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US

Trump executive Weisselberg prepares for jail on Rikers Island

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NEW YORK, Jan 10 (Reuters) – A longtime executive for Donald Trump is expected to be sent to New York’s notorious Rikers Island jail after being sentenced on Tuesday for helping engineer a 15-year tax fraud scheme at the former president’s real estate company.

Allen Weisselberg, the Trump Organization’s former chief financial officer, pleaded guilty in August, admitting that from 2005 to 2017 he and other executives received bonuses and perks that saved the company and themselves money.

Weisselberg is expected to be sentenced to five months behind bars, after paying nearly $2 million in taxes, penalties and interest and testifying at the criminal trial of the Trump Organization, which was convicted on all counts it faced.

The sentence will be imposed by Justice Juan Merchan, who oversaw the trial in a New York state court in Manhattan. Weisselberg would likely serve 100 days with time off for good behavior.

Those days will probably not be easy for Weisselberg, 75, at a jail known for violence, drugs and corruption. Nineteen inmates there died last year.

“You’re going into a byzantine black hole,” said Craig Rothfeld, a prison consultant helping Weisselberg prepare for lockup.

50-YEAR RELATIONSHIP

Many convicts in New York City facing one year or less behind bars head to Rikers Island, which lies between the New York City boroughs of Queens and the Bronx and houses more than 5,900 inmates.

Rothfeld spent more than five weeks at Rikers in 2015 and 2016 as part of an 18-month sentence for defrauding investors and tax authorities when he was chief executive of the now-defunct WJB Capital Group Inc.

He now runs Inside Outside Ltd, which advises people facing incarceration. Another client is Harvey Weinstein, the former Hollywood movie producer convicted twice of rape.

After being sentenced, Weisselberg will likely be driven to Rikers and trade his street clothes for a uniform and sneakers with velcro straps.

Rothfeld said he hopes Weisselberg will be segregated from the general population, and not placed in a dorm with inmates who may not know him but will know his boss, who is seeking the presidency in 2024.

“Certainly Mr. Weisselberg’s 50-year relationship with the former president is on all our minds,” Rothfeld said.

A spokesman for the city’s Department of Correction said the agency’s mission is “to create a safe and supportive environment for everyone who enters our custody.”

Rikers is scheduled to close in 2027.

STAR WITNESS

Weisselberg was the star government witness against his employer.

He told jurors that Trump signed bonus and tuition checks, and other documents at the heart of prosecutors’ case, but was not in on the tax fraud scheme.

Though no longer CFO, Weisselberg remains on paid leave from the Trump Organization. He testified in November that he hoped to get a $500,000 bonus this month.

Weisselberg testified that the company is paying his lawyers. It is paying Rothfeld as well, a person familiar with the matter said. Rothfeld declined to comment.

Trump was not charged and has denied wrongdoing. The Manhattan District Attorney’s office is still investigating his business practices.

Merchan will also sentence the Trump Organization on Friday. Penalties are limited to $1.6 million.

Weisselberg remains a defendant in New York Attorney General Letitia James’ $250 million civil lawsuit alleging that Trump and his company inflated asset values and Trump’s net worth.

Rothfeld said he advised Weisselberg not to go outside at Rikers because of the risk of violence in courtyards, and not to interject himself into conversations between other inmates.

“The goal is to keep to yourself,” Rothfeld said.

Reporting by Karen Freifeld; Editing by Richard Chang

Our Standards: The Thomson Reuters Trust Principles.

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US

Trump Organization found guilty of tax fraud scheme

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NEW YORK, Dec 6 (Reuters) – Donald Trump’s real estate company was convicted on Tuesday of carrying out a 15-year-long criminal scheme to defraud tax authorities, adding to the legal woes facing the former U.S. president as he campaigns for the office again in 2024.

The Trump Organization – which operates hotels, golf courses, and other real estate around the world – was found guilty of paying personal expenses for top executives including former chief financial officer Allen Weisselberg, and issuing bonus checks to them as if they were independent contractors.

The company faces up to $1.6 million in fines after being convicted on all charges, including scheming to defraud tax authorities, conspiracy and falsifying business records. Trump was not charged in the case.

Justice Juan Merchan, who presided over the trial in state court in New York, set a sentencing date for Jan. 13.

While the fine is not expected to be material for a company of the Trump Organization’s size, the conviction could complicate its ability to do business.

