Two activists and a vocal founder were enough for Starbucks’ Board Chair, Mellody Hobson, to sail down the Pacific Coast and grab a latte with Brian Niccol, the well-respected CEO of Chipotle, to right the ship at the iconic coffee chain. Both Elliott and Starboard praised the appointment of Mr. Niccol but didn’t foreswear a fight or a push for board seats. Starbucks’ founder and former CEO, Howard Schultz, also gave Niccol his thumbs up…after being unusually vocal about company leadership on LinkedIn and the we-can’t-get-enough of Acquired podcast.

Given the unique situation — the founder and two of the most-feared activists — the Board deftly threaded the needle of upgrading the CEO while making it harder for activists to throw their weight around. Based on Niccol’s track record, the Board couldn’t have hired a better retail fast-food executive tasked with restoring growth, addressing labor issues and the stock price (buoyed by his news).



It reminds us a little bit of what happened when Best Buy founder Dick Schulze was scorned and made a bid for the company he once led. After the Board hired Hubert Joly as its new CEO, among the first things that Joly did was make peace with Schulze, whose name adorned a Town Hall-style room at Best Buy’s headquarters. Niccol’s diplomatic skills with Schultz will be as important as his barista know-how.

Not one to be distracted, Elliott is coming in for a hard landing at Southwest. Axios’ Mike Flaherty reported on Wednesday that the activist has put forward a 10-person slate of nominees to the airline’s board in addition to pushing to replace the CEO and Chairman. Writing for Reuters Breakingviews, Jeffrey Goldfarb pointed out that while “rabble-rousing” Elliott hasn’t run a proxy battle in the U.S. since 2017, replacing any of Southwest’s directors will be a tall order as it would require 50% support from all outstanding shares rather than just a simple majority vote. It may have been a while, but no need to teach old dogs new tricks.

Speaking of tricks, the newsletter will be taking a break for the next two weeks to soak up the end of summer as GPP goes remote (but always on).

See you all after Labor Day,

GPP team 

CNBC: Whale Watching in the Markets: Firms Release Q2 13F Filings

The ‘Squawk Box’ team recaps some of the moves major activist funds and portfolio managers made in their 13F filings, including Pershing Square’s position in Nike and Carl Icahn’s in Caesars. Read More

M&A

Reuters: Mars to Buy Pringles Maker Kellanova for $36B in 2024’s Biggest Deal

We tip our hat to Reuters which had the scoop of the month with its beat on Mars-Kellanova. Anirban Sen, Jess DiNapoli and Abigail Summerville dive into the biggest deal of the year to-date, which will put iconic snack brands ranging from M&Ms to Pringles under one roof. Mars will finance its take-private acquisition of the Kellogg spinoff through a $29 billion bridge loan from JP Morgan and Citi. Read More

Bloomberg: Carlyle to Buy Baxter’s Kidney-Care Unit for $3.8B

As healthcare companies simplify their operations and focus on precise drug development, Baxter International announced it will sell off its kidney-care unit called Vantive to Carlyle Group and pay down debt, writes John Lauerman. Read More

CORPORATE GOVERNANCE

The Wall Street Journal: Why AI Risks Are Keeping Board Members Up at Night

Emily Glazer cites concerns from public boards over the rapid rise of AI usage by employees, including inserting proprietary code into chatbots like ChatGPT, using AI that incorrectly sources content and AI providing false or inaccurate information. Consequently, board members and management teams are working to strike a balance between how to leverage the technology for greater efficiencies and innovation while managing the associated risks. Read More

Harvard Law School Forum on Corporate Governance: Under Pressure—Rethinking Board Practices

Partners from Jones Day reimagine how boards should consider modifying their operations to be more productive, such as optimizing and creating new sub-committees, establishing director mentorship programs, reconsidering board resources and commitments and paying more attention to director communications. Read More

FROM OUR DESK TO YOURS

This week, we attended the book party for “Billionaire, Nerd, Savior, King,” a new profile of Bill Gates by The New York Times’ Anupreeta Das. The book is based on Preeta’s deep reporting through all aspects of Gates’ life – from launching Microsoft to delving into philanthropy – and it’s one of our end-of-summer beach reads as we enter our remote weeks in August.

GPPers were able to squeeze in a performance of Sufjan Stevens’ dance musical Illinoise days before the strictly limited engagement concluded last Sunday at the St. James Theatre. The show, which is entirely dialogue-less, featured the expressive and varied choreography of Tony Award winner Justin Peck, who was able to beautifully tell tales of family, myth and growing through movement. While the show is no longer on Broadway, we recommend taking a listen to Stevens’ 2005 “indie opus.”

As we approach the (lobster) tail end of summer, we’d be remiss not to highlight The New York Times’ story about the enduring debate over a beloved summer staple, the lobster roll. While we’ll leave it to our readers to decide whether Maine or Connecticut style reigns supreme, either should be accompanied by fries, seasoned with Old Bay, to which the New Yorker’s Casey Cep has written “An Ode.”  

PEOPLE MOVES

• Goldman partner and head of the firm’s financial sponsors group David Kamo departed for a role at Evercore. Read More
• Dwight Scott, Chairman of Blackstone’s Credit and Insurance arm will retire from the firm at year end. Read More

• September 9-11: Council of Institutional Investors 2024 Fall Conference, Brooklyn 

• Local NYC Events:
• Through August 17: Celebrate Brooklyn Concert Series in Prospect Park
• Through August 18: NYC Restaurant Week
• August 26 – September 8: US Open Tennis Championships
• Through September 6: Festival of Free Shakespeare in the Park
• September 8: Wine on Wheels Annual Grand Tasting