Dinner is about to begin. Please take your seats. Let's save the speeches for later in the evening - and we're going to keep them brief this year. That includes you, Bill Ackman.
As 2015 comes to an end, it's time for DealBook's annual Closing Dinner, a Wall Street ritual that may seem to be a vestige of a different era in the face of recently announced layoffs and continued cost-cutting. To reflect this new thrifty environment, we've asked Chipotle to cater. (Fingers crossed.)
Of course, the biggest challenge in organizing this dinner is the seating assignments and the requests that come in from all of those persnickety executive assistants. The health care table, which is usually straightforward, was especially tricky this year. For example, I was told that the executive team from Valeant did not want to be seated at the same table with Martin Shkreli, the drug company executive arrested and charged with securities fraud this month. Something about "optics." (Shkreli has pleaded not guilty.) And finding a seatmate for Elizabeth Holmes, whose blood-testing start-up, Theranos, has come under scrutiny, also proved challenging. We settled on seating her next to her lawyer, David Boies, a
Then we had to contend with the seating assignments for the activist investors table, which we usually keep in the back because it often gets so rowdy. This year, given their newfound prominence in the boardroom, we've moved the table to the front. Carl Icahn has assured me he's going to going to keep it "classy" and has invited two guests: Tim Cook, the chief executive of Apple, one of Icahn's biggest stock positions, and his friend Donald Trump, who has pledged to make Icahn secretary of the Treasury if he wins the presidency. (Really, this is not a joke.)
We've also got the unicorn table this year, which includes Travis Kalanick of Uber and Brian Chesky of Airbnb. The Silicon Valley executives are seated next to Mayor Bill de Blasio, who has been squabbling with Airbnb and appeared to capitulate in his battle with Uber earlier this year. The mayor, still stinging over mocking him by name in its app, grudgingly agreed to sit next to Kalanick. But he was excited to chat with Chesky and float his idea for a new revenue stream for the city by renting out his Yalie son's empty bedroom via Airbnb.
Finally, there's the Giving Pledge table in the very front: Mark Zuckerberg, who announced plans to give away 99 per cent of his Facebook stock, just as his role models Warren Buffett and Bill and Melinda Gates are doing with their wealth. He got dinged by critics for using a limited liability company structure rather than a traditional nonprofit. But give the guy a break, he's going to give away billions. Happily, Zuckerberg also generously agreed to pick up the Chipotle bill tonight, and he's even springing for the guacamole. (Yes, we know, guacamole is extra.)
Finally, with Trump in attendance, we decided to balance things out by inviting Hillary Clinton and Bernie Sanders. We placed Clinton at the table with Wall Street chief executives. Sanders sat alone.
Now on to the toasts and roasts as we look back on 2015 and look ahead to the new year:
Cheers, Yellen
The Federal Reserve chairwoman, Janet Yellen, seated on the dais, has been repeatedly criticized by many Wall Street players for not raising interest rates fast enough. Yet she held firm and took her time until she believed she could raise rates without causing a three-alarm panic. She did it in December, just as she said she would, and the market did, well, next to nothing - which was exactly her goal. It is hard to imagine it going much smoother, given all the consternation around a raise over the last two years. Could it have happened sooner? Perhaps. But we'll never know. What we do know is that so far, during her first two years at the helm, Yellen seems to be steering the ship carefully and confidently. It is too soon to say whether her policies will prove successful, but so far, kudos are in order.
Don't hold your breath
Just when we thought tax inversion deals had been slowed by new rules from the Treasury Department, we got the biggest inversion deal in history: Pfizer buying Allergan for $150 billion. Through all sorts of financial sleight of hand and legal maneuvering, Allergan, the far smaller company, will end up buying Pfizer, with the combined company claiming residency in Ireland. It's easy to be cynical about the deal and call Pfizer unpatriotic - and I have! - but the real culprit is the nation's byzantine corporate tax system, which hasn't been significantly updated since 1986. That doesn't make sense.
