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    Wendy’s taps PepsiCo exec Kirk Tanner as new CEO as burger chain fights off activist pressure

    Wendy’s has tapped a new chief executive, Kirk Tanner, who has spent more than three decades with PepsiCo.
    Outgoing CEO Todd Penegor has been at the helm of the company since 2016.
    Wendy’s has overtaken Burger King as the second-largest burger chain in the U.S. by sales, but the chain has struggled with the slowdown in low-income consumers’ spending.

    A ‘now hiring’ sign outside of a Wendy’s on October 08, 2021 in Miami, Florida.
    Joe Raedle | Getty Images

    Wendy’s has tapped PepsiCo veteran Kirk Tanner as its new chief executive, effective Feb. 5, as the burger chain tries to boost its share price and ease pressure from activist investors.
    Tanner is currently head of Pepsi’s North American beverage business. Prior to his time at the company’s drink unit, he spent three years leading Pepsi’s global food service division. In total, he has spent more than three decades with Pepsi.

    Kirk Tanner, chief executive officer of North America beverages for PepsiCo Inc., speaks during the Bloomberg Power Players Summit in Miami, Florida, U.S., on Friday, Jan. 31, 2020. 
    Marco Bello | Bloomberg | Getty Images

    Outgoing Wendy’s CEO Todd Penegor has been at the helm of the company since 2016. Under his leadership, Wendy’s successfully launched its breakfast menu nationwide, helping the company overtake Burger King as the second-largest U.S. burger chain by sales.
    But the chain has also faced some setbacks during his tenure. Low-income consumers have cut back their spending at Wendy’s, and a large franchisee declared bankruptcy in November.
    Shares of Wendy’s have fallen 14% over the last year, dragging its market cap down to $3.97 billion.
    Activist investor Blackwells Capital is planning to challenge Wendy’s board, Reuters reported in December. The CEO transition could change the firm’s mind. But if Blackwells nominates its own board candidates, it’s kicking off a fight with another activist investor: Nelson Peltz, who is chair of Wendy’s board.
    A year ago, Peltz dropped an effort by his firm Trian Fund Management to acquire the company, signaling confidence in its performance as Peltz pursued a proxy fight with Disney. Trian has been an investor in Wendy’s since 2005.

    Wendy’s is expected to release its fourth-quarter earnings on Feb. 15.
    Pepsi also announced Thursday that Ram Krishnan, the company’s chief commercial officer and head of its international beverage division, will succeed Tanner as CEO of its North American beverage unit. More

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    Birkenstock shares slump as shoe company warns on profit outlook during first earnings since IPO

    Birkenstock shares slumped Thursday after the company warned profit margins could be hit in the year ahead.
    The shoe company said it will invest in scaling up its business in 2024.
    The company made its public debut in October, opening at $41 per share.

    A Birkenstock banner hangs outside the New York Stock Exchange in New York on Oct. 11, 2023, as Birkenstock launches an initial public offering.
    Angela Weiss | Afp | Getty Images

    Birkenstock shares slumped 7% Thursday after the company warned about its 2024 outlook during its first earnings report since its initial public offering.
    The German shoe brand reported a quarterly loss of about 28.3 million euros, or about $30.8 million, with an adjusted EBITDA margin of over 30% for its prior fiscal year. Company executives also warned that 2024 margins will likely face a “modest headwind” as the company spends more money to ramp up operations — even as it expects revenue to grow 17% to 18%.

    In its earnings report, Birkenstock said it aims to substantially grow and invest nearly 150 million euros in retail store expansion and production capacity in 2024.
    Birkenstock CEO Oliver Reichert said in a statement that last year was the company’s most successful year, and he remains confident the company can grow its business in 2024. Reichert said he plans to tap into “significant” geographic and production expansion while the company remains “undeterred” by the broader macroeconomic landscape.
    The company traded for the first time in October, opening at $41 per share. The debut came nearly 250 years after the company was founded by German cobbler Johann Adam Birkenstock.
    “The best thing for the brand would be staying family owned, but within the family there were so many problems, so we go for the second-best option and that’s to be public and give the brand back to the people,” Reichert said during the company’s IPO.Don’t miss these stories from CNBC PRO: More

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    Nelson Peltz is launching a blitz on Disney. Here’s what he says is next in his proxy fight

    Trian will release a dense white paper explaining its full case for why investors should elect Nelson Peltz and former Disney CFO Jay Rasulo in the coming weeks.
    Peltz said in a CNBC interview that he and Rasulo will be like “Batman and Robin” if they get elected to the Disney board.
    Earlier Thursday, Peltz spoke to CNBC’s “Squawk on the Street.”

