Sustainvest Annual Naughty and Nice List 2016

With the close of 2016 approaching, it’s that time again where we can sit back and think about what an “interesting” year it has been. In fact, just the news of Brexit and the rather surprising US election results would have been plenty to sit and ponder over some spiked egg nog.  Regardless, below is our top 4 naughty and top 4 nice corporate happenings to bring lively conversation to the holiday party.

NAUGHTY

  1. We all can’t stand paying that $3.00 ATM fee. But imagine paying fees on an account you didn’t even sign up for. Wells Fargo was caught opening over 1.5 million accounts that were not authorized. Wells also fired 5,300 employees related to the shady behavior. Since the scandal, CEO John Stump (who agreed to not receive the $41 million in unvested options—thanks!) has stepped down from both the CEO role and Chairman of the Board. New customer checking account openings plunged 41% in November compared with last year. Note that Wells has stated the CEO can no longer also be the chairman of the board, clearly a rule that could have helped them with this debacle.

2. Increasing the price of a service or good over 600% would generally cause the buyer to simply stop buying. But when the convoluted world of pharmaceuticals is involved, it seems to be the norm. Enter the Epipen and Mylan Pharmaceutical CEO Heather Bresch (pic above). As Bresch spiked the cost of the EpiPen, which is used to help children who experience allergic reactions, her own compensation increased 671 percent, from about $2.5 million, in 2007, to some $18.9 million, in 2015. Mylan has agreed to fork over $465 million to make up for years of underpaid Medicaid rebates on the product. They are also in the midst of laying off about 10% of their workforce.

 

  1. Got a friend at JPMorgan? JPMorgan Chase & Co will pay $264 million to the US government to settle allegations that it had hired the children and relatives of influential Chinese policymakers in the hope of winning their business. The settlement follows a three-year investigation. The practice of giving the children of China’s ruling class easy jobs was so common that the bank had a program known as “Sons and Daughters.” The program included spreadsheets that tracked how often the hires turned into money-making business deals. Somehow CEO Jamie Dimon still has a job and is now a member of President-elect Trump’s economic advisory team. Hmm?

 

  1. The big pharmas sure know how to pay themselves. This final spot goes to Leonard Schleifer of Regeneron Pharmaceuticals. He netted about $47 million up from $42 million last year.  To put that in perspective with a 5-day, 40-hour work week, Schleifer would make more than $22,800 an hour; $182,000 a day; and $910,000 a week. As of December 19th, the stock’s year to date performance was negative 30%. Yes, that’s negative.  Something tells me that Regeneron’s compensation package needs some old-fashioned tweaking.

NICE

  1. We have all heard of the evil oil-congested Carbon Underground 200, but what about the good guys? Non-profits, As You Sow and Corporate Knights came up with the flipside version called the Clean 200.  And the winner is Toyota!  Companies eligible for the Clean 200 must have a market capitalization of at least $1 billion and derive at least 10 percent of their revenue from clean energy as defined by Bloomberg New Energy Finance (BNEF). Second to Toyota was Siemens while Johnson Controls came in 3rd.

 patagonia-labeled-ok-for-reuse-with-mod

  1. Instead of opening up its stores all day for employees to work on Turkey Day, Patagonia instead decides to donate all profits to environmental charities. Can you top that!? The apparel company donated $10 million in Black Friday sales to charity. Instead of donating to just one charity, however, Patagonia will give money to “hundreds of grassroots environmental organizations.” The activewear company only projected $2 million in sales and they were “humbled” by the actual number of sales. Patagonia is not a publicly traded stock. Shucks.

 

  1. Take that United States! At 648 megawatts, India and the Adani Group has opened the largest solar plant in the world. The plant will power 150,000 homes and is a step closer to making the country fully sustainable. Facing a growing population, India’s goal is to produce 40 percent of its energy through renewable resources by 2030. The world’s second largest solar plant, the Topaz Solar Farm in San Luis Obispo County, California, has a capacity of 550 megawatts. I sense a little friendly alternative energy competition to build the first 1000 megawatt station?

 

  1. How about a positive note for the big pharmas. Fortune Magazine unveiled its 2016 “Change the World” roster of 50 companies who focused on social and environmental challenges. Topping the list is pharma firm GlaxoSmithKline, where basing drug prices on income levels in the countries where it operates and reinvests 20% of any profits it makes in the least developed countries into training health workers and building medical infrastructure. On top of this, its CEO made a fraction of what the aforementioned drug pushing CEOs made.

Happy Holidays from Sustainvest!

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About Dale Wannen