BANKING
Citi review performance pay
Citigroup Inc’s board changed the way the lender calculates performance pay for executives after receiving some complaints. The largest proxy advisers were not swayed. Executives can now earn more than 100 percent of their annual performance-based compensation only if shareholder returns are positive, the New York-based bank said on Wednesday in a regulatory filing. The plan is designed to ensure executives do not get bonuses that are larger than those initially awarded if total shareholder returns fall over a three-year period. The changes are reflected in performance share units granted in February. Citigroup “heard some concerns from other stakeholders regarding Citi’s new performance share unit” program after submitting its proxy last month, the filing said.
RETAIL
Suzuki retires over struggle
Seven & i Holdings Co chairman and chief executive officer Toshifumi Suzuki stepped down after a power struggle with the board of directors at Japan’s largest retailer, handing a victory to activist investor Dan Loeb. Suzuki, 83, was not satisfied with Seven-Eleven Japan president Ryuichi Isaka and told him to resign, he told reporters at a briefing yesterday in Tokyo. Seven & i’s board instead voted down proposed personnel changes, which included removing Isaka, people with knowledge of the matter said. Hours after the board met, Suzuki said he decided to retire. Loeb, who has endorsed Japanese Prime Minister Shinzo Abe’s efforts to improve corporate governance in Japan, warned Seven & i’s board last week against removing Isaka, 58, and said Suzuki was trying to arrange for his son to succeed him.
INSURANCE
Software to push people out
The rush is on to replace people with software in Europe’s insurance industry as cost cutting and automation become increasingly crucial to bolstering earnings. Zurich Insurance Group AG is accelerating its cost reduction program, targeting savings of at least US$1 billion by the end of 2018 with changes that would affect about 8,000 jobs. Talanx AG is spending 300 million euros (US$342 million) to upgrade technology at its German unit over the next four years after outmoded systems left frustrated customers with expired car registrations. Allianz SE’s modernization includes plans to allow customers to file small auto claims using photographs from their smartphones. Cuts and modernization might lead to the elimination of one quarter of the about 1 million jobs in the region over the next decade, McKinsey & Co said.
BANKING
Activist to spur BEA board
Hong Kong’s tycoon culture is likely to clash with Wall Street today, when activist investor Elliott Management Corp, frustrated by poor returns at family-run Bank of East Asia (BEA, 東亞銀行), tries to persuade shareholders to defy the board. The shareholder votes on proposals including renewing some directors’ tenure and a mandate to issue new shares, pits the US$27 billion hedge fund against BEA’s chairman and former politician David Li (李國寶), whose grandfather founded the bank nearly 100 years ago and whose family is among the territory’s best connected. The dispute illustrates the tension between minority shareholders in Asia pushing for better returns and transparency, and local conglomerates used to running their publicly listed businesses with less scrutiny of corporate governance than is typical in the US and Europe.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained