The Manhattan district attorney’s office is expected to charge the Trump Organization and its chief financial officer with tax-related crimes on Thursday, people familiar with the matter said, which would mark the first criminal charges against the former president’s company since prosecutors began investigating it three years ago.
The charges against the Trump Organization and Allen Weisselberg, the company’s longtime chief financial officer, are a blow to former President Donald Trump, who has fended off multiple criminal and civil probes during and after his presidency. Mr. Trump himself isn’t expected to be charged, his lawyer said. Mr. Weisselberg has rejected prosecutors’ attempts at gaining his cooperation, according to people familiar with the matter.
The defendants are expected to appear in court on Thursday afternoon, the people said.
The Trump Organization and Mr. Weisselberg are expected to face charges related to allegedly evading taxes on fringe benefits, the people said. For months, the Manhattan district attorney’s office and New York state attorney general’s office have been investigating whether Mr. Weisselberg and other employees illegally avoided paying taxes on perks—such as cars, apartments and private-school tuition—that they received from the Trump Organization.
If prosecutors could show the Trump Organization and its executives systematically avoided paying taxes, they could file more serious charges alleging a scheme, lawyers said.
Hilton Worldwide Holdings Inc. Chief Executive Chris Nassetta worked from home in Arlington, Va., with his wife, six daughters and two dogs for two weeks before returning to the hotel chain’s nearly empty headquarters for the rest of the past year. Sharmistha Dubey has been leading Match Group Inc. from her dining room table near Dallas. Herman Miller ’s Andi Owen has her dog Finn to keep her company while working from her home office in Grand Rapids, Mich. Moderna Inc. CEO Stéphane Bancel relishes twice-daily 30-minute walks between his home in Boston and the vaccine maker’s Cambridge offices, where he resumed working in August, so he can crystallize his priorities and reflect on the day. The Wall Street Journal photographed them and 11 other business leaders in their pandemic office spaces as they discussed the past year and what’s to come.
More than a year after the coronavirus upended the way we work, the business leaders said they have found that more communication, flexibility and transparency have been crucial in staying connected to their employees.
Heads of companies across sectors including finance, hospitality and technology spoke from their current workspaces about what they’ve learned from the largely remote year, what challenges they faced and what changes they plan to leave in place during the next phase of work.
Brad Karp, chairman of the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, predicted his schedule will remain less hectic after the pandemic is over: “Personally, I can’t see myself reflexively flying cross-country for an hour-long presentation or meeting.”
Pfizer Inc. aims to expand its vaccine business by becoming a leader in the new gene-based technology behind its successful Covid-19 shots.
Pfizer will develop new shots using the technology, called mRNA, to target other viruses and pathogens beyond the coronavirus, Chief Executive Albert Bourla said in an interview. He said the company’s scientists and engineers gained a decade’s worth of experience in the past year working on the Covid-19 vaccine with Germany’s BioNTech SE , and is ready to pursue mRNA on its own.
“There is a technology that has proven dramatic impact and dramatic potential,” Mr. Bourla said. “We are the best positioned company right now to take it to the next step because of our size and our expertise.”
Pfizer will increase R&D in the technology, including adding at least 50 employees whose assignments will include mRNA, and it will harness the new mRNA manufacturing network it assembled in the past year to compete.
“We are now ahead and we plan to maintain the gap,” he said of the mRNA vaccine market.
The head of Jeep’s owner said he is open to dropping the Cherokee name from vehicles after recent criticism from the Native American tribe’s leader.
Carlos Tavares,
chief executive officer of the recently formed
Stellantis
STLA -2.71%
NV, said the company was engaged in dialogue with the Cherokee Nation over its use of the name. Jeep has two models, the Cherokee compact sport-utility vehicle and larger Grand Cherokee, that it sells in the U.S. and beyond.
Asked in an interview if he would be willing to change the Jeep Cherokee’s name if pushed to do so, Mr. Tavares said, “We are ready to go to any point, up to the point where we decide with the appropriate people and with no intermediaries.”
“At this stage, I don’t know if there is a real problem. But if there is one, well, of course we will solve it,” Mr. Tavares said, adding that he wasn’t personally involved in the talks.
Debate over the Cherokee name is among the issues facing Mr. Tavares, who took control of Stellantis when it was formed earlier this year from the merger of Fiat Chrysler Automobiles NV and Peugeot-maker PSA. In the interview Wednesday, Mr. Tavares also discussed whether to cut down on the company’s 14 brands, making Fiat plants more competitive and his plan to stick with China.
