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The Morning Ledger: More Companies Link Executive Pay to Sustainability Targets
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Candy maker Mars has made it easier for managers to get approval for capital projects that reduce energy and water use. PHOTO: PATRICK HERTZOG/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Good morning. A small but growing group of companies, including candy maker Mars Inc., Dutch life-sciences and specialty-materials maker Koninklijke DSM NV and energy giant Royal Dutch Shell PLC, have started linking a portion of executive pay to corporate environmental, social and governance goals, deploying a tactic they say helps align management’s mind-set with the company’s ESG strategy.
The idea, proponents say, is to give managers a personal incentive to incorporate such considerations into everyday business decisions, CFO Journal’s Tatyana Shumsky reports. If everyone from the chief executive to the plant manager factors things like carbon emissions into capital-expenditure decisions, rank-and-file employees also will be more likely to make choices that help the company reach its goals more quickly—or so the thinking goes.
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“Making people like me, and many other people in the organization, have a stake in making progress in this area, as well as other areas, is a very natural thing,” says Claus Aagaard, the chief financial officer of McLean, Va.,-based Mars, which is aiming to cut carbon emissions from its direct operations to zero by 2040.
To ensure its managers have a clear path to meeting sustainability goals—and their compensation targets—Mars has made it easier for them to get approval for capital projects that reduce energy and water consumption, says Mr. Aagaard. The profitability threshold for such projects is 25% lower than it is for other productivity investments, he says, while the time horizon in which they need to become profitable is longer.
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The U.S. Commerce Department is scheduled to release new-home sales data for May at 10 a.m. ET. Economists surveyed by The Wall Street Journal expect sales, aided by falling mortgage rates, to rise 1.5% after an outsize decline in the previous month.
The Conference Board is scheduled to release its U.S. consumer-confidence index at 10 a.m. ET. Economists expect the index to decline to a still-robust 131.0 in June, from 134.1 in May.
Barnes & Noble Education, Micron Technology Inc. and FedEx Corp. are among the companies scheduled to release earnings today.
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Pioneer CEO Scott Sheffield has embarked on an extreme belt-tightening regimen. TREVOR PAULHUS FOR THE WALL STREET JOURNAL
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Pioneer Natural Resources Co., which once promised production to rival Libya, was part of a revolution that helped make the U.S. a global oil player. Now after years of overspending, the company is pulling back.
AbbVie Inc. has reached a deal to buy Allergan PLC for about $63 billion, as two big drugmakers bet a combination will deliver new sources of growth they have struggled to find on their own.
Hackers believed to be backed by China’s government have infiltrated the cellular networks of at least 10 global carriers, swiping users’ whereabouts, text-messaging records and call logs, according to a new report, amid growing scrutiny of Beijing’s cyberoffensives.
Nissan Motor Co. shareholders voted to overhaul the board after a meeting where they shouted at current board members, management and each other.
AT&T Inc.’s WarnerMedia has tapped BBC Studios-Americas President Ann Sarnoff to lead Warner Bros., the iconic movie and television studio.
A senior Facebook Inc. executive took a veiled shot at Apple Inc., continuing the sniping between the tech giants as their business models are under increasing scrutiny from global regulators.
U.S. carriers, after years of ceding market share to rivals and international partners on overseas flights, are adding more than a dozen new routes and increasing capacity to destinations such as South Africa, India and Croatia.
Bristol-Myers Squibb Co. said its $74 billion merger with Celgene Corp. would be delayed as the company works to allay concerns of federal regulators by selling off Otezla, Celgene’s anti-inflammatory drug that had global sales of $1.6 billion last year.
Eldorado Resorts Inc. agreed to acquire rival casino operator Caesars Entertainment Corp. in a cash-and-stock transaction valued at $8.58 billion, in a move that would create one of the largest gambling companies in the U.S.
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A Michigan Statewide Carpenters & Millwrights Apprenticeship representative assists a job seeker using a virtual welding simulation machine. PHOTO: ANTHONY LANZILOTE/BLOOMBERG NEWS
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The Labor Department released its proposal to create a new type of apprenticeship that would be run by business groups, colleges and other entities, rather than the federal government.
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FedEx Corp., after botching some deliveries for Huawei Technologies Co., filed a lawsuit to stop the U.S. government from requiring the package giant to enforce a crackdown on the Chinese telecommunications-gear maker.
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President Trump signed an executive order imposing new sanctions on Iran, including against its supreme leader and its foreign minister.
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The Environmental Protection Agency’s decision to scrap Obama-era climate rules for coal-power plants will have far-reaching repercussions if the move withstands legal challenges, advocates on both sides of the issue say.
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President Trump pushed for greater price disclosure in health care, signing an executive order that could make thousands of hospitals expose more pricing information and require doctors, health clinics and others to tell patients about out-of-pocket costs upfront.
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The Federal Bureau of Investigation is examining whether lab-testing startup uBiome Inc. used improper billing codes in claims and sought payment for unnecessary tests, tactics that could have inappropriately enriched the company, according to people familiar with the matter.
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Lower food and energy prices offset increases in services such as airfares and vacation packages. A wholesale market in Mexico City. PHOTO: ALFREDO ESTRELLA/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Mexican consumer prices were little changed in the first half of June, bringing annual inflation closer to the central bank’s target as lower food and energy costs offset increases in services such as airfares and vacation packages.
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Signs of funding stress in China’s money markets have abated after the country’s financial regulators urged banks and brokerages to restore calm, but the recent disruptions showed the financial system’s vulnerability to even small shocks.
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Federal Reserve Bank of Dallas President Robert Kaplan said it is too soon to say whether the Fed will need to reduce interest rates in coming months due to rising uncertainty over trade tensions and weaker global growth.
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