How a deal got GameStop CEO $179m goodbye gift

NEW DELHI: Gamestop Corp chief executive George Sherman can step down this summer with a $179 million windfall that dwarfs CEO salaries at many larger corporations thanks to a sweetheart deal that was turbocharged by this year’s furious meme stock rally, compensation experts said.
GameStop said on Monday that Sherman would step down by July 31. The struggling US videogame retailer has been seeking a new leader to work on its e-commerce transition with chairman Ryan Cohen, the billionaire co-founder and former chief executive of online pet supplies retailer Chewy Inc.
GameStop decoupled some of Sherman’s pay from his performance last year in the early months of the Covid-19 pandemic and granted him stock when its shares were worth a tiny fraction of their current value, according to a Reuters review of security filings and interviews with compensation consultants.
As a condition of his exit, GameStop is speeding up the time frame for Sherman to receive the shares, generating the award.
Sherman, who has been CEO since April 2019, forfeited $98 million worth of stock this month because he did not meet performance targets, GameStop disclosed last week.
Still, he stands to receive a stock payout currently worth $179 million because GameStop granted him more shares linked to his tenure at the company rather than to his performance as most companies do with their CEO, said Eric Hoffmann, a vice president at compensation consultant Farient Advisors LLC.
“Investors like awards that are performance-based, that have hard pre-established financial goals that the executives have to meet to earn, as opposed to time-based shares, where they just have to hang on to get them,” Hoffmann said.
A spokesman at Grapevine, Texas-based GameStop declined to comment. Sherman did not respond to requests for comment. Cohen, GameStop’s largest shareholder with a 13% stake, could not be reached for comment.
The value of Sherman’s severance payout surpasses annual salaries given to many top US CEOs. ViacomCBS Inc CEO Joseph Ianniello took home $112.9 million in realized pay in 2019, while JPMorgan Chase & Co’s Jamie Dimon’s 2019 realized pay hit $107.8 million, according to the most recent tally by corporate governance data provider CGLytics.
Other GameStop employees will not share in Sherman’s windfall. The retailer has been shuttering hundreds of stores, according to securities disclosures.
GameStop’s shares closed at $158.53 on Tuesday, a stratospheric rise from around $5 last summer, when the company granted the bulk of the stock award to Sherman. They skyrocketed in January as individual traders on Reddit and other social media platforms snapped them up, squeezing short sellers.
Reuters reported last year how some companies were shielding executives from the financial fallout of the pandemic by moving from performance-based to time-based payouts. They reasoned that the market disruption made it difficult to meet financial targets, and Sherman will benefit from that trend.
Sherman, 59, has been credited internally with slashing costs and steering GameStop through the pandemic that put other retailers out of business, Reuters reported last week.
But his 25 years of experience have been largely with brick-and-mortar retailers, such as Advance Auto Parts Inc and Home Depot Inc. Cohen wants a top executive with skills better suited for GameStop’s digital transformation, Reuters reported.
Vesting of shares
GameStop granted Sherman roughly 925,000 shares last June that he was set to receive in thirds over three years, according to regulatory filings.
He is set to receive them all at once upon his exit under terms of a “transition agreement” negotiated this month, as well as roughly 200,000 more shares that had not previously vested, the filings show. The filings do not disclose how GameStop’s board decided on these awards.
Sherman also stood to eventually receive 308,477 shares awarded last June that were tied to his performance, separate from the stock he forfeited last week. He agreed to forgo those performance-based shares as well, one of the filings shows. It was not clear whether he would have met the performance targets.
GameStop has said Sherman plans to remain on the board of directors without pay to help the next CEO transition into the role.

Canada’s annual pace of inflation jumps to 2.2% in March

The annual pace of inflation jumped higher in March due in large part to a plunge in prices a year ago at the start of the pandemic.

Statistics Canada said Wednesday the consumer price index in March was up 2.2 per cent compared with a year ago.

The increase compared with a 1.1 per cent year-over-year increase in February, which was then a pandemic-era high.

The figures for March marked a new high, but one that saw prices compared against a year ago when the first wave of COVID-19 crashed on Canada’s shores.

Read more: From furniture to toilet paper, Canadians warned of shortages, price hikes amid trade logjams

March gas prices, for example, were up 35.3 per cent compared with the same month last year when prices reached a four-year low at the onset of the pandemic.