    Activist investor Nelson Peltz.
    David A. Grogan | CNBC

    Disney and its investors are going to start hearing a lot from activist investor Nelson Peltz.
    In the coming weeks, Peltz’s Trian Fund Management plans to post on X, formerly known as Twitter, and add content to its website RestoreTheMagic.com as a crescendo to launching a dense white paper explaining its case to add Peltz and former Disney Chief Financial Officer Jay Rasulo to Disney’s board. That paper will be released in a couple of weeks, Peltz said in a CNBC interview after appearing on “Squawk on the Street” earlier Thursday.

    In February, Trian plans to meet with proxy solicitors Glass Lewis and ISS, after which it will begin lobbying shareholders through March and up to Disney’s planned annual shareholder meeting. Trian expects the gathering will be in April. Disney’s annual meeting last year was April 3.
    Trian filed a preliminary proxy statement Thursday, which outlined some of the reasons Peltz believes Disney shareholders should elect him and Rasulo to the board as they push to boost its stock performance. Those include getting Disney streaming profit margins to 15% to 20% by 2027. Disney’s streaming business currently loses money and won’t break even until later this year, CEO Bob Iger has said.
    Trian wants Disney to be more transparent with its businesses. Disney plans to launch a direct-to-consumer ESPN service either later this year or in 2025 as the sports network’s traditional cable subscription model fades. Before it debuts, Trian wants specific short-term profitability targets to ensure it’s a viable business.
    “What they really need is accountability,” said Peltz.
    After it reports earnings Feb. 7, Disney will release its definitive proxy materials, which include the date of the annual meeting.

    Typically, both Trian and Disney will then make their arguments to proxy advisory services Glass Lewis and ISS, followed by solicitation of shareholders and recommendations by the firms. That advice is critical because it can sway large investors and index funds. Neither side usually knows who is winning until days or hours before the annual meeting because those massive investors often vote late in the process.

    The dynamic duo

    Trian has targeted the Disney board for being too connected to Iger, who has five times renewed his contract to push back his retirement. Iger has said he plans to leave Disney in 2026, and has been actively seeking a successor since he returned to Disney at the end of 2022.
    Peltz has been on several boards, including Proctor & Gamble and Mondelez, which have named new CEOs. Peltz said his success in finding top executives is part of why he should join Disney’s board.
    “I do a lot of executive searches,” said Peltz. “I’m like a headhunter.”
    While Peltz outlined why he feels Disney’s stock performance can improve with his presence on the board, he’s still just one person. Even if Rasulo is elected, they’ll still be only two voices on a Disney board Peltz has criticized for being in Iger’s pocket.
    Still, Peltz said boards sometimes simply need to be jumpstarted by individuals who aren’t afraid to question longtime CEOs such as Iger.
    “We’re going to be Batman and Robin,” Peltz said. “Boards can get turned around quickly if they start to hear some good points.”
    WATCH: CNBC’s full interview with Trian Partners founding partner Nelson Peltz

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    NBA postpones second Warriors game after assistant coach’s death

    The National Basketball Association said a second Golden State Warriors game has been postponed.
    The team’s assistant coach Dejan Milojević died earlier this week.
    The Warriors are scheduled to play next on Wednesday against the Atlanta Hawks.

    Assistant coach Dejan Milojević and Kevon Looney, #5 of the Golden State Warriors, talk before the game against the Los Angeles Lakers during the Western Conference Semifinals in the 2023 NBA Playoffs at Crypto.com Arena in Los Angeles on May 6, 2023.
    Noah Graham | National Basketball Association | Getty Images

    The National Basketball Association said a second Golden State Warriors game has been postponed after the team’s assistant coach Dejan Milojević died earlier this week.
    The Warriors’ matchup against the Dallas Mavericks, scheduled for Friday, will be rescheduled to a yet-to-be-announced date, the league announced in a statement. ESPN will instead broadcast the Brooklyn Nets versus Los Angeles Lakers Friday night.

