Shannon Pettypiece, Rick Clough, and Lindsey Rupp, Bloomberg, February 8, 2017
President Donald Trump is injecting himself into the daily business of U.S. companies to an unprecedented extent, spurring investors and executives to weigh their exposure to his wrath when making decisions.
The latest was Nordstrom Inc., which drew Trump’s public anger on Twitter Wednesday for discontinuing his daughter Ivanka’s line, saying sales had slumped.
Two hours after attacking the department store, Trump hosted Intel Corp.’s Chief Executive Officer Brian Krzanich in the Oval Office to announce that the semiconductor-maker would spend $7 billion on a factory in Chandler, Arizona, creating 3,000 jobs. Once again, Trump took to Twitter.
Not even three weeks into Trump’s presidency, the moves fit a familiar pattern in his dealings with companies: do what Trump wants, or face a presidential rebuke. This direct, company-by-company intervention is forcing CEOs and corporate boards into a choice they’ve never before faced with a sitting president — are we with him, or against him? — in a way that distorts normal decision-making and conflicts with shareholder interests.
Some choose to fight.
“It really depends on who your customers are, what demographic they fit into and whether you want to play towards that or play statesman-like corporate CEO,” said Davia Temin, CEO of Temin and Co., a communications consulting firm. […read more]