BP’s major setback

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0:17Good morning from the Financial Times. Today is Friday, April 24th, and this is your FT &E's Briefing. Big tech jobs took a hit yesterday, and BP ruffled some feathers at its annual meeting. Plus, the Trump family is now in a legal spat with a crypto tycoon. We'll take a look at how the relationship fell apart. I'm Mark Filippino, and here's the news you need to start your day.

0:53Meta announced yesterday it's cutting 10 % of its workforce next month. That's about 8 ,000 jobs, and it's to offset a huge spending spree on AI. CEO Mark Zuckerberg has spent billions on the technology. The company said in a memo to staff yesterday that the layoffs are also meant to, quote, run the company more efficiently. Along the same lines, Microsoft announced that it's offering voluntary redundancy to 7 % of its U.S. staff. And like Meta, it's also on the back of a big AI bet. Microsoft cut more than 15 ,000 jobs last year.

1:31BP didn't get a ton of love at the oil majors annual meeting yesterday. Management put forward two special resolutions for shareholders to vote on. They both failed by a long shot. BP is facing mounting pressure from activist investors and pension funds after it moved away from renewable energy last year. The FT's Malcolm Moore was at the meeting and he joins me now. Hey, Malcolm. Hi, Mark. So tell us about these two failed resolutions. So one resolution was actually to reverse some previous shareholder resolutions around climate reporting. So in 2015, and then again in 2019, BP had put out resolutions which obliged it to basically release a lot of data around its sort of climate change performance.

2:18BP now argues that's just pointless duplication because we have a sort of mandatory reporting framework, which already encompasses all that stuff. But obviously, it just put the backs up of all the people who think that BP, this oil major, is reversing its climate obligations. And so there was a kind of a symbolic vote, and it only got 47 % support. The other resolution, they wanted to hold electronic annual general meetings. And their argument here is basically lots of our shareholders are across the world. Therefore, we want to democratize the process by giving them the right to attend. But I guess, again, here, there were big questions about whether shareholders would be able to have their say.

2:59And so that one also only got 47 % support. Okay, so not great. Malcolm, you were at this meeting. Can you tell me about the atmosphere? Well, look, it should have been a pretty upbeat meeting, right? Because if you look at BP's performance this year, the shares are up 30%. You know, you've got a new chair who's clearly very active. You've got a new chief executive, Meg O 'Neill, who just started on the 1st of April. And they're promising that they're going to pay a lot more attention to shareholder value after years of destroying billions of dollars of shareholder value. Everyone should be happy.

3:35Instead, they kind of shot themselves in the foot by putting these resolutions out there. And also by refusing to allow the climate activists follow this to lodge their own resolution, which basically said, what happens BP to your business if oil and gas goes down and you can't sell as much? They basically said, oh, that had been incorrectly filed and therefore they were legally banned not to accept it. But again, by quashing that resolution and not allowing them to table it, they raised more sort of heckles amongst the people who really care about corporate governance. And so you had one of their top 10 shareholders coming out and saying they were going to vote against the re-election of the chair, who's only been there since last October.

4:17It's classic BP, basically. I want to go back to the Dutch activist investor called Follow This and the concern that they raised. You know, it's unclear if BP's oil and gas business can thrive right now. Tell me more about that. If you rewind a few years, you had climate activists protesting loudly and basically saying, look, if you guys stop supplying oil and gas, then the world will use less oil and gas. They said it was the moral duty of oil companies to take a stand and to do something. Now that didn't work. And what they're doing now is taking an approach where they're saying BP is failing in its financial duty to its shareholders by not preparing for scenarios where actually the world uses less oil and gas.

5:02What happens if actually electric vehicle take up is faster than expected? That's the kind of argument they're making. Now, whether that works or not remains to be seen. If they were to go back to renewables a year after ditching that approach, wouldn't it be hard for BP to define itself going forward and really have any stability or momentum behind its plan of action? I wouldn't go that far, Mark, because BP is not going to reverse, right? They wouldn't have hired Meg O 'Neill, who is a former Exxon executive, who faced down years of climate protests at Woodside, the Australian oil and gas company, when she was the boss there, if they were going to go back to renewables.

5:44Meg O 'Neill is all oil and gas. But what I would say is that it's unclear whether that strategy is going to transform BP's fortunes. And somebody said this at the AGM. They said, how could you pick Meg O 'Neill when she was boss of Woodside? The shareholder returns of that company underperformed peers, and BP didn't really have an answer. They just simply said, we took everything into consideration and she's the right person. That's the FT's energy editor, Malcolm Moore. Thanks, Malcolm. Thanks, Mark.