    The Warriors announced on Wednesday that Milojević suffered a heart attack at a private team dinner and was sent to the hospital, where he later died.
    “We are absolutely devastated by Dejan’s sudden passing,” said Warriors Head Coach Steve Kerr in a press release. “This is a shocking and tragic blow for everyone associated with the Warriors and an incredibly difficult time for his family, friends, and all of us who had the incredible pleasure to work with him.”
    Milojević was in his third season on the Warriors’ coaching staff, including the team’s 2022 NBA Championship run. Before joining the team, he served as the head coach for the KK Mega Basket in Belgrade, Serbia, from 2012 to 2020. He was also a member of summer leagues for the Atlanta Hawks, San Antonio Spurs and Houston Rockets.
    The Warriors are scheduled to play next on Wednesday against the Atlanta Hawks.Don’t miss these stories from CNBC PRO: More

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    Nelson Peltz states his case for joining the Disney board

    Activist investor Nelson Peltz is stating his case for joining Disney’s board.
    Peltz’s Trian Fund Management, in formally nominating Peltz and former Disney CFO Jay Rasulo to the media giant’s board of directors Thursday, made a list of initiatives and performance targets they’d pursue if elected.
    The proxy battle comes as CEO Bob Iger tries to streamline the sprawling media company to rein in spending and make its Disney+ streaming platform profitable.

    Activist investor Nelson Peltz is stating his case for joining Disney’s board.
    Peltz’s Trian Fund Management, in formally nominating Peltz and former Disney Chief Financial Officer Jay Rasulo to the media giant’s board of directors Thursday, made a list of initiatives and performance targets they’d pursue if elected.

    In a proxy filing, Peltz and Rasulo promised to “finally complete a successful CEO succession,” alluding to CEO Bob Iger’s consistent delaying of his retirement date and his return after the firing of former CEO Bob Chapek.
    Trian also said it will “align management pay with performance,” calling out Iger’s $31.6 million pay package last year while Disney stock was little changed, underperforming the S&P 500 for 2023.
    Trian also aims to target and achieve “Netflix-like margins” of 15% to 20% by 2027, with Peltz adding that he thinks Netflix is Disney’s biggest competition.
    The proxy battle comes as Iger tries to streamline the sprawling media company to rein in spending and make its Disney+ streaming platform profitable. Iger has instituted broad restructuring, including thousands of layoffs.
    Peltz reiterated in a CNBC “Squawk Box” interview Thursday morning that he believes Disney’s current board oversight is “awful.”

    “They said I have no media experience — I don’t claim to have any,” Peltz said Thursday. “But I will tell you, I don’t think they have much media experience.”
    Disney has thus far rejected Peltz’s push to join the board.
    In the proxy filing, Peltz also touched on the future of ESPN, which he called the “crown jewel” of the company, with the goal of creating a solidified and detailed payback period and business plan for building out the platform. Iger has previously said Disney is prioritizing turning ESPN into the “preeminent” digital sports platform.
    Peltz called for a board-led review of studio creativity to “restore leadership accountability” and reclaim the company’s leading box office position.
    Peltz and Rasulo aim to execute a clear vision for the brand’s theme parks, targeting “high-single digit operating income growth,” according to the filing.
    Peltz told CNBC on Thursday that he paid a visit to Disney World last week.
    “It was fascinating because … we didn’t have any special passes. We didn’t have any tour guides. … Everybody was nice. I mean, Magic Kingdom and the Hollywood Studios — terrific,” he said. “All the employees were smiling, and that’s probably in large part because they didn’t own any Disney stock.”
    This story is developing. Please check back for updates.Don’t miss these stories from CNBC PRO: More

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    New Morgan Stanley CEO is ‘super bullish’ on hitting financial targets

    Morgan Stanley’s new CEO, Ted Pick, on Thursday expressed confidence his bank will hit financial targets of $10 trillion in client assets and a 20% return.
    Pick, a three-decade Morgan Stanley veteran who took over this month, said he has three priorities: sticking to the strategy laid out by predecessor James Gorman, maintaining the bank’s culture and achieving their targets.