Weisselberg, 75, testified as the government’s star witness as part of a plea deal that calls for a sentence of five months in jail.

Manhattan District Attorney Alvin Bragg, whose office prosecuted the case, called the verdict “very just.”

“The former president’s companies now stand convicted of crimes,” Bragg said in the New York courthouse after the verdict, speaking of the Trump Corporation and Trump Payroll Corporation, the two units of the Trump Organization which were convicted.

Asked if he regretted not charging Trump in the case, Bragg did not respond.

He has said that the office’s investigation into Trump is continuing.

APPEAL

Alan Futerfas, a lawyer for the Trump Organization, said the company would appeal and that the criminal law governing corporate liability was vague.

“It was central to the case,” he told reporters after the verdict.

The jury deliberated for about 12 hours over two days.

[1/6] Former U.S. President Donald Trump attends a rally to support Republican candidates ahead of midterm elections, in Dayton, Ohio, U.S. November 7, 2022. REUTERS/Gaelen Morse/File Photo

The case centered on charges that the company paid personal expenses like free rent and car leases for executives including Weisselberg without reporting the income, and gave them bonuses as non-employee compensation from other Trump entities like the Mar-a-lago Club, without deducting taxes.

According to testimony during the four-week trial, Trump himself signed the bonus checks annually, paid private school tuition for Weisselberg’s grandchildren, authorized the lease for his luxury Manhattan apartment and approved a salary deduction for another executive.

“The whole narrative that Donald Trump was blissfully ignorant is just not real, prosecutor Joshua Steinglass told jurors during his closing argument on Friday.

He said the “smorgasbord of benefits” was designed to keep top executives “happy and loyal.”

Republican Trump, who on Nov. 15 announced his third campaign for the presidency, said in a statement he was “disappointed” by the verdict but called the case a “Manhattan witch hunt.” Both Bragg and his predecessor who brought the charges, Cyrus Vance, are Democrats.

SEPARATE LAWSUIT

The Trump Organization separately faces a fraud lawsuit brought by New York state Attorney General Letitia James.

Trump himself is being investigated by the U.S. Department of Justice over his handling of sensitive government documents after he left office in January 2021 and attempts to overturn the November 2020 election, which he lost to Democrat Joe Biden.

Lawyers for the Trump Organization argued that Weisselberg carried out the scheme to benefit himself, not the company. They tried to paint him as a rogue employee. Weisselberg is currently on paid leave and testified that he hopes to get another $500,000 bonus in January

Trump wrote on his Truth Social platform on Nov. 19. that his family got “no economic gain from the acts done by the executive.”

Weisselberg, who pleaded guilty in August to concealing $1.76 million in income from tax authorities, testified that although Trump signed checks involved, he did not conspire with him.

He said that the company saved money by paying for his rent, utilities, Mercedes-Benz car leases for him and his wife and other personal expenses rather than raising his salary, because a wage hike would have had to account for taxes.

He said Trump’s two sons – who took over the company’s operations in 2017 – gave him a raise after they knew about his tax dodge scheme.

By then, Trump was president, and the company was preparing for greater scrutiny.

“We were going through an entire cleanup process of the company to make sure that since Mr. Trump is now president everything was being done properly,” Weisselberg testified.

Reporting by Luc Cohen and Karen Freifeld in New York; additional reporting by Andrew Hofstetter in New York; Editing by Noeleen Walder and Grant McCool

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Luc Cohen

Thomson Reuters

Reports on the New York federal courts. Previously worked as a correspondent in Venezuela and Argentina.

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Business

Elon Musk trial opens to decide fate of his $56 billion Tesla pay

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WILMINGTON, Del, Nov 14 (Reuters) – A trial opened Monday over shareholder allegations that Tesla Inc Chief Executive Elon Musk’s $56 billion pay package was rigged with easy performance targets and that investors were duped into approving it, with Musk slated to take the stand later this week.

A Tesla (TSLA.O) shareholder hopes to prove during the five-day trial that Musk used his dominance over the electric vehicle maker’s board to dictate terms of the 2018 package, which did not even require him to work at Tesla full-time.

Musk, the world’s richest person, will testify Wednesday, Greg Varallo, an attorney for shareholder Richard Tornetta, told a court in Wilmington, Delaware, on Monday.

