Connect with us

Business

Eli Lilly’s Josh Smiley resigns after probe into relationship

Published

on

Eli Lilly's Josh Smiley resigns after probe into relationship

Eli Lilly said Tuesday Chief Financial Officer Josh Smiley had resigned after allegations about a personal relationship sparked an investigation that found “inappropriate personal communication” with some Lilly employees.

The drugmaker said it immediately hired external counsel to conduct an independent probe after it was made aware of the allegations. The investigation revealed consensual though inappropriate personal communications between Smiley and certain Lilly employees.

Lilly said the behavior exhibited poor judgment by Smiley. The company would not give further details on the communications or the number of employees involved.

Reuters could not immediately reach Smiley for comment. A LinkedIn search showed Smiley’s account, which he managed himself, was no longer available.

Eli Lilly had taken “swift and significant action” as soon as it learned about the allegations, a company spokeswoman told Reuters.

Smiley has been with the company since 1995 and became CFO in 2018. He will be replaced by Anat Ashkenazi, who joined the company in 2001 and was most recently senior vice president, controller and chief financial officer of Lilly Research Laboratories, Lilly said.

The company said Smiley’s conduct was not related to financial controls, financial statements or any other business matters or judgments, and he will be available to assist in the transition of his role through July at reduced cash compensation of $9,000 every two weeks.

Executive behavior and the treatment of employees has been under scrutiny over the past few years following the #MeToo social media movement.

In 2019, McDonald’s dismissed Chief Executive Steve Easterbrook over a consensual relationship with an employee, which the board determined violated company policy.

Intel Chief Executive Brian Krzanich resigned in June 2018, after an investigation found he had a consensual relationship with an employee that breached company policy.

Under the separation agreement, Smiley will forego all of his $1 million cash bonus, as well as other current and future equity incentive awards, with the target value totaling over $20 million.

In the past few years, Lilly has bought several smaller drug developers to bolster its line of promising drugs, including for cancer, in the hopes of reducing the drugmaker’s reliance on its blockbuster diabetes drug, Trulicity.

Lilly shares were down 2 percent midday Tuesday.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Robinhood exec wants users to stop worrying about its business model

Published

on

By

Robinhood exec wants users to stop worrying about its business model

Beleaguered no-fee trading app Robinhood is now turning to its chief operating officer to help quell backlash over its response to the “Reddit rally” in January.

In a Thursday blog post, Robinhood COO Jim Swartwout vowed to “demystify” the company’s controversial practice of selling order flow to Wall Street.

Swartwout, a 50-year-old former executive at online brokerages E*Trade and TDAmeritrade, told users that selling order flow to market makers is the only way it can offer its product for free. Robinhood, he said, only makes “two-tenths of a penny” for every share bought and sold on the platform.

“To compete with exchanges, market makers offer us rebates,” Swartwout said. “Market makers typically give you better prices than exchanges.”

The business model has become a PR albatross for the trading platform ever since its controversial decision in late January to bar users from buying shares of popular stock like GameStop.

It’s raised the eyebrows of politicians, who pressed Robinhood chief Vlad Tenev and Citadel CEO Ken Griffin on best execution during a Congressional hearing on Feb 18. Citadel pays Robinhood for its order flow.

Critics have also attacked the app’s “gamification” of trading via an interface that drops virtual confetti and balloons across screens to encourage trading.

Even prior to the latest controversy, Robinhood has come under scrutiny by regulators who fined the company in 2019 for failing to get its customers what is called “best execution” on their trades.

But Swartwout on Thursday insisted this is the golden age for traders.

“It’s easy to see why there’s no better time to be a retail investor,” he writes.

Continue Reading

Business

Lenders mull plan to take Hertz public post-bankruptcy

Published

on

By

Lenders mull plan to take Hertz public post-bankruptcy

There’s a battle brewing over Hertz that could determine whether the car rental company — and original “meme stock” — remains a publicly traded company, The Post has learned.

Hertz on Tuesday proposed exiting bankruptcy by putting a group of new investors in the driver’s seat, including Knighthead Capital Management, Certares Opportunities and Larry Fink’s Blackrock.

The investors have offered to spend between $2.3 billion and $4.2 billion for a controlling stake in Hertz, which would be privately held.

But Hertz’s unsecured lenders, a group that includes JPMorgan, Fidelity and hedge fund Pentwater Capital, are considering slamming the brakes on that plan in favor of their own proposal to pull the company out of bankruptcy via an initial public offering, sources said.

The IPO plan, which has been submitted to Hertz but not yet to the bankruptcy court, calls for the unsecured lenders to convert their debt to stock and then “immediately list” the company on an exchange, a source close to the lenders told The Post.

“I think the process to sell the company has really just begun,” this person said. “Our group controls the vote. Anyone wanting to buy Hertz has to kiss our ring.”

Indeed, the unsecured lenders, a group that also includes Bank of America and Marathon Asset Management and AllianceBernstein, own more than 60 percent of the company’s $4.6 billion in corporate debt, which sources say could make it hard for the Delaware court bankruptcy judge to approve a sale over their objections.

The lenders plan to push their IPO plan to judge unless the Knighthead deal is sweetened. It currently values Hertz’s unsecured loans at around 70 cents on the dollar while making first- and second-lien lenders whole.

Plans for a post-bankruptcy Hertz IPO comes as small investors clamor to buy small cap stocks popular on trading forums like Reddit’s WallStreetBets, or so-called “meme stocks.” In fact, Hertz was one of the first stocks to benefit from chatter on Reddit after its sales got crushed by pandemic lockdowns — resulting in a buying frenzy that sent shares of the bankrupt company as high as $5.53 a share last year.

Of course, current shareholders will be wiped out regardless of which plan wins the day, an outcome that is reflected in Hertz’s stock price of 87 cents a share.

The new investors looking to buy Hertz have been calling junior lenders individually in an effort to come to an agreement, sources said. But skeptical lenders have only to point to rival car maker Avis, which has doubled in price since October amid growing expectations that travel will rebound as people get vaccinated against Covid-19, sources added.

On Wednesday, the Hertz rival closed at a six-year high of $60.85 a share.

“The price looks cheap relative to Avis,” agreed Jefferies analyst Hamzah Mazari of the Knighthead deal, which values Hertz at just 6.5 times its pre-pandemic earnings.

Avis, by contrast, is trading at 8.6 times is pre-Covid earnings. And Hertz on Tuesday estimated that revenue will rise from nearly $6.1 billion this year to $8.6 billion in 2023 as more people get vaccinated.

“They are trying to steal the company,” one junior lender source griped told The Post. “This seems value destructive. Imagine if a public company took an offer 14 percent below the trading price?”

Continue Reading

Business

NY Times slammed for seeking opinion editor with ‘spine of steel’

Published

on

By

NY Times slammed for seeking opinion editor with 'spine of steel'

The New York Times is catching heat over a new job posting that seeks an opinion editor with a “spine of steel” — fresh on the heels of the paper losing three staffers who published controversial columns.

The Gray Lady posted a job ad Wednesday for a deputy opinion editor to help oversee a desk that’s been mired in controversy for much of the past year.

“We’re looking for an editor with a sense of humor and a spine of steel, a confident point of view and an open mind, an appetite for risk and exacting standards for excellence in writing and visual presentation,” the posting reads.

Commentators and journalists slammed the ad’s phrasing on Twitter, suggesting it smelled of hypocrisy following last year’s departures of editorial page editor James Bennet, editorial assistant Adam Rubenstein and columnist Bari Weiss.

“Essentially a complete list of characteristics NOT welcome among Times editors,” tweeted Dan McLaughlin, a senior writer at the right-leaning National Review.

“Someone who fits this description wouldn’t last a day at the @nytimes,” wrote Joe Walsh, a conservative radio host and former Republican congressman.

Newsweek deputy opinion editor Batya Ungar-Sargon took issue with the want ad’s claim that the Times’ opinion team “aims to promote the most important and provocative debate across a range of subjects.”

“The NYT literally fired James Bennet for doing this exact thing,” Ungar-Sargon tweeted. “It outed Adam Rubenstein and tossed him to the wolves for doing this exact thing. It allowed Bari Weiss to be bullied out of the newsroom for doing this exact thing. Just totally shameless.”

Bennet stepped down last June after the Times published an op-ed from Sen. Tom Cotton (R-Ark.) arguing that then-President Donald Trump should deploy the military to quell the Black Lives Matter protests that were sweeping the nation.

The piece, titled “Send In The Troops,” sparked a public protest among Times staffers, many of whom tweeted, “Running this puts Black @NYTimes staff in danger.” Bennet initially defended the piece, arguing the Times owed it to its readers “to show them counter-arguments,” but later apologized and admitted he didn’t read the article.

Weiss left the Gray Lady about a month later with a scathing resignation letter accusing her colleagues of engaging in a “new McCarthyism” and claiming Twitter had become the paper’s “ultimate editor.”

And Rubenstein, the editorial assistant who edited Cotton’s op-ed, resigned in December, some six months after the initial controversy, according to the Daily Beast.

Spokespeople for the Times did not immediately respond to a request for comment Thursday.

Continue Reading

Trending