    Morgan Stanley’s new CEO, Ted Pick, on Thursday expressed confidence his bank will hit financial targets of $10 trillion in client assets and a 20% return.
    Pick, a three-decade Morgan Stanley veteran who took over this month, said he has three priorities: sticking to the strategy laid out by predecessor James Gorman, maintaining the bank’s culture and achieving their targets.

    “Ten trillion in wealth and asset management dollars, that’s going to be coming,” Pick said in a CNBC interview at the World Economic Forum in Davos, Switzerland. “We’re going to get there and hit 20% returns. That’s it: 10 and 20. It will take some time, but I’m super bullish.”
    Pick’s predecessor guided Morgan Stanley in the aftermath of the 2008 financial crisis that nearly capsized the investment bank. Gorman transformed the firm into a wealth management giant through a series of savvy acquisitions, while helping rehabilitate trading businesses for a new era on Wall Street.
    The pivot to wealth management boosted Morgan Stanley’s valuation well beyond rivals including Goldman Sachs, but more recently concerns about growth in that business have stymied the stock. Shares of the bank are down 12% in the last year.
    “Part of the reason the boss had so much success is he kind of guided the place to a durable narrative instead of the herky-jerky, unpredictable Morgan Stanley,” Pick said.
    The firm’s “secret sauce” is in the combination of a leading investment bank with its wealth management operations, he added.

    “The name of the game is to sort of balance realistic expectations and build credibility, but have people understanding that we are highly confident of both of these pieces to grow,” Pick said. “The ecosystem of being a leading wealth manager, banking individuals not institutions, and then also covering them as an investment bank or hedging the risk as a trading house, that is unique.”
    What may help matters this year is an expected rebound in corporate mergers and related activities after more than a year of depressed volumes, Pick said. A backlog of deals has been building since before the Covid pandemic began in 2020, he said.
    “There’s a ton of activity buzz,” Pick said. “I think once people start getting going, we’re going to see a bunch of it.”
    The U.S. economy is “probably past peak inflation,” and it’s “not inconceivable” that the Federal Reserve will be forced to cut rates faster than anticipated because of weakening data, Pick added.
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    Deutsche Bank CEO says acquisitions not a ‘priority’ as Commerzbank rumors swirl

    The two German lenders abandoned a merger plan in 2019, but concerns about bank profitability, and reports that the German government’s is considering selling some of its company stakes, have rekindled whispers about a possible tie-up in recent weeks.
    “Obviously with regard to the sharply increased interest rates, you have to think about fair value gaps given the mortgage books of a lot of banks, so I don’t think it is a priority for this year,” Sewing said.

    Christian Sewing, Chief Executive Officer of Deutsche Bank, has acknowledged that a recession in Germany is inevitable, and urged leaders to accelerate its decoupling from China.
    Denis Balibouse | Reuters

    Deutsche Bank CEO Christian Sewing on Thursday said that merger and acquisition activity is not a priority for his group, as speculation resurfaces over the future of domestic rival Commerzbank.
    The two German lenders abandoned a merger plan in 2019, but concerns about bank profitability, and reports that the German government’s is considering selling some of its company stakes, have rekindled whispers about a possible tie-up in recent weeks.

    The state still has a 15% stake in Commerzbank, but Reuters reported earlier this week that Finance Minister Christian Lindner is open to disposing of it.
    The merger of Germany’s two biggest banks would create a combined entity with around $2 trillion in assets, although Deutsche Bank’s low valuation could complicate any such move. The bank trades at around 12 euros per share, a fraction of its book value, and a significant portion of assets would need to be marked down.

    Speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland on Thursday, Sewing appeared to pour cold water on the rumors, at least for now.
    “I wouldn’t say it’s on top of my priority, to be honest. I have always said for years that M&A in the banking industry, particularly in Europe, must come at some time, but most important for that is that certain preconditions are met — preconditions from a regulatory point of view, finalization of the banking union,” Sewing said.
    