The trial began with Ira Ehrenpreis, a Tesla board member since 2007, taking the stand to describe the early years of the company and Musk’s role.

“I was very impressed with his vision for this endeavor,” said Ehrenpreis.

Tornetta has asked the court to rescind the pay package, which is six times larger than the top 200 CEO salaries combined in 2021, according to Amit Batish of research firm Equilar.

Musk and Tesla’s directors, who are also defendants, have denied the allegations. They argued the pay package did what it aimed to do — ensure that the entrepreneur successfully guided Tesla through a critical period, which helped drive the stock tenfold higher.

The case will be decided by Chancellor Kathaleen McCormick of Delaware’s Court of Chancery. She oversaw the legal dispute between Twitter Inc (TWTR.MX) and Musk that ended with his purchase of the social media platform for $44 billion last month.

The Tesla shareholder lawsuit argues that the pay package should have required Musk to work full-time at Tesla. The company’s shareholders have become concerned that Musk is distracted by Twitter, which he has warned might not survive an economic downturn.

Musk told a business conference on the sidelines of the G20 summit in Bali, Indonesia, on Monday that he had too much on his plate at the moment.

Legal experts said Musk is in a better legal position in the pay case than he was in Twitter’s lawsuit, which prevented him from walking away from the takeover.

Boards have wide latitude to set executive compensation, according to legal experts.

However, directors must meet more stringent legal tests if the pay package involves a controlling shareholder, and part of this trial is likely to focus on whether that description fits Musk. While he owned only 21.9% of Tesla in 2018, plaintiffs are likely to cite what is seen as his domineering personality and ties to directors.

In all, 19 witnesses are scheduled to testify, including directors and executives from 2018, compensation experts, and advisors who helped craft the pay package.

The disputed package allows Musk to buy 1% of Tesla’s stock at a deep discount each time escalating performance and financial targets are met. Otherwise, Musk gets nothing.

Tesla has hit 11 of the 12 targets as its value ballooned briefly to more than $1 trillion from $50 billion, according to court papers.

A decision will likely take around three months after the trial and could be appealed to the Delaware Supreme Court.

Reporting by Tom Hals in Wilmington, Delaware; Editing by David Gregorio and Jonathan Oatis

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Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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Business

As Musk focuses on Twitter, his $56 billion Tesla pay goes to trial

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WILMINGTON, Del., Nov 7 (Reuters) – As Elon Musk is engulfed in his overhaul of Twitter, the entrepreneur is headed to trial to defend his record $56 billion Tesla Inc pay package against claims it unjustly enriches him without requiring his full-time presence at the carmaker.

A Tesla (TSLA.O) shareholder is seeking to rescind Musk’s 2018 pay deal, claiming the board set easy performance targets and that Musk created the package to fund his dream of colonizing Mars.

Tesla has countered that the package delivered an extraordinary 10-fold increase in value to shareholders.

The trial begins Nov. 14 and will be decided by Kathaleen McCormick on Delaware’s Court of Chancery. She oversaw Twitter’s lawsuit against Musk that ended last month when he agreed to close his $44-billion deal for Twitter, an acquisition which he financed largely with his Tesla stock.

“If Musk loses this pay package in some massive way, I think we can expect to see a lot of things that are going to be really hard to predict, like what happens going forward in terms of how Tesla is run and how Twitter is paid for,” said Ann Lipton, a professor at Tulane Law School.

However, Lipton and other legal experts said the lawsuit by Tesla shareholder Richard Tornetta is going to be much more difficult than Twitter’s case against Musk.

Musk founded and is CEO of SpaceX, one of the world’s most valuable private companies, and founded or co-founded Neuralink, which makes brain implants, tunneling venture The Boring Co, and OpenAI, an artificial intelligence research lab. Last week, he appointed himself Twitter CEO.

‘PART-TIME CEO’

Tornetta’s lawyers argue the 2018 package failed its stated purpose of focusing Musk on Tesla. They portray Musk as a “part-time CEO,” citing his testimony that in 2018 he worked Tuesday, Wednesday and Friday at the electric carmaker and Monday and Thursday at rocket company SpaceX, according to his deposition.

According to the lawsuit, Tesla’s board chair Robyn Denholm said the “minimal time” Musk was at Tesla was “becoming more and more problematic” in a 2018 email to Gabrielle Toledano, who at the time was the Tesla Chief People Officer.

