Morning Brew Daily: Trump Targets DEI Programs & Walmart Managers Make $600K?

Release Date: January 24, 2025
Host: Neal Freyman & Toby Howell

Introduction

In this episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell dive deep into pressing topics shaping the business and economic landscape. From former President Trump's aggressive stance on Diversity, Equity, and Inclusion (DEI) programs to the surprising surge in compensation for Walmart's regional managers, the show unpacks the implications of these developments. Additionally, they explore controversies in the film industry, stock market movements, significant legal settlements, and quirky stories making headlines. Notable quotes from the hosts provide insight and context throughout the discussion.

Trump's Campaign Against DEI Programs

Former President Donald Trump has intensified efforts to dismantle DEI initiatives within the federal government and the broader corporate sector. Through multiple executive orders issued over the past week, Trump has targeted DEI mandates, causing significant upheaval in corporate America.

Key Points:

• Executive Orders: Trump’s directives include placing DEI office employees on administrative leave and threatening adverse consequences for non-compliance with DEI reporting.
• Corporate Response: Companies like American Media and Walmart have proactively rolled back DEI programs, anticipating regulatory changes. However, giants such as Costco, Apple, and Microsoft remain steadfast, citing long-standing commitments to diversity and inclusion that date back decades.
• Supreme Court Influence: The Supreme Court's decision to ban affirmative action in higher education has emboldened Trump’s administration to push for similar measures in the private sector.
• Shareholder Proposals: Attempts to use shareholder votes to dismantle DEI policies have largely failed, with proposals against major corporations like Apple and Walmart being rejected by over 98% of shareholders.

Notable Quote: Neal Freyman reflects on the historical context of DEI initiatives:
“In 2020 we saw a boom in DEI... Fast forward to the first two weeks of this year... there was a 93% decline. You can really see the boom and bust of this particular department in corporate America.” [05:22]

Walmart Managers' Compensation Surge

Amidst corporate restructuring, Walmart has introduced a new compensation scheme for its regional managers, resulting in substantial salary increases.

Key Points:

• Salary Boost: Regional managers can now earn up to $620,000 annually, a $50,000 increase from the previous cap, primarily through higher bonuses and stock awards.
• Job Responsibilities: These market managers oversee approximately a dozen stores each, managing up to 3,600 employees in total. The role demands extensive travel and meticulous oversight to ensure seamless store operations.
• Corporate Strategy: Unlike other corporations reducing managerial layers to cut bureaucracy, Walmart's strategy underscores the critical role these managers play in maintaining operational excellence.
• Market Impact: Walmart's shares surged over 80% last year, reaching a market capitalization of nearly $800 billion, reflecting investor confidence in its management and strategic direction.

Notable Quote: Toby Howell emphasizes the uniqueness of Walmart’s approach:
“These are basically like companies in themselves that they're managing. They're managing a portfolio of stores... It is a pure management role.” [20:36]

Oscar Nominations and AI Controversy

The latest Oscar nominations highlight a shift towards more progressive and under-the-radar films. However, the use of artificial intelligence (AI) in film production has sparked debate.

Key Points:

• Top Nominees: Films like Amelia Perez and The Brutalist lead with 13 and 10 nominations respectively, showcasing diverse and innovative storytelling.
• AI in Filmmaking: The Brutalist faced backlash for using AI to alter an actor’s voice, reigniting debates about the ethical implications of AI in creative industries.
• Industry Perspective: Hosts discuss historical uses of technology in film, noting that AI is not a novel tool but its application has become controversial in recent years.

Notable Quotes: Neal Freyman counters the AI backlash by referencing past practices:
“If you just go back a little bit in cinema history, you find that using AI is nothing new.” [15:12]

EA Sports Faces Market Challenges

EA Sports has seen a notable decline in its stock price following disappointing sales of its latest soccer video game installment, FC25.

Key Points:

• Sales Decline: FC25 failed to meet sales expectations, with player dissatisfaction stemming from a lack of innovation and persistent in-game bugs.
• Financial Impact: EA forecasts a mid-single-digit decline in live service Net Bookings and has reduced its 2025 revenue forecast by approximately half a billion dollars.
• Competitive Landscape: Unlike EA, other game titles such as Grand Theft Auto 6 are performing strongly, highlighting EA's struggles in maintaining its market position.

Notable Quote: Toby Howell underscores the severity of EA’s challenges:
“EA, that's up 16%. That's its worst day in many years.” [22:11]

Opioid Crisis Settlement Nears Closure

A landmark settlement has been reached to address the opioid crisis, marking a significant development in a prolonged legal battle.

Key Points:

• Settlement Details: The Sackler family and Purdue Pharma have agreed to a $7.4 billion settlement with 15 states. This includes the Sacklers paying up to $6.5 billion over 15 years and Purdue Pharma contributing nearly $900 million.
• Previous Agreements: The settlement modifies earlier deals that were struck down by the Supreme Court due to unfavorable bankruptcy terms for claimants.
• Funding Allocation: The funds are designated for opioid addiction treatment, prevention, and recovery programs across the United States.

Notable Quote: Neal Freyman highlights the complexity of the settlement:
“States have to pay into a legal defense fund for the Sacklers... it's a very weird thing to wrap your mind around.” [24:42]

CNN's Strategic Shift in the Digital Age

In response to declining viewership, CNN has announced significant restructuring to focus on digital platforms.

Key Points:

• Job Cuts and Hiring: CNN will cut 200 jobs from its traditional cable TV operations and invest similarly in its digital infrastructure.
• Streaming Service Launch: A new streaming service is slated for release later in the year to adapt to changing audience consumption patterns.
• Viewership Decline: Recent events, including the inauguration, saw a historic low in TV viewership, exacerbating the need for CNN to pivot towards digital solutions.

Notable Quote: Toby Howell comments on the broader industry trend:
“It's endemic to the entire cable news industry... it's something that is affecting the entire cable news industry.” [27:21]

Rookie MLB Card Sparks Negotiations

An 11-year-old collector discovered a rare Paul Skeens autograph card, leading to high-stakes negotiations with the Pittsburgh Pirates.

Key Points:

• Card Rarity: The one-of-a-kind card has become highly sought after in the collector community, fetchingly potential auction prices of $1 million or more.
• Pirates’ Offer: The team proposed a package including season tickets and exclusive experiences, which has been widely criticized as insufficient.
• Collector's Dilemma: The young collector faces pressure to maximize the card’s value against appealing but inadequate offers.

Notable Quote: Neal Freyman humorously questions the Pirates’ offer:
“The collector lives in L.A. and he wants the Pirates are asking him to come to Pittsburgh and go to Pittsburgh Pirates games. Like I would say no to that.” [29:18]

Australia’s Corpse Flower Blooms

The rare blooming of Australia’s corpse flower, dubbed "Putricia," has captivated global audiences with its unique and pungent aroma.

Key Points:

• Bloom Rarity: Occurs once every 15 years, making each bloom a significant event for botanical enthusiasts and the general public alike.
• Global Fascination: The event has attracted nearly 1 million viewers through livestreams, sparking meme culture and online engagement.
• Symbolic Significance: Zoo presidents liken the corpse flower’s blooming to the presence of pandas, emphasizing its status as a natural spectacle.

Notable Quote: Toby Howell draws a parallel with other rare animals:
“The corpse flower is the panda of, you know, the fauna.” [30:35]

Conclusion

Neal Freyman and Toby Howell provide a comprehensive analysis of today's influential topics, from high-stakes corporate decisions and political maneuvers to unique cultural phenomena. Their insightful commentary and inclusion of memorable quotes offer listeners a nuanced understanding of the current economic and social climate.

Notable Quotes:

• Neal Freyman: “Are you looking for words of affirmation? Go to your significant other. Go to a therapist.” [01:41]
• Toby Howell: “These are basically like companies in themselves that they're managing.” [20:36]
• Neal Freyman: “AI is nothing new. Using tech in post production is nothing new.” [15:12]

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