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Statistics Canada said about one-fifth of the increase in gasoline prices was due to the comparison with prices in March 2020.

Excluding energy prices, headline inflation would have been softer, clocking in at 1.1 per cent year-over-year.

“For many Canadians, inflation doesn’t feel quite as weak as the news would suggest,” wrote TD senior economist James Marple.

“Canadians have shifted consumption toward shelter, which has been increasing in price, and away from clothing and recreation, which has fallen.”

The effect for gasoline should translate over into other areas of the index. The statistics agency said that when there are large drops in prices in the year-ago period, as was seen at the onset of the pandemic, it can push up headline inflation in the current month.

Click to play video: 'Housing costs and grocery prices put pressure on food ability in Canada' Housing costs and grocery prices put pressure on food ability in Canada

Housing costs and grocery prices put pressure on food ability in Canada

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In its report on the consumer price index Wednesday, the agency said this effect should continue for the next few months.

CIBC senior economist Royce Mendes said it’s likely that the inflation reading for April will touch three per cent when prices are compared with weak levels seen during the worst of the pandemic.

“Given the fact that the surge in headline inflation is simply due to base effects, the Bank of Canada will look through the recent acceleration and continue to focus on the support still needed for the labour market,” he wrote in a note.

Read more: Bank of Canada keeps rates at 0.25%, raises country’s economic outlook

Statistics Canada said the average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 1.93 per cent for March.

That’s the highest the average has been since it had the same reading in January 2020.

The Bank of Canada targets an inflation rate of two per cent and plans to keep its key interest rate at 0.25 per cent until the economy is back on its feet and inflation back on target.

Mortgage interest costs declined 6.3 per cent year-over-year, Statistics Canada says, as rates have dropped on the back of the central bank’s actions.

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Statistics Canada said homeowner replacement costs, which are linked to the price of new homes, rose 7.9 per cent between March 2020 and last month, marking the largest yearly increase since December 2006 when it was 8.2 per cent.

As well, food prices were up 11.4 per cent year-over-year in March, Statistics Canada said.

© 2021 The Canadian Press

Oxygen reallocation to impact small biz: Crisil

MUMBAI: Reallocating oxygen for medical purposes to take care of the rising Covid-19 cases will have an adverse impact on small businesses in some sectors, domestic rating agency Crisil said on Wednesday.
It said the “hiccup” seems temporary for now, and it is unlikely to impact the credit quality of the affected businesses.
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The impact will be greater for companies in Maharashtra, New Delhi, Rajasthan, Madhya Pradesh and Gujarat, where medical oxygen demand has increased multiple times due to high Covid-19 caseloads, the agency added.
The central government has barred industrial use of oxygen except in nine designated sectors from Thursday onwards to divert the available stocks for life-saving medicinal use.
Demand for medical oxygen is estimated to have rocketed five-fold in the second week of April versus pre-pandemic levels as COVID-19 infections took off, Crisil Ratings said.
“The disruption in the supply of oxygen for industrial use would temporarily impact the revenues of small and mid-sized companies into metal fabrication, automotive components, shipbreaking, paper, and engineering,” its director Gautam Shahi said.
These sectors typically do not have captive oxygen plants and source their requirement through merchant suppliers for operations such as welding, cutting, cleaning and chemical processes, he added.
Setting up an air-separation plant or importing oxygen is not a viable option because it requires significant lead time and involves relatively prohibitive costs, the agency said.
Oxygen is consumed by industry in two ways – on-site and merchant sales. On-site is through captive plants for process-driven industries (including the nine sectors exempted by the government), which account for 75-80 per cent of oxygen manufactured in India, the rating agency said.
The balance 20-25 per cent is supplied through merchant sales (called liquid oxygen) through cryogenic tanks and cylinders, it said, adding the healthcare sector consumes only 10 per cent of merchant sales.
Its associate director Sushant Sarode said the disruption in oxygen supplies for industrial use will last for six to eight weeks as of now.
“Affected sectors can partly manage their oxygen requirements with the inventory. Therefore, we expect only a limited decline in revenue for them,” Sarode added.
However, a prolonged and intense second wave that curtails oxygen supply to industries for a longer period than expected will exacerbate the downside risk in affected sectors, the agency said.