The company has argued the package was not about requiring Musk to punch a clock and be on site specific hours each week, but to hit “audacious” targets, enriching Musk but also shareholders like Tornetta.

[1/2] SpaceX Chief Engineer Elon Musk gestures during a joint news conference with T-Mobile CEO Mike Sievert at the SpaceX Starbase, in Brownsville, Texas, U.S., August 25, 2022. REUTERS/Adrees Latif

The disputed pay package allows Musk to buy 1% of Tesla’s stock at a deep discount each time escalating performance and financial targets are met; otherwise Musk gets nothing. Tesla has hit 11 of the 12 targets as its value ballooned to $650 billion from $50 billion on the back of ramped up Model 3 production, according to court papers.

Musk’s vested grants are worth around $50 billion, according to Amit Batish at Equilar, an executive pay research firm. The grants contribute to his $200-billion fortune, the world’s largest.

Musk’s package of stock grants is larger than the combined pay of the 200 highest-paid CEOs last year – six times over, according to Batish.

The trial is likely to focus on Tornetta’s claims the package was developed and approved by directors beholden to Musk and promoted to shareholders without revealing the first tranches were probable of being met based on internal projections.

BOARD CONTROL

Tornetta’s filings are full of examples of a board controlled by Musk.

For example, Antonio Gracias, described by the plaintiff as a close friend of Musk and who was lead independent director from 2010-19, testified in his 2021 deposition that Musk could sell Tesla if he wanted and the board could not stop him.

“Who worked for who? Does Elon Musk work for the board or does the board work for Elon Musk,” said Minor Myers, a professor at UConn School of Law.

Myers said if the pay package is rescinded, the board could simply create a new one and do so with McCormick’s ruling to guide them.

But circumstances have changed, complicating the process.

“He now owns Twitter. How do they want to factor that in?” said Myers, who added that it will be a challenge to determine how to keep Musk from being distracted by other ventures.

“How much money do they need to put in front of this guy to get his attention,” he said.

Reporting by Tom Hals in Wilmington, Delaware; additional reporting by Hyun Joo Jin in San Francisco
Editing by Noeleen Walder and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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World

Britain bets all on historic tax cuts and borrowing, investors take fright

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  • Kwarteng cuts top rate of income tax in dash for growth
  • Huge increase in UK government debt issuance planned
  • Gilts suffer biggest slump in decades
  • Pound falls to new 37-year low against dollar

LONDON, Sept 23 (Reuters) – Britain’s new finance minister Kwasi Kwarteng unleashed historic tax cuts and huge increases in borrowing on Friday in an economic agenda that floored financial markets, with sterling and British government bonds in freefall.

Kwarteng scrapped the country’s top rate of income tax, cancelled a planned rise in corporate taxes and for the first time put a price tag on the spending plans of Prime Minister Liz Truss, who wants to double Britain’s rate of economic growth.

Investors unloaded short-dated British government bonds as fast as they could, with the cost of borrowing over 5 years seeing its biggest one-day rise since 1991, as Britain raised its debt issuance plans for the current financial year by 72.4 billion pounds ($81 billion). The pound slid below $1.11 for the first time in 37 years.

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Kwarteng’s announcement marked a step change in British economic policy, harking back to the Thatcherite and Reaganomics doctrines of the 1980s that critics have derided as a return to “trickle down” economics.

“Our plan is to expand the supply side of the economy through tax incentives and reform,” Kwarteng said.

“That is how we will compete successfully with dynamic economies around the world. That is how we will turn the vicious cycle of stagnation into a virtuous cycle of growth.”

A plan to subsidise energy bills will cost 60 billion pounds just for the next six months, Kwarteng said. The government has promised households support for two years as Europe wrestles with an energy crisis.

Tax cuts – including an immediate reduction in the Stamp Duty property purchase tax plus a reversal of a planned rise in corporation tax – would cost a further 45 billion pounds by 2026/27, he said.

The government said raising Britain’s annual economic growth rate by 1 percentage point over five years – a feat most economists think unlikely – would increase tax receipts by around the same amount.

Britain also will accelerate moves to bolster the City of London’s competitiveness as a global financial centre by scrapping the cap on banker bonuses ahead of an “ambitious deregulatory” package later in the year, Kwarteng said. read more

The opposition Labour Party said the plans were a “desperate gamble”.