Jeep has two models, the Cherokee compact SUV and larger Grand Cherokee, that it sells in the U.S. and beyond.
Photo:
FCA/TNS/Abaca Press/Reuters
The Cherokee Nation is the largest Native American tribe in the U.S., with some 370,000 members, and Jeep has sold millions of vehicles named after it. The auto brand extended its use of the Cherokee name to a compact SUV, a smaller version of the Grand Cherokee, in 2013.
The leader of the Cherokee Nation recently said he would like to see Jeep stop using his tribe’s name on its SUVs.
Chuck Hoskin Jr.,
principal chief of the Cherokee Nation, said that he believed Jeep had good intentions but that “it does not honor us by having our name plastered on the side of a car,” according to a statement first released to Car and Driver last week.
“The Cherokee Nation has an open dialogue with Stellantis leadership, and look forward to ongoing discussions,” a spokesman for the tribe said Wednesday. “We appreciate Stellantis’ reaching out and thoughtful approach on this.”
“
‘It does not honor us by having our name plastered on the side of a car.’ ”
— Chuck Hoskin Jr., principal chief of the Cherokee Nation
Mr. Tavares’s remarks come in the wake of a broad reckoning over racial and social injustice in the U.S. that was sparked by the police killing of
George Floyd,
an unarmed Black man, in Minneapolis over Memorial Day weekend last year. In December, the Cleveland Indians decided to drop the baseball team’s longtime nickname after fans and Native American groups criticized it as racist. The Washington Football Team of the NFL has dropped a name that had been seen as a racial slur.
The Jeep Cherokee and Grand Cherokee SUVs are among the brand’s bestsellers in the U.S., accounting for 43% of Jeep’s sales in its largest market, according to company figures. Stellantis is rolling out a long-awaited redesign of the Grand Cherokee later this year.
Mr. Tavares said the auto industry’s practice of naming cars after Native American tribes was a sign of respect.
“I don’t see anything that would be negative here. I think it’s just a matter of expressing our creative passion, our artistic capabilities,” Mr. Tavares said.
The Jeep brand sits alongside profit-drivers like Ram in the U.S. and Peugeot in Europe. But the company’s sprawling portfolio of 14 brands also includes some that will need to prove their worth, Mr. Tavares said.
Mr. Tavares said he has asked each of his brand chiefs to work on a 10-year plan to develop more long-term visibility on product planning.
“I’m saying, ‘Look guys, I’m going to give you a chance. You need to convince me—you, the brand CEO—that you have a vision,’” Mr. Tavares said.
After several turnaround efforts, Fiat Chrysler’s Alfa Romeo and Maserati brands have failed to mount meaningful comebacks in recent years. The Fiat brand struggles with aging models and weak sales, which has caused an overcapacity problem in the company’s Italian factories.
Even the storied Chrysler brand has waned in recent years, now selling only three models compared with the six it carried a decade ago. The brand’s U.S. sales have also slid to one-third their volume in 2015, according to company figures.
On the PSA side, the DS brand—which focuses on high-end sedans and SUVs—grew market share last year but continues to lag far behind some of its German competitors.
“After we give them a chance to fail, we need to be also fair,” Mr. Tavares said. “If the rest of the company is doing the right things and there is one part of the company that is pulling everybody down, we’ll have to take that into consideration.”
The Portuguese executive built his reputation in the automotive industry as a turnaround expert. Peugeot was bleeding money when it hired Mr. Tavares in 2013. Since then the French car maker has gone from losing 5 billion euros, equivalent to about $6 billion, in 2012 to becoming one of the most profitable mass-market car makers in the industry. Last year it reported a net profit of €2.17 billion, or roughly $2.62 billion, with an adjusted operating margin of 7.1% in its core automotive business.
This time, Mr. Tavares has a longer to-do list, including integrating the two companies’ European businesses and stemming losses in China.
In Europe, Mr. Tavares has been visiting Fiat Chrysler factories—including an Alfa Romeo facility 80 miles south of Rome—and encouraging them to benchmark their performance against PSA plants. Additionally, employees from Fiat Chrysler’s Fiat factory in Mirafiori, Italy, visited PSA’s Citroën’s plant in Madrid, and Mr. Tavares said they were surprised by the nonlabor cost savings they observed.
The auto executive said the new company could reach its cost-saving goals in Europe without closing factories.
Asked what lessons he had learned from the chip shortage that has idled car plants across the world, Mr. Tavares said large suppliers didn’t relay signals they were receiving about the looming crisis. “We were not protected,” he said. “That’s a clear lesson learned.”
