Does cutting CEO salaries lead to increased corporate performance? Elon Musk is found not liable in a suit by shareholders. And a University student helps scientists identify 8 new “technosignatures” in their search for intelligent life in space.
Welcome to Hashtag Trending – today’s top tech news stories for Monday, February 6, 2023.
We’ve all heard of the layoffs in the tech sector. Over 100,000 tech employees have lost their jobs as Google, Amazon, Meta,Twitter, Microsoft and a host of others shed staff in response to flagging demand and lower profits.
But it turns out that CEOs and top executives are also being asked to share the burden by taking pay cuts.
Apple is cutting Chief Executive Officer Tim Cook’s compensation by more than 40 per cent to $49 million dollars in 2023. Cook was among the highest-paid executives in 2021, drawing a multi-million dollar salary in cash and Apple stock.
Alphabet CEO Sundar Pichai has announced that senior executives will get significantly lower bonuses this year.
Microsoft, however, is bucking the trend. While it cut 10,000 jobs, it gave CEO Satya Nadella a 10 per cent increase to $55 million.
But the cuts are to some degree always related to corporate performance as a significant amount of a CEO’s compensation is paid in the form of company stock.
Amazon’s CEO Andy Jassy gets a meager $175,000 a year in base pay with most of his compensation coming from stock awards. With Amazon shares falling to almost half their 2022 value, that will reduce his overall compensation by a huge amount.
Meta CEO Mark Zuckerberg. takes a symbolic salary of $1 per year with his entire compensation paid in Meta stock. Zuckerberg’s lost $100 billion in value with his 13 percent share of Meta in 2022.
But do pay cuts or freezes in senior executive pay have any impact on company performance? Executive pay cuts that allow for employee raises, were shown to reduce turnover by almost 50 per cent according to a study by Vienna University of Economics and Business published in Forbes. According to that article, researchers determined that a “pay cut was as good as finding a new CEO.” They also found that financial performance tends to rebound following executive compensation cuts.
Median profitability “increases from -8 per cent to 10 per cent in the 3 years following a large cut according to another study referenced in the Forbes article done by three universities – Nayang Technology University, the University of Washington and the University of British Columbia.
Elon Musk was found “not liable” for a 2018 tweet in which he wrote that he had “funding secured” to take the Tesla private. This is a big win for Musk who has been in a huge public fight with the U.S. Securities and Exchange Commission. Musk settled a potential lawsuit with the SEC by agreeing to step down as Chairman of Tesla and pay a 20 million dollar fine.
Although Musk settled the SEC lawsuit, he was still sued by a group of investors who alleged that Musk “knowingly or recklessly made the public claims, and caused them investment losses.” Last Friday, a San Francisco jury found him “not liable” on those charges.
“Thank goodness, the wisdom of the people has prevailed,” Musk said noting also “I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.
In another story involving the Securities and Exchange Commission, power management giant Schneider Electric has developed a set of tools for its MSP and data center customers to allow them to provide proof of compliance with carbon emission standards.
The SEC has proposed rule changes that would require companies to report “climate-related risks that are reasonably likely to have a material impact on their business.”
A recent article in Bloomberg noted that many companies were not effectively making cuts to their emissions, but were relying on what are called “Renewable Energy Credits” or REC’s – essentially purchasing these certificates from clean power providers, allowing them to claim that they are using carbon-free power.” But under these schemes, the companies don’t actually contract for clean power, instead, they use the credits to subtract an equivalent amount of fossil fuel-powered electricity from their climate ledgers.
Not surprisingly, these credits have come under heavy scrutiny and the article notes that once they are removed from a company’s carbon accounting, many businesses would no longer be on track for meeting the climate goals “pegged to the Paris Agreement” for limiting global warming.
A study published in the journal Nature Climate Change notes that with RECs in their carbon accounting, the 115 companies studied reduced their emissions by 31 per cent from 2015 to 2019. Without the credits, their emissions fell by only 10 per cent. The authors note the credits “allow companies to report emission reductions that are not real.”
This has led to concerns about penalties for “greenwashing,” where companies make claims of being climate-friendly but aren’t. Schneider’s toolset aims to allow companies to measure and prove their emission reductions.
Carsten Baumann, director of strategic initiatives & solutions architect at Schneider Electric noted, “The challenge right now is companies want to appear to be sustainable and try to gain some sort of an advantage over others, yet there’s no real accountability to what you say,”
Southwest Airlines announced that it has appointed Lauren Woods, the company’s VP of Technology, as its new SVP and CIO. Woods will replace CIO Kathleen Merrill, who has been at Southwest for over two decades.
According to a company statement, Woods will “play an important role” in managing the much-needed technology transformation. Southwest is expected to spend as much as 1.3 billion dollars in system upgrades and maintenance.
The announcement of the leadership change follows a major IT outage during the critical holiday travel season. According to an SEC filing by the airline, it said that the outages cost it more than $725 million, between additional operating costs and estimated revenue losses.
Woods, who has been at the company for 12 years, has a tough job ahead of her in an industry that has struggled and largely failed to keep up with technology modernization, often spending far less on IT than other industries.
According to Ted Schadler, VP and principal analyst at Forrester. “The failure of Southwest’s crew scheduling systems shows why technology investments are critical to any business”. In a January blog post, he wrote, “Southwest’s reputation was lost in an instant by not executing on something that the company must have to succeed,”
And finally, some new AI developments, devised by Peter Ma, a University of Toronto student has allowed scientists searching for signs of extraterrestrial life to identify eight new signals that may be interpreted as coming from a technologically advanced civilization.
Ma’s new technique for training the AI algorithm is better able to pinpoint where in the sky a signal comes from, which will drastically reduce false positives from radio interference.
Using the improved algorithm, the team fed 150 terabytes of data and identified 20,515 signals of interest, which they then had to manually inspect. From that sample, eight signals had the characteristics of “technosignatures”, ones that couldn’t be attributed to radio interference.
Unfortunately, the team was unable to find these signals again which means they are probably false positives, but it gives hope to the scientists who have to sort through terabytes of data who now have improved AI-driven tools to aid in their search for intelligent life. If they do ever succeed, a University of Toronto student may have helped us move closer to finding out if “the truth is out there.”
And that’s the top tech stories for today. Hashtag Trending is produced by the ITWC podcast network and is heard Monday to Friday with a special weekend edition hosted by me where we feature interviews on key subjects in technology.
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I’m Jim Love – talk to you tomorrow with the top tech news stories on Hashtag Trending.