“Never has a government borrowed so much and explained so little… this is no way to build confidence, this is no way to build economic growth,” said Labour’s finance spokeswoman Rachel Reeves. read more

HISTORY REPEATS?

The Institute for Fiscal Studies said the tax cuts were the largest since the budget of 1972 – which is widely remembered as ending in disaster because of its inflationary effect.

The market backdrop could barely be more hostile for Kwarteng, with the pound performing worse against the dollar than almost any other major currency.

Much of the decline reflects the U.S. Federal Reserve’s rapid interest rate rises to tame inflation – which have sent markets into a tailspin – but some investors have taken fright at Truss’s willingness to borrow big to fund growth.

“In 25 years of analysing budgets this must be the most dramatic, risky and unfounded mini-budget,” said Caroline Le Jeune, head of tax at accountants Blick Rothenberg.

“Truss and her new government are taking a huge gamble.”

A Reuters poll this week showed 55% of the international banks and economic consultancies that were polled judged British assets were at a high risk of a sharp loss of confidence. read more

On Thursday the Bank of England said Truss’s energy price cap would limit inflation in the short term but that government stimulus was likely to boost inflation pressures further out, at a time when it is battling inflation near a 40-year high.

Financial markets ramped up their expectations for BoE interest rates to hit a peak of more than 5% midway through next year.

“We are likely to see a policy tug of war reminiscent of the stop-go 1970s. Investors should be prepared for a bumpy ride,” said Trevor Greetham, head of multi-asset at Royal London Asset Management.

Despite the extensive tax and spending measures, the government had decided against publishing alongside its statement new growth and borrowing forecasts from the Office for Budget Responsibility, a government watchdog.

Kwarteng confirmed the OBR would publish its full forecasts later this year.

“Fiscal responsibility is essential for economic confidence, and it is a path we remain committed to,” he said.

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Writing by Andy Bruce; Additional reporting by Kylie MacLellan, Kate Holton, Paul Sandle, Sachin Ravikumar, Alistair Smout, William James, James Davey, Andrew MacAskill, Farouq Suleiman, Huw Jones and Elizabeth Piper; Editing by Catherine Evans and Toby Chopra

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Business

Bed Bath & Beyond replaces CEO Tritton as sales sink

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June 29 (Reuters) – Bed Bath & Beyond Inc (BBBY.O) on Wednesday replaced Chief Executive Officer Mark Tritton as part of a management shake-up to reverse a slump in its business, the home goods retailer said.

Shares fell 13% in premarket trading as the company’s first-quarter net sales slumped 25%, rounding off a year of sales slipping below market expectations.

The rejig at the top management comes just a few months after activist investor and billionaire Ryan Cohen criticized the retailer for an “overly ambitious” strategy, overpaying top executives and failing to reverse market share losses.

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Cohen, who is also the chairman of GameStop Corp (GME.N), had disapproved of Tritton’s $27 million compensation over the last two years, saying it was far more than what top bosses earned at bigger retailers including Macy’s (M.N), Kohl’s (KSS.N), and Dollar Tree (DLTR.O).

An exterior view shows a Bed Bath & Beyond store in Novi, Michigan, U.S., January 29, 2021. REUTERS/Emily Elconin

“Mr. Tritton should recognize that chief executives who are awarded outsized compensation and seek frequent publicity also invite much higher expectations when it comes to growth and shareholder value creation,” Cohen said in March.

The company subsequently reached an agreement with Cohen by appointing three new directors, two of them to the committee exploring options for its baby products unit.

On Wednesday, it named the head of the strategy committee and independent director Sue Gove as Tritton’s replacement on an interim basis.

Tritton was made CEO in 2019 soon after the retailer settled with another set of activist investors who had criticized it for failing to adapt quickly to a shift in consumer preference to shop online.

Bed Bath & Beyond also replaced its chief merchandising officer Joe Hartsig with Mara Sirhal, general manager of its Harmon health and beauty stores, as it looks to overcome supply chain issues that have plagued it for most of the pandemic.

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Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur

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Business

Amazon shareholders vote against investor-led proposals

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BOSTON/NEW YORK May 25 (Reuters) – Amazon.com Inc (AMZN.O) shareholders on Wednesday voted against all investor-led resolutions that challenged the company’s policies – including its use of plastics and certain concealment clauses in contracts – at the company’s annual meeting.

