features used by hundreds of millions of Americans. This would all dramatically undermine US technology leadership, damage the way small businesses connect with consumers, and raise serious privacy and security concerns."
Microsoft was briefly a $2 trillion company. It closed a bit under that number on Tuesday, but is the only non-Apple tech company to ever hit the mark.
Lynn Miller is the new general counsel at Plus, joining from Tesla.
Margaret Mitchell is consulting for Hugging Face to build foundations for ethical AI development.
Intel made big executive changes: Greg Lavender is joining from VMware to be CTO, Raja Koduri is leading the Accelerated Computing Systems and Graphics Group, Sandra Rivera is now running the Datacenter and AI group, and Nick McKeown is in charge of a new Network and Edge Group.
Warby Parker is going public. It filed a confidential S-1 yesterday, Axios reported, but hasn't decided whether to do an IPO or direct listing.
In Other News
- On Protocol | China: The Quibi model works … in China. Apps like Kuaishou are getting users hooked on short-form series, though many are lower-budget and deeply corny on purpose. That's part of the fun.
- Tim Cook is telling Congress the antitrust bills won't work. He called Nancy Pelosi and other members to tell them the new antitrust bills were rushed, bad for innovation and bad for customers. And Apple.
- On Protocol: Brave built a search engine. Like everything Brave does, it's deliberately privacy-centric, and Brave even built its own search index for the product.
- Google built a tool for managing remote workers. Any employee who requests a transfer to a new market will also get an estimate of their new salary through the Work Location Tool, and some might see that number go down as they move out of big cities.
- The FTC is looking into Amazon's MGM acquisition. A merger this large was always going to face scrutiny, but the FTC — now led by noted Amazon critic Lina Khan — wanted to combine this with its other investigations into the company.
- On Protocol | Enterprise: Google Cloud is pushing into the manufacturing world, and has found it both needs to help customers get more done and make sure it doesn't leave them in the lurch by suddenly killing products. Which we know Google has a habit of doing.
- Teamsters will take up the plight of Amazon workers. Vice reported that The International Brotherhood of Teamsters, a powerful union, has decided worker power at Amazon is its main focus going forward.
- Peloton is expanding its product lineup. It's working on an armband, Bloomberg reported, that can capture more in-workout data and pair with your bike or treadmill. The company's also getting into at-work fitness with the new Corporate Wellness program.
- You can apply to get access to Twitter's Ticketed Spaces and Super Follows. The feature is still only out on a limited basis, but if you have a big audience you might as well try and get that cheddar.
- Don't miss this story about Blue Box, the conspiracy theory that's spreading around the internet claiming that a little-known horror game is actually a front for Hideo Kojima's next masterpiece.
One More Thing
Offer remote work, or lose your best prospects to someone who will. That's what Facebook thinks the future looks like, according to Miranda Kalinowski, the company's head of recruiting. Facebook has expanded its plans for remote work in recent weeks, a quick shortcut to expand its talent pool. "There's no secret to the fact that across the tech sector, we've got a huge opportunity to attract more [remote] candidates who have been from underrepresented groups that we may not have been able to attract in the past," Kalinowski said.
She's pretty sure a lot of other companies are going to do the same … but she's OK if they don't. "Companies that are not able to offer it will see themselves at a distinct disadvantage," she said, and Facebook stands to be one of the beneficiaries.
A MESSAGE FROM THE PILL CLUB
A woman's ability to access birth control and receive it by mail should be common-sense, not a luxury reserved for those that can afford it. Women already face too many barriers to receive basic healthcare. The Pill Club is calling on policymakers to support women and make telehealth the norm. Join our team.
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