FPIs stock holding value soars by $105 billion: Report

MUMBAI: The value of the foreign portfolio investors’ (FPI) holdings in the domestic equities reached a record $555 billion in 2020-21, a whopping $105 billion growth between September 2020 and March 2021, according to a report.
As against this, the value of the domestic institutional investors at $203 billion was not even half, according to the data compiled by Bank of America (BofA) Securities.
FPIs have put in more money into the markets since then, having invested net $7.2 billion till April 16 (Year-To-Date 2021), making the country the only market that has seen net positive inflows in the year, despite a dip in March when it slowed to $1.4 billion from $3.5 billion in February and $2.2 billion in January.
That means so far YTD 2021 they have net added zero investment unlike in all other emerging markets which saw massive outflows.
In 2020-21, FPIs, which have been the main driver of domestic equities, have pumped in a record $37 billion or Rs 2.75 lakh crore into the equities, the highest in two decades, according to the data from the National Securities Depository.
Previously, in fiscal years 2010, 2011 and 2013, FPI inflows had crossed $20 billion. Investments zoomed as major central banks pumped in trillions of dollars to try and revive the pandemic-hit economies, flooding markets with liquidity.
On the other hand, the domestic institutional investor inflows remained at a negative Rs 1.38 lakh crore in 2020-21 taking the total value of their holdings to $203 billion, spread across exchange traded funds ($38 billion), large-cap fund ($24 billion), flexi cap funds ($22 billion) and mid-cap fund ($16 billion), it said.
According to the report, after pumping a record $37 billion in 2020-21, the value of the FPI holding in the domestic equities is at a record high of $555 billion, which was only $450 billion at the end of September 2020 or 21.4 per cent of the market capitalisation.
As of June 2020 quarter, the value of FII investments in equities stood at $344 billion or 18.7 per cent of the market cap, which means in just three months, it has jumped 31 per cent. In September 2019, the value of FII investments was $429 billion.
Meanwhile, the report also said domestic institutional investors also turned net buyer of the equities till April 16 (YTD21), with a net addition of $2.2 billion which is back to pre-pandemic level– they became net buyers in March after being net sellers for the past eight months in a row.
For FPIs, real estate/financials/energy were the main investments, while for DIIs it was more thematic funds, mid-cap funds, large & mid-cap fund.
So far in 2021, active funds drove the flows ($1.2 billion) vs passive funds ($263 million), taking the YTD 2021 FII inflows at $7.2 billion until April 16.
As against this, FPIs have been net sellers in major EMs in Arpil– Taiwan (-$5.5 billion), South Korea (-$1.3 billion) and Brazil (-$828 million). YTD inflows for India ($7.4 billion), Taiwan (-$10.6 billion), South Korea (-$14.1 billion) and Brazil ($3.1 billion).
FPI flows’ sectoral deployment in the country were skewed in favour of real estate (+$500 million), financials ($374 million) and energy ($311 million), whereas it was -$330 million in IT, -$223 million in healthcare and -$31 million in utilities.
Of the $555 billion of investment/holdings, the maximum was in financials at 36.2 per cent, followed by IT at 13.8 per cent, energy at 13.3 per cent and in utilities at 2.6 per cent, materials at 2.2 per cent and real estate at 1.03 per cent.
The NSE500 stocks are owned majority by the founders (46 per cent), FIIs (20 per cent), retail investors (9 per cent), domestic mutual funds (7 per cent), government (5.5 per cent) and banks, financial institutions and insurers (5 per cent).
Since December 2020, the ownership patterns have changed quite for founders (up 120 basis points), retail (up 20 bps) and FIIs (-150 bps).
India MSCI valuation premium to EMs is now at 41 per cent, which is 1 per cent below long term average.

Discord abandons Microsoft acquisition talks: Report

WASHINGTON: Discussion platform Discord, popular among amateur video game players, has halted acquisition talks with Microsoft and is instead considering its options for a public offering, the Wall Street Journal reported on Tuesday.
Media reported last month that the social platform, created in 2015, was engaged in discussions about a transaction with the technology giant that would have valued Discord at $10 billion.
Discord, which is based in San Francisco, allows its 140 million monthly users to exchange text, audio and video for free.
The platform, which is not yet profitable, generated about $130 million in revenue in 2020 from $45 million the year before as it grew beyond just “gamers” to other users as well during the pandemic, according to the Journal.
At least three different companies have expressed interest in acquiring Discord, the newspaper said, citing anonymous sources.
Picking up Discord would have allowed Microsoft to expand its social presence beyond LinkedIn, the professional network it acquired in 2016.
And Discord sees a large group of users among gamers using Xbox, Microsoft’s video game brand that ranges from consoles to mobile games to streaming services.
But Discord may instead be looking toward a market debut, the Wall Street Journal said, following in the footsteps of other recent public offerings from the video game world such as collaborative gaming platform Roblox.