Both Democrats and Republicans have argued that we need to reform the tax system, and both sides actually aren't that far apart. Perhaps 2016 will be the year this gets fixed.
If it doesn't, we'll be talking at next year's dinner about other iconic American companies renouncing their citizenship for a cheaper tax rate abroad.
The activists won. Now what?
First, Ellen Kullman, DuPont's longtime chief executive, was shown the door. (She claimed to "retire.") Then DuPont, only two months later, announced plans to merge with Dow Chemical. What drove these corporate machinations? Activist investors. Nelson Peltz pressured DuPont's board to oust Kullman and combine with Dow Chemical. Meanwhile, Dan Loeb's Third Point aimed his sights at Dow Chemical. (Dow Chemical did the deal with DuPont just one business day before Loeb was technically allowed to speak out about the company. Dow's chief executive, Andrew Liveris, of course, said that the timing was unrelated.) Whether this merger is a success remains to be seen. But more than anything else that happened this year, the deal demonstrates the increasing power of shareholder activists in the boardroom, gaining access and influence. Now that the boardroom is becoming more democratic, it's important to remember that democracy can also be messy.
C'mon guys
It was the corporate scandal of the year: Volkswagen systematically cheated on emissions tests for years by literally hacking software in millions of its cars. Yes, heads have rolled at the German automaker, but no one has been prosecuted - at least not yet.
Returns, returns, returns
The table of hedge fund titans - including Ackman (yes, Bill, we're getting to the speeches), Greenlight Capital's David Einhorn and Glenview Capital Management's Larry Robbins - was strategically placed near the bar this year, given the industry's miserable returns.
According to a report from HSBC, through the end of last month Ackman's performance was off 19.5 per cent, Einhorn's fund had declined more than 20 per cent and Robbins's fund had dropped 17 per cent.
Unless hedge funds start meaningfully outperforming the market, it's going to get harder to justify paying their expensive fees - if it's justifiable at all.
In case there was any confusion, this "dinner" is all fictitious. (Every year, at least one reader asks about getting invited.)
As 2015 comes to an end, it's time for DealBook's annual Closing Dinner, a Wall Street ritual that may seem to be a vestige of a different era in the face of recently announced layoffs and continued cost-cutting. To reflect this new thrifty environment, we've asked Chipotle to cater. (Fingers crossed.)
Of course, the biggest challenge in organizing this dinner is the seating assignments and the requests that come in from all of those persnickety executive assistants. The health care table, which is usually straightforward, was especially tricky this year. For example, I was told that the executive team from Valeant did not want to be seated at the same table with Martin Shkreli, the drug company executive arrested and charged with securities fraud this month. Something about "optics." (Shkreli has pleaded not guilty.) And finding a seatmate for Elizabeth Holmes, whose blood-testing start-up, Theranos, has come under scrutiny, also proved challenging. We settled on seating her next to her lawyer, David Boies, a
Then we had to contend with the seating assignments for the activist investors table, which we usually keep in the back because it often gets so rowdy. This year, given their newfound prominence in the boardroom, we've moved the table to the front. Carl Icahn has assured me he's going to going to keep it "classy" and has invited two guests: Tim Cook, the chief executive of Apple, one of Icahn's biggest stock positions, and his friend Donald Trump, who has pledged to make Icahn secretary of the Treasury if he wins the presidency. (Really, this is not a joke.)
We've also got the unicorn table this year, which includes Travis Kalanick of Uber and Brian Chesky of Airbnb. The Silicon Valley executives are seated next to Mayor Bill de Blasio, who has been squabbling with Airbnb and appeared to capitulate in his battle with Uber earlier this year. The mayor, still stinging over mocking him by name in its app, grudgingly agreed to sit next to Kalanick. But he was excited to chat with Chesky and float his idea for a new revenue stream for the city by renting out his Yalie son's empty bedroom via Airbnb.
