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Apple announced yesterday it is delaying plans to make employees return to the office three days per week. Staff at the Cupertino giant have already been required to attend work in person twice a week since April and the extra day was slated to be added on May 23. Employee pushback, including Covid concerns, turfed those plans indefinitely.
It’s not the first time anyone’s dragged their feet on an Apple update — as owners of older iPhone models who hold off on potentially destabilizing iOS refreshes know all too well. | | | • | | Homeowners are proving to be a uniquely advantageous customer base for Home Depot during a period of economic uncertainty. | | • | | Jamie Dimon may lose out on a big bonus. | | • | | Mastercard is letting customers pay with a show of their palm or face. Reviews so far? Facepalm. | | | | |  | Retail | Home Depot Beats Expectations Despite Fewer Customers |  | | During the pandemic, Home Depot became the King of the DIY fixers. On Tuesday, it added a new jewel to its crown for toppling those who doubted it could keep up the momentum.
Despite losing customers in the first three months of 2022, the big-box retailer turned in its strongest first-quarter sales numbers on record. Who said you can’t rise above inflation? | Show Some Manors | | In the last two years, Home Depot became a temple of refuge for every housebound homeowner. Pandemic measures gave eager HGTV fans more time and fewer excuses to finally put in that deck they’d built up in their mind’s eye while lumbering around the backyard. Whether or not these feats of engineering were level with expectations, the Depot rode the nationwide wave of amateur home improvement to a record $150 billion in sales last year.
The $39 billion in revenue reported Tuesday — well above the $37 billion expected by Wall Street — was 3.8% better than a year ago, rising above the double whammy of inflation and supply-chain disruptions that have driven up the cost of key materials like lumber. Net income rose to $4.2 billion, from $4.1 billion — and for that Home Depot has the mighty, and mightily capitalized, American homeowner to thank: | • | | Home Depot CFO Richard McPhail noted US home-equity values are up 40% in the last two years, meaning homeowners still have plenty of spending power. To back that up: while the number of transactions at Home Depot fell 8.2% in the first three months of 2022, the average amount spent per transaction climbed 11.4%. | | • | | “The homeowner has never had a balance sheet that looks like this,” McPhail said on an investor call. “They’ve seen the price appreciation, and they have the means to spend.” Home Depot had warned earlier in the year that sales growth would be just "slightly positive." Now it’s boldly projecting 3% revenue growth. | | | | Consumer Protection: There are other signs that, even as companies have no choice but to pass on higher costs to customers, American consumers are far from buckling under the weight. The Commerce Department said retail sales rose 0.9% in April from a month earlier, despite inflation near 40-year highs. And while big-box rival Walmart saw its profits hit by higher costs, the company reported a 3% increase in its latest-quarter sales on Tuesday. | | | | | | Executive Pay | JPMorgan Shareholders Deny Jamie Dimon’s Special Payout | | Getting rejected always hurts. Getting rejected, and losing out on tens of millions of dollars in the process, hurts even more. Just ask Jamie Dimon.
On Tuesday, JPMorgan Chase shareholders voted against a pay plan for the bank’s six top executives, which would’ve seen Dimon awarded $50 million as a one-off award. Go ahead and shed a crocodile tear or two. | Dimon’s in the Rough | | Only 31% of shareholders voted yes as part of the “say on pay” vote to award the executives a total of $201 million for their work in 2021. It’s a harsh rebuke of Dimon and his leadership team, which helped steer the megabank to record earnings last year, and marks a razor-sharp reversal of last year’s 90% vote of support for similar executive payouts. What’s more, it's the first time an executive pay package has failed to earn shareholder approval since the “say on pay” vote was instituted at the bank in 2009.