Key facts about used lead-acid battery recycling

NEW DELHI: The global lead-acid battery industry is worth about $65 billion annually, but when used batteries are recycled, the process has been identified as the most polluting in the world.
The lead metal value from smelters that mainly recycle used batteries, is expected to be $17.5 billion in 2021, according to Wood Mackenzie principal lead analyst Farid Ahmed.
Below are some of the key facts about this industry:
Potent neurotoxin
Lead is the main element used in lead-acid batteries.
The metal currently trades around $2,000 per tonne on the London Metal Exchange.
Environment agencies Pure Earth and Green Cross Switzerland have said lead battery recycling is the most polluting industry in the world.
Lead is a potent neurotoxin, especially in children, where even low-level exposure is associated with a reduction in IQ scores, shortened attention spans and potentially violent and even criminal behaviour later in life, according to a United Nations International Children’s Emergency Fund and Pure Earth report.
Blood lead levels (BLL) of over 5 micrograms of lead per decilitre (ugdl) of blood are considered dangerous by the World Health Organization (WHO) and United States Centers for Disease Control and Prevention (CDC).
About 800 million children worldwide have dangerously high levels of the heavy metal, according to the UNICEF and Pure Earth report.
Their exposure to lead includes breathing dust and fumes from informal and backyard lead-acid battery recycling units and open-air smelters, eating food contaminated by lead-glazed pottery and working in electronic waste dumps.
Informal sector
As much as half of the lead-acid battery recycling in the world ends up in the “informal” sector, according to the UNICEF- Pure Earth report.
A white paper by the Global Battery Alliance in partnership with the World Economic Forum estimates that there are between 10,000 to 30,000 informal battery recycling sites globally.
Africa, India, Bangladesh, Indonesia are among the regions blighted by informal recycling but not all operations there are informal or of poor standard, International Lead Association Regulatory Affairs Director Dr. Steve Binks said.
In China, the world’s largest lead-acid battery market, a large portion of used lead-acid batteries has been recycled in an unorganised way, said Jianbin Meng, Director of Economics and Environment at the Portugal-based International Lead and Zinc Study Group (ILZSG).
Lead recycling
In 2020, about 12.4 million tonnes of refined lead was produced, including from primary or mined sources and secondary sources, according to Wood Mackenzie data.
About two-thirds of refined lead is produced through recycling.
About 86% of refined lead is used in lead acid battery production in the world, according to estimates by ILZSG.
Largest sector for lead-acid batteries
By value, about 60% of lead-acid batteries are used in cars, according to data estimated by the International Lead Association.
Lead-acid batteries are also used in industrial machinery like forklifts and cranes, as well as in data centres and e-bikes.
Refined lead consumption for batteries
China was the biggest market player in terms of lead consumption for batteries followed by Europe and the United States.

Bank of Canada keeps rates at 0.25%, raises country’s economic outlook

The Bank of Canada on Wednesday announced it is keeping its key interest rate target on hold as it raises its outlook for economic growth this year.

The key rate remains at 0.25 per cent where it has been for more than a year.

The decision came as the Bank of Canada raised its prediction for economic growth this year to 6.5 per cent, up from an earlier forecast of 4.0 per cent.

READ MORE: Consumers expect to return to pre-COVID-19 spending within a year, Bank of Canada says

Economic growth is expected to moderate after that, according to the central bank’s quarterly outlook report.

The improving conditions are why the bank also says today it will ease off federal government bond purchases which are part of its quantitative-easing program designed to aid the economy.

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The Bank of Canada says it plans to keep its up its efforts to aid the economy until slack is absorbed and inflation is back at its two-per-cent target, which the bank now sees happening later next year.