Finally, there's the Giving Pledge table in the very front: Mark Zuckerberg, who announced plans to give away 99 per cent of his Facebook stock, just as his role models Warren Buffett and Bill and Melinda Gates are doing with their wealth. He got dinged by critics for using a limited liability company structure rather than a traditional nonprofit. But give the guy a break, he's going to give away billions. Happily, Zuckerberg also generously agreed to pick up the Chipotle bill tonight, and he's even springing for the guacamole. (Yes, we know, guacamole is extra.)
Finally, with Trump in attendance, we decided to balance things out by inviting Hillary Clinton and Bernie Sanders. We placed Clinton at the table with Wall Street chief executives. Sanders sat alone.
Now on to the toasts and roasts as we look back on 2015 and look ahead to the new year:
Cheers, Yellen
The Federal Reserve chairwoman, Janet Yellen, seated on the dais, has been repeatedly criticized by many Wall Street players for not raising interest rates fast enough. Yet she held firm and took her time until she believed she could raise rates without causing a three-alarm panic. She did it in December, just as she said she would, and the market did, well, next to nothing - which was exactly her goal. It is hard to imagine it going much smoother, given all the consternation around a raise over the last two years. Could it have happened sooner? Perhaps. But we'll never know. What we do know is that so far, during her first two years at the helm, Yellen seems to be steering the ship carefully and confidently. It is too soon to say whether her policies will prove successful, but so far, kudos are in order.
Don't hold your breath
Just when we thought tax inversion deals had been slowed by new rules from the Treasury Department, we got the biggest inversion deal in history: Pfizer buying Allergan for $150 billion. Through all sorts of financial sleight of hand and legal maneuvering, Allergan, the far smaller company, will end up buying Pfizer, with the combined company claiming residency in Ireland. It's easy to be cynical about the deal and call Pfizer unpatriotic - and I have! - but the real culprit is the nation's byzantine corporate tax system, which hasn't been significantly updated since 1986. That doesn't make sense.
Both Democrats and Republicans have argued that we need to reform the tax system, and both sides actually aren't that far apart. Perhaps 2016 will be the year this gets fixed.
If it doesn't, we'll be talking at next year's dinner about other iconic American companies renouncing their citizenship for a cheaper tax rate abroad.
The activists won. Now what?
First, Ellen Kullman, DuPont's longtime chief executive, was shown the door. (She claimed to "retire.") Then DuPont, only two months later, announced plans to merge with Dow Chemical. What drove these corporate machinations? Activist investors. Nelson Peltz pressured DuPont's board to oust Kullman and combine with Dow Chemical. Meanwhile, Dan Loeb's Third Point aimed his sights at Dow Chemical. (Dow Chemical did the deal with DuPont just one business day before Loeb was technically allowed to speak out about the company. Dow's chief executive, Andrew Liveris, of course, said that the timing was unrelated.) Whether this merger is a success remains to be seen. But more than anything else that happened this year, the deal demonstrates the increasing power of shareholder activists in the boardroom, gaining access and influence. Now that the boardroom is becoming more democratic, it's important to remember that democracy can also be messy.
C'mon guys
It was the corporate scandal of the year: Volkswagen systematically cheated on emissions tests for years by literally hacking software in millions of its cars. Yes, heads have rolled at the German automaker, but no one has been prosecuted - at least not yet.
Returns, returns, returns
The table of hedge fund titans - including Ackman (yes, Bill, we're getting to the speeches), Greenlight Capital's David Einhorn and Glenview Capital Management's Larry Robbins - was strategically placed near the bar this year, given the industry's miserable returns.
According to a report from HSBC, through the end of last month Ackman's performance was off 19.5 per cent, Einhorn's fund had declined more than 20 per cent and Robbins's fund had dropped 17 per cent.
Unless hedge funds start meaningfully outperforming the market, it's going to get harder to justify paying their expensive fees - if it's justifiable at all.
In case there was any confusion, this "dinner" is all fictitious. (Every year, at least one reader asks about getting invited.)
© 2015 The New York Times News Service