Chinese regulators are taking a close look at Tesla operations after recent videos on social media appear to show a Model 3 battery fire and malfunctioning vehicles. WSJ explains how possible quality issues with Tesla cars could threaten the EV-maker’s meteoric rise. Photo Illustration: Michelle Inez Simon
Mr. Tavares said the industrywide shift toward electrification would continue to rely on government subsidies and other financial incentives for buyers until auto makers figure out how to lower production costs over the next few years.
“If we propose electric vehicles which are extremely efficient but nobody can buy because they are costly, what’s the point from an environmental perspective?” he said.
In China, the combined sales of Peugeot and Fiat Chrysler accounted for less than 1% of a market that sold 20 million vehicles last year, according to industry data. Fiat Chrysler has long struggled to turn a profit in the world’s largest automotive market, while the French car maker sold only 45,965 vehicles in China last year, continuing a rapid multiyear decline.
Mr. Tavares said Stellantis isn’t considering exiting China, removing an option that he said was still on the table when the company started trading in New York at the start of this year.
“We cannot be away from the biggest market in the world,” he said.
Write to Nick Kostov at Nick.Kostov@wsj.com and Nora Naughton at Nora.Naughton@wsj.com
spoke about combining the oil giants after the pandemic shook the world last year, according to people familiar with the talks, testing the waters for what could be one of the largest corporate mergers ever.
Chevron Chief Executive
Mike Wirth
and Exxon CEO
Darren Woods
discussed a merger following the outbreak of the new coronavirus, which decimated oil and gas demand and put enormous financial strain on both companies, the people said. The discussions were described as preliminary and aren’t ongoing but could come back in the future, the people said.
Such a deal would reunite the two largest descendants of
John D. Rockefeller’s
Standard Oil monopoly, which was broken up by U.S. regulators in 1911, and reshape the oil industry.
A combined company’s market value could top $350 billion. Exxon has a market value of $190 billion, while Chevron’s is $164 billion. Together, they would likely form the world’s second largest oil company by market capitalization and production, producing about 7 million barrels of oil and gas a day, based on pre-pandemic levels, second only in both measures to Saudi Aramco.
But a merger of the two largest American oil companies could encounter regulatory and antitrust challenges under the Biden administration. President Biden has said climate change is one of the biggest crises the country faces. In October, he said he would push the country to “transition away from the oil industry.” He hasn’t been as vocal about antitrust matters, and the administration has yet to nominate the Justice Department’s head of that division.
One of the people familiar with the talks said the sides may have missed an opportunity to consummate the deal under former President
Donald Trump,
whose administration was seen as more friendly to the industry.
Darren Woods, CEO Exxon Mobil Corp., at an industry conference in 2018
Photo:
Andrew Harrer/Bloomberg News
A handful of sizable oil and gas deals were completed last year, including Chevron’s $5 billion takeover of Noble Energy Inc. and
ConocoPhillips
COP -2.63%
’ roughly $10 billion takeover of Concho Resources Inc., but nothing close to the scale of combining San Ramon, Calif.-based Chevron and Irving, Texas-based Exxon.
Such a deal would significantly surpass in size the mega-oil-mergers of the late 1990s and early 2000s, which included the combination of Exxon and Mobil and Chevron and Texaco Inc.
It also could be the largest corporate tie-up ever, depending on its structure. That distinction currently belongs to the roughly $181 billion purchase of German conglomerate Mannesmann AG by Vodafone AirTouch Plc in 2000, according to Dealogic.
Many investors, analysts and energy executives have called for consolidation in the beleaguered oil-and-gas industry, arguing that cutting costs and improving operational efficiencies would help companies weather the pandemic-induced downturn and prepare for an uncertain future as many countries seek to reduce their dependence on fossil fuels to combat climate change.
In an interview discussing Chevron’s earnings Friday, Mr. Wirth, who like Mr. Woods also serves as his company’s board chairman, said that consolidation could make the industry more efficient. He was speaking generally and not about a possible Exxon-Chevron merger.
“As for larger scale things, it’s happened before,” Mr. Wirth said, referring to the 1990s and early-2000s megamergers. “Time will tell.”
Paul Sankey,
an independent analyst who hypothesized a merger of Chevron and Exxon in October, estimated at the time that the combined company would have a market capitalization of about $300 billion and $100 billion in debt. A merger would allow them to cut a combined $15 billion in administrative expenses and $10 billion in annual capital expenditures, he wrote.