6:18The Paramount Warner Brothers movie is inching towards the closing credits. Shareholders at Warner Brothers Discovery approved Paramount Skydance's takeover of the iconic Hollywood studio yesterday. The fact that investors are backing this$111 billion deal brings it one step closer to final. Paramount was locked in a bidding war with Netflix for months to acquire the studio. Now the merger heads to regulators in the US, UK, and EU for approval. But there's still a lot of pushback. More than a thousand people in Hollywood signed an open letter this month opposing it. They're concerned that selling Warner Brothers to Paramount could lead to widespread job losses and fewer opportunities across the industry.

7:05The Trump family's crypto company is feuding with one of its biggest backers. World Liberty Financial got hit with a lawsuit recently. It came from crypto tycoon Justin Sun. He also publicly attacked World Liberty in recent weeks. Here to discuss what's going on is the FT's Jill Shaw. She's our U.S. trading and crypto correspondent. Hi, Jill. Hi. All right. So before we get into this legal drama, for our listeners who, you know, aren't super familiar with World Liberty. Tell me a little bit more about it and the role that it plays in the crypto space. Sure. So World Liberty is founded by Eric Trump and Donald Trump Jr., who are, of course, the sons of the U.S.

7:44president, and also by the sons of Steve Whitcoff, the U.S. envoy to the Middle East. And he's a key Trump ally in the administration right now. World Liberty, they're trying to merge decentralized finance and traditional finance. And in practical terms, Royal Liberty has its own token. They've also got a stable coin, which is a dollar-pegged digital token. And they've got a small lending and borrowing platform that is pretty small as far as market share is concerned. So the Trump family is participating in the cryptosphere very actively. And the Trump administration has been very crypto friendly, too.

8:28It's eased regulations in a way that has been pretty unprecedented. But I want to talk to you about this crypto tycoon that I introduced a little earlier, Jill. His name is Justin Sun. Why is he suing World Liberty? Yeah, so Justin Sun is a crypto billionaire. He has a blockchain company that he's founded. He bought in using those World Liberty tokens to support World Liberty Financial. He has sort of become one of the biggest public backers of the Trump family's crypto efforts. And that relationship, as you said, has since fallen apart. What happened recently was that Justin Sun filed a lawsuit against World Liberty, essentially alleging that they had frozen him out of being able to sell those World Liberty tokens and that the executives at World Liberty were extorting him to put more investment into the project.

9:27So this tension has been building for some time. There were public spats on X, the social media platform, where Justin Sun was publicly accusing the World Liberty team of not properly giving people access to their token. which in a decentralized finance platform, being able to access your tokens and freely trade them are important functions for crypto traders. So a real downfall in this relationship between Sun and World Liberty and the Trumps, how has World Liberty responded to all this? So Eric Trump came out on social media and said the lawsuit was ridiculous. And Zach Witkoff, who is the CEO of Royal Liberty, said something similar, that the claims are entirely meritless and Royal Liberty is looking forward to getting the case thrown out.

10:24Jill, do you think this is the beginning of some serious cracks in the relationship between the Trump administration and the broader crypto sector? They had grown so close over the past couple of years. It does seem like the major crypto ventures that the Trump family has pursued are either in hot water, such as in the case of Royal Liberty, or just not performing all that well. The Trump meme coin is trading at all-time lows. I think it's down 95 % from its peak. And of course, we have to remember that this is in a wider sell-off in meme coins and other wider troubles in decentralized finance and crypto.

11:10There is, of course, still a great deal of benefit that the crypto industry has gotten from this administration. But it does seem like traders are waking up to the fact that the ventures aren't delivering everything that they promised. Jill Shah is the FT's U.S. trading and crypto correspondent. Thanks so much, Jill. Thank you.

11:40before we go Italy could end up making it to the World Cup after all at the end of March Italy suffered a humiliating loss to Bosnia that meant they did not qualify for this year's tournament but a top envoy to US President Donald Trump has actually asked FIFA to let Italy play instead of Iran here's the key part this special envoy is Paolo Zampoli who is Italian and immigrated to the U.S. in the 1990s. He told the FT that Italy's four World Cup titles justify it competing in place of Iran. But this isn't spooking Tehran, which qualified for the tournament, and said earlier this week that it plans to participate.

12:20And one clarification about last Saturday's show about U.S. shale in the Middle East. While Mike Summers, CEO of the American Petroleum Institute, stressed the importance of restoring traffic through the Strait of Hormuz, The API would like to clarify that the group does not have an opinion on the U.S. government's deployment of American troops to Iran. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Safiya Ahmed, Sonia Hudson, Fiona Simon, and me, Mark Filipino.

12:55Our show is mixed by Alex Higgins and Sam Giovinco. We had help this week from Michaela Tendera, Peter Barber, Michael Lello, and Gavin Kallman. Our executive producer is Topher Forges. The FT's global head of audio is Cheryl Brumley. And our theme song is by Metaphor Music.

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