A total of 15 investor resolutions were considered, including one introduced at the meeting. The figure was a record for the retail and cloud computing giant, as socially minded investors scrutinize its treatment of workers. read more

Investors voted for proposals to approve executive compensation, board members and a stock split. read more

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The boost in the number of resolutions, which Amazon recommended investors vote against, comes as tech company shareholders push for more transparency on social issues such as pay equity, workplace culture and safety, and sustainability practices.

The Amazon logo is seen outside its JFK8 distribution center in Staten Island, New York, U.S. November 25, 2020. REUTERS/Brendan McDermid

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Antoine Argouges, CEO of activist investor Tulipshare, said in a statement that the company will continue its push for workers’ rights at Amazon.

“Whilst we are disappointed that our proposal did not pass today, this vote was just the beginning in the fight for workers rights,” Argouges said.

Amazon Chief Executive Andy Jassy defended the company’s record on safety and reviewed steps it has taken to reduce injury rates ranging from new anti-slip shoes to software meant to predict and prevent repetitive stress injuries.

He conceded that injury rates could be affected by the rapid hiring of new workers during the pandemic, including about 300,000 workers in 2021 alone. “When you hire a lot of people, your (injury) rates tend to go up,” he said.

The number of proposals also reflects changes under securities regulators appointed by U.S. President Joe Biden that have made it easier for investors to file proposals and more difficult for companies to convince regulators that these resolutions should not go to a shareholder vote. read more

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Reporting by Ross Kerber in Boston, Arriana McLymore in New York and Eva Mathews in Bengaluru
Additional reporting by Simon Jessop in London
Editing by Peter Henderson and Matthew Lewis

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Arriana McLymore

Thomson Reuters

Arriana McLymore reports on the business of law, including diversity in the profession, corporate practices, legal education and attorney career life cycles.

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Business

Berkshire shareholders vote to keep Buffett as chairman, reject climate disclosures

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OMAHA, Neb., April 30 (Reuters) – Berkshire Hathaway Inc (BRKa.N) shareholders on Saturday rejected proposals to have an independent chair replace Warren Buffett, and require his company to disclose more about its climate-related risks and efforts to improve diversity.

Shareholders supported letting Buffett keep both the chairman and chief executive roles by a nearly 6-to-1 margin, Berkshire said at its annual meeting in Omaha, Nebraska.

Buffett, 91, has run Berkshire since 1965.

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The National Legal and Policy Center, a Berkshire shareholder, had said it was poor corporate governance for the legendary investor to retain both roles.

Its proposal gained greater attention when Calpers, which invested $460 billion on April 28 and is the largest U.S. public pension fund, expressed support, as it has at other companies.

Berkshire’s board, however, said Buffett should keep both roles. Buffett’s oldest son Howard Buffett, a Berkshire director, is expected to become non-executive chairman when his father is no longer in charge.

By approximately 3-to-1 margins, shareholders also rejected proposals to have the company disclose more about the climate-related risks, greenhouse gas emissions and diversity efforts in its dozens of businesses.

Berkshire’s board also opposed those proposals, saying its operating businesses already disclosed or appropriately managed environmental risks, and were committed to diversity, equity and inclusion.

The proposals faced long odds to pass, given Buffett’s control of 32% of Berkshire’s voting power. He owns approximately 16% of Berkshire’s stock.

Berkshire’s slate of 15 people to serve as directors won shareholder approval by an overwhelming margin.

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Reporting by Carolina Mandl and Jonathan Stempel in Omaha, Nebraska
Editing by Nick Zieminski

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Business

Intel CEO earned 1,711 times more than average company worker in 2021

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March 30 (Reuters) – Intel Corp (INTC.O) Chief Executive Officer Pat Gelsinger earned 1,711 times as much as the average worker at the U.S. chipmaker in just 11 months since he joined in February last year, a regulatory filing showed on Wednesday.

Compared to Gelsinger, former CEO Bob Swan had earned 217 times more than the average Intel employee in 2020.

Gelsinger earned $178.6 million in 2021 with stock awards making up nearly 79% of his total compensation, which was about 698% higher than Swan’s 2020 pay.