An abundance of fossil fuels combined with advances in technology to harness wind and solar power has sent energy prices crashing around the world. WSJ explains how it all happened at once. Photo illustration: Carlos Waters/WSJ
Exxon was America’s most valuable company seven years ago, with a market value of more than $400 billion, nearly double Chevron’s. But Exxon has fallen from its heights following a series of strategic missteps, which were further exacerbated by the pandemic. It has been eclipsed as a profit engine by tech giants such as
Apple Inc.
AAPL -3.74%
and
Amazon.com Inc.,
AMZN -0.97%
in recent years and was removed from the Dow Jones Industrial Average last year for the first time since it was added as Standard Oil of New Jersey in 1928.
Exxon’s shares have fallen nearly 29% over the last year, while Chevron’s are down about 20%. Chevron briefly topped Exxon in market capitalization in the fall.
Exxon endured one of its worst financial performances ever in 2020. It is expected to report a fourth consecutive quarterly loss for the first time in modern history on Tuesday and already has posted more than $2 billion in losses through the first three quarters of 2020.
Chevron also has struggled, reporting nearly $5.5 billion in 2020 losses Friday. But investors have expressed more faith in Chevron because it entered the downturn with a stronger balance sheet—in part because it walked away from its $33 billion bid to buy Anadarko Petroleum Corp. before the pandemic, having been outbid by
Occidental Petroleum Corp.
OXY -4.25%
in 2019.
Exxon has about $69 billion in debt as of September, while Chevron has around $35 billion, according to S&P Global Market Intelligence.
Some investors have grown increasingly concerned about Exxon’s direction under Mr. Woods as the company faces a rapidly changing energy industry and growing global consciousness about climate change. Some are also worried that Exxon may have to cut its hefty dividend, which costs it about $15 billion annually, due to its high debt levels. Many individual investors count on the payments as a source of income.
Mr. Woods embarked on an ambitious plan in 2018 to spend $230 billion to pump an additional one million barrels of oil and gas a day by 2025. But before the pandemic, production was up only slightly and Exxon’s financial flexibility was diminished. In November, Exxon retreated from the plan and said it would cut billions of dollars from its capital spending every year through 2025 and focus on investing in only the most promising assets.
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Meanwhile, the company’s woes have helped draw the attention of activist investors. One of them, Engine No. 1 LLC, has argued that the company should focus more on investments in clean energy while cutting costs elsewhere to preserve its dividend. The firm nominated four directors to Exxon’s board Wednesday and called for it to make strategic changes to its business plan.
Exxon also has been in talks with another activist, D.E. Shaw Group, and is preparing to announce one or more new board members, additional spending cuts and investments in new technologies to help it reduce its carbon emissions.
Rivals such as
BP
BP -2.80%
PLC and
Royal Dutch Shell
RDS.A -3.53%
PLC have embarked on bold strategies to remake their business as regulatory and investor pressure to reduce carbon emissions mounts. Both have said they will invest heavily in renewable energy—a strategy that their investors so far haven’t rewarded.
Exxon and Chevron haven’t invested substantially in renewables, instead choosing to double down on oil and gas. Both companies have argued that the world will need vast amounts of fossil fuels for decades to come, and that they can capitalize on current underinvestment in oil production.
Write to Christopher M. Matthews at christopher.matthews@wsj.com, Emily Glazer at emily.glazer@wsj.com and Cara Lombardo at cara.lombardo@wsj.com
Leon Black plans to step down as chief executive of Apollo Global Management Inc. after an independent review revealed larger-than-expected payments to disgraced financier Jeffrey Epstein that it nevertheless deemed justified.
The monthslong review by Dechert LLP found no evidence that Mr. Black was involved in the criminal activities of the late Epstein, who was indicted in 2019 on federal sex-trafficking charges involving underage girls, according to a copy of the law firm’s report that was viewed by The Wall Street Journal.
In its report, Dechert found the fees that the billionaire had paid Epstein were for legitimate advice on trust- and estate-tax planning that proved to be of significant value to Mr. Black and his family. Mr. Black paid Epstein a total of $148 million, plus a $10 million donation to his charity—far more than was previously known.
Mr. Black wrote in a letter to Apollo’s fund investors that he would cede the role of CEO to co-founder Marc Rowan on or before his 70th birthday on July 31 while retaining the role of chairman. In the letter, a copy of which was viewed by the Journal, Mr. Black detailed other governance changes he is recommending to the board, including the appointment of more independent directors and the elimination of Apollo’s dual-class share structure.
Mr. Black also pledged to donate $200 million of his family’s money to women’s initiatives.