© 2021 The Canadian Press

NHAI puts GPS-based tolling on fast-track, invite bids

NEW DELHI: The National Highways Authority of India (NHAI) has fast-tracked the plan to launch the GPS-based tolling with one of its subsidiaries floating a tender to engage a technical consultant to prepare the roadmap. The consultant will also suggest the need for changes in laws to implement the system, which aims at doing away with the toll gates across the NH network.
Last December, Union road transport and highways minister Nitin Gadkari had said NHs would be toll plaza free in the next two years. Last month, NHAI chairman S S Sandhu has also announced that the technology will be deployed on some NH stretches as pilot in the next one year.
According to the bid document floated by IHMCL, the successful consultant will have to study reports on existing electronic toll collection in India and how the FASTag can be complemented with proposed global navigation satellite system (GNSS) based tolling. It will also come out with details on what would be needed to adapt a GNSS enabled distance based tolling system, which both NHAI and the private toll operators would require to put for implementation.
Moreover, the consultant will be required to come out with the details of infrastructure needed at the end of vehicles and to suggest provision for enforcement such as penal levies.

PM lauds Tata Group’s effort to mitigate oxygen crisis

NEW DELHI: Prime Minister Narendra has praised Tata Group‘s “gesture” to import cryogenic containers for supporting the nation’s healthcare system amid rise in coronavirus cases.
“Compassionate gesture by the Tata Group. Together, the people of India will fight Covid-19,” PM Modi wrote on Twitter.

The Tata Group will be importing 24 cryogenic containers to transport liquid oxygen and help ease oxygen shortage.
“The Tata group is importing 24 cryogenic containers to transport liquid oxygen and help ease the oxygen shortage in the country. #ThisIsTata,” the group said in a social media post.
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Lauding the Prime Minister’s appeal to the people in his address to the nation in the wake of the second wave of the pandemic, the group said it is “committed to doing as much as possible to strengthen the fight against #COVID19” .
The import of the cryogenic containers via chartered flights to mitigate the oxygen crisis is one such effort to boost health Infrastructure, it added.
In his address to the nation on Tuesday, PM Modi called upon all stakeholders, including the pharmaceutical industry, to deal collectively with the immediate challenge of the shortage of oxygen cylinders.
Last year when the first wave of the pandemic hit India, the group had also imported ventilators, personal protective equipment (PPE) kits, masks and gloves, as well as Covid testing kits in large numbers from countries including South Korea, the US and China.
The group had also pledged Rs 1,500 crore to combat the coronavirus pandemic.
(With inputs from PTI)

O2 supplies run low as India grapples with virus ‘storm’

NEW DELHI: Indian authorities scrambled to shore up supplies of medical oxygen to hospitals in the capital, Delhi, on Wednesday as a fast-spreading second wave of coronavirus stretched medical infrastructure to breaking point, officials and doctors said.
India, the world’s second most populous country, is reporting the world’s highest number of new daily cases and approaching a peak of about 297,000 cases in one day that the United States hit in January.
Coronavirus: Live updates
Delhi’s government issued a call for help on social media saying major government hospitals only had enough oxygen to last another eight to 24 hours while some private ones had enough for just four or five hours.
One hospital, the GTB hospital, got some oxygen supplies just before it was going to run out of stocks for its 500 patients, media reported.
“We had almost lost hope. All of us were in tears when we saw the oxygen tanker arrive,” one relieved doctor, speaking on condition of anonymity, told India Today.
The city of 20 million recorded 28,395 new cases and 277 deaths on Tuesday, its highest since the pandemic began. Every third person tested for coronavirus was found positive, the state government said.
Prime Minister Narendra Modi said India faced a coronavirus “storm” overwhelming its health system.
“Oxygen demand has increased. We are working with speed and sensitivity to ensure oxygen to all those who need it. The centre, states and private companies, all are working together,” Modi said in a televised address to the country on Tuesday evening.
Modi faces criticism that his administration lowered its guard when coronavirus infections fell to a multi-month low in February and allowed religious festivals and political rallies, some of which he addressed to go ahead.
“The situation was manageable until a few weeks ago. The second wave of infections has come like a storm,” Modi said in his address, urging citizens to stay indoors and not panic amid India’s worst health emergency in memory.
India has launched a vaccination campaign but only a tiny fraction of its population has received shots.
Delhi is under a six-day lockdown to try and stem the transmission. The western state of Maharashtra, home to the financial capital Mumbai, also plans to impose a stringent lockdown this week to try to halt the rise in cases, the cabinet said.
Modi ordered a tough lockdown of India’s 1.3 billion people when the coronavirus was detected last year but his government has always been wary of the huge economic costs of tough restrictions.
He said on Tuesday a lockdown should only be a last resort.