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Executive pay has been rising in the United States. Apple Inc (AAPL.O) CEO Tim Cook earned 1,447 times the average employee’s salary at the tech giant in 2021. Shareholders of Apple approved the pay package despite proxy advisory firm Institutional Shareholder Services pushing against it.

Intel has asked shareholders to vote in favor of its executives’ compensation at the annual stockholder’s meeting on May 12. It did not immediately respond to a Reuters request for comment.

After Gelsinger took the reins at Intel, once a world leader in chip-making technology, he unveiled a turnaround strategy for the company to regain its dominance in the semiconductor industry, currently led by Taiwan’s Taiwan Semiconductor Manufacturing Co (2330.TW).

Intel’s shares rose 6.8% last year after declining about 17% the year before as the company faced a manufacturing crisis and struggled with competition. The shares were up 0.3% at $52.41 on Wednesday.

Earlier this month, Intel laid out the first details of a $88 billion investment plan spanning across six European Union countries including a massive investment in Germany. read more

Gelsinger was CEO of VMWare Inc (VMW.N) before he returned to Intel as its top boss. He had spent 30 years at Intel before leaving.

His compensation included one-time new-hire equity awards with a target value of about $110 million, according to the filing.

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Reporting by Chavi Mehta in Bengaluru; Editing by Shinjini Ganguli

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Business

Deutsche Bank to wind down in Russia, reversing course after backlash

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  • Deutsche CEO had said exit ‘would go against our values’
  • Investors criticised Deutsche’s Russia presence
  • CEO’s 2021 pay up 20%

FRANKFURT, March 11 (Reuters) – Deutsche Bank (DBKGn.DE), which faced stinging criticism from some investors and politicians for its ongoing ties to Russia, said on Friday in a surprise move that it would wind down its business in the country.

Deutsche joins the ranks of Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), which were the first major U.S. banks to exit after Moscow’s invasion of Ukraine. Those moves put pressure on rivals to follow. read more .

Deutsche had resisted pressure to sever ties, arguing that it needed to support multinational firms doing business in Russia.

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But on Friday evening in Frankfurt, the bank suddenly reversed course.

“We are in the process of winding down our remaining business in Russia while we help our non-Russian multinational clients in reducing their operations,” the bank said.

“There won’t be any new business in Russia,” Deutsche said.

A day earlier, Deutsche Bank’s Chief Executive Christian Sewing explained to staff why the bank was not withdrawing.

“The answer is that this would go against our values,” he wrote. “We have clients who cannot exit Russia overnight.”

Bill Browder, an investor who has spent years campaigning to expose corruption in Russia, said that Deutsche Bank staying was “completely at odds with the international business community and will create backlash, lost reputation and business in the West.”

“I would be surprised if they are able to maintain this position as the situation in Ukraine continues to deteriorate,” Browder told Reuters earlier on Friday.

The criticism came as Russian forces bearing down on Kyiv were regrouping northwest of the Ukrainian capital and Britain said that Moscow could now be planning an assault on the city within days. read more

Fabio De Masi, a former member of the Bundestag and a prominent campaigner against financial crime, said that Deutsche Bank had close ties to the Russian elite, many of whom faced sanctions and that the relationship, where it involved criminal Russian activity, had to end.

‘MONITORING’

Deutsche Bank has said that it has pared down its Russian footprint in recent years. This week it disclosed 2.9 billion euros in credit risk to the country, and said exposure is “very limited”. read more

It also operates a technology centre with about 1,500 employees in Russia and opened a new main office in Moscow in December, which it said at the time represented “a significant investment and commitment to the Russian market”.

Russia has landed Deutsche Bank in hot water in the past.

The U.S. Department of Justice has been investigating it for years over trades that authorities said were used to launder $10 billion out of Russia, which has led to the German bank being fined nearly $700 million.

Deutsche Bank said on Friday that the DOJ probe “is understood to be ongoing”.

The row over Russia came as Deutsche Bank disclosed in its annual report that it paid Sewing 8.8 million euros ($9.68 million) in 2021, a 20% increase from a year earlier.

Overall, the lender paid 14% more, or 2.1 billion euros, in bonuses for 2021, rewarding staff for the bank’s most profitable year in a decade.

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Reporting by Tom Sims, John O’Donnell and Frank Siebelt; additional reporting by Carolyn Cohn; editing by Miranda Murray, Jason Neely, Alexander Smith and Chizu Nomiyama

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