While the resolution is nonbinding, the bank’s Compensation & Management Development Committee does take votes into account. The rebuke could signal a failure by shareholders and the board to see eye to eye on the bank’s future. The board says the proposed package reflected its desire to see the 66-year-old Dimon remain at the helm for years to come, but shareholders are increasingly wary of the bank's newfound willingness to spend: | • | | In February, shareholders criticized Dimon for offering too few details on an ambitious plan to spend $15 billion — most of it on new technologies meant to fend off disruptive fintechs (for context, that amount is more than the GDP of Belarus, a traditional hub of high-tech talent). The reversal in Dimon’s typically cost-conscious habits marks a 50% increase in spending compared to 2019. | | • | | “Excessive one-off grants to the CEO and COO amid tepid relative performance worsen longstanding concerns regarding the company’s executive pay program,” Glass Lewis, an influential proxy advisor, wrote in a letter urging shareholders to reject the pay package. JPMorgan’s share price is down roughly 30% from an October high, and is now below pre-pandemic levels. | | | | Jamie Rides the Bus: Dimon, worth $1.6 billion according to Forbes, earned $34.5 million from the bank in 2021 — though mostly in the form of restricted stock. New York City Mayor Eric Adams would like to see him spend some of it in $2.75 increments — Adams urged Dimon and other high-profile CEOs to “ditch their customary black cars” and take the subway to work, as a way of encouraging workers to return to the city. If Dimon is denied his $50 million, he may have to seriously consider the offer. | | | | | | SPONSORED BY FRANSHARES | Why Do Most Startups Fail? | Here’s a fact that will ring true with all the entrepreneurs out there: starting a new venture is hard. Really hard. By the time you’ve figured out how to operate Quickbooks and pay self-employment taxes — you have to answer an even bigger question: do customers want what you’re selling? By the time you’ve answered that question, you could be months or years down the wrong path. That’s why franchises are so powerful — the biggest unknown, product-market fit, has been solved and the business can be launched with all the processes needed to make it hum. If that sounds enticing, you’ll love this part — FranShares, a platform that enables investors to become franchise owners without learning how to operate a deep fryer, has just launched. | • | | Franshares aims to generate returns of 16% - 22%* on high-quality and vetted assets | | • | | You can start cashing in on distributions after the ramp-up period | | • | | Best of all, you’ll pay zero management fees | | | | | | | | Payments | Mastercard Allows Customers to Pay at Checkout With a Wave of the Hand | | As if biometric payments weren’t controversial enough, this one wants you to work up the gall to wave at the checkout.
On Tuesday, Mastercard launched a pilot payments program that lets customers pay in stores by showing the palm of their hand or their face. | Recognize This | | Mastercard’s “Wave to Pay” program will launch this week at five supermarkets in Brazil run by São Paulo-based St Marche. Using facial-recognition software from Japan’s NEC, Brazil’s Payface, and California's PopID, the service requires customers to voluntarily enroll, but nevertheless enters an emerging segment fraught with concerns about regulation and consumer rights.
According to Juniper Research, the number of people using facial-recognition technology to make a payment will grow to 1.4 billion by 2025, more than twice the 671 million from 2020. At the same time, the adoption of biometric-based payments has faced notable resistance, and even major exits: | • | | US Senators Bill Cassidy, Amy Klobuchar, and Jon Ossoff petitioned Amazon last fall to reveal what the company does with the data collected by its Amazon One palm-print payment system. The service launched at a dozen Amazon Go stores last year; the company plans to expand it to Whole Foods locations. | | • | | Last year, Facebook shut down its facial-recognition system, which had data on 1 billion users, citing regulatory uncertainty. In 2020, the social network paid a $650 million settlement to over 1.4 million Illinois residents over claims it broke state privacy laws by harvesting biometric data without first asking people for permission. Microsoft shut down its own facial-recognition database containing 10 million images of some 100,000 people in 2019. | | | | “All the research that we’ve done has told us that consumers love biometrics,” Ajay Bhalla, cyber and intelligence president at Mastercard, told CNBC. “They want making a payment at a store to be as convenient as opening their phone.”
Can It Recognize a Raised Eyebrow? While over 495 million people in China — roughly a third of the population — used facial-recognition technology last year, a study by Nielsen Norman Group found holdouts remain skeptical about security. Last October, the European Parliament passed a nonbinding resolution supporting a ban on the creation of private facial-recognition databases. | | | | | | Extra Upside | • | | Twitter and its would-be-owner Elon Musk are in a war of characters over whether the company’s spam bot numbers are correct. | | • | | Apple is the latest corporate giant accused of labor busting. | | • | | This no-cost guide holds the secrets to untold compounding for your portfolio. How’s it work? It breaks down how investors can harness the power of opportunity zones, a type of real estate investing that allows capital gains to flow to underserved communities. It’s an o-so-rare instance where tax incentives and morality align. If you’re sitting on gains of $50k or more — access Caliber’s guide right here.* *Partner | | | | | | |  | Just For Fun | | | | | Written by Sean Craig and Brian Boyle. | Disclaimer | | | | *Disclaimer: (1) Portfolio IRR projections are calculated using all cash flows, including the initial investment of $25,000,000 of offering proceeds, annual earnings before interest, depreciation and amortization (“EBITDA”), less estimated corporate taxes, and the sale of the entire portfolio at the end of the fifth year at 5x EBITDA. | | | | | No longer want to receive these emails? Unsubscribe here. Copyright © 2022 The Daily Upside, LLC., All rights reserved. 1230 York Avenue, Box 154, New York, NY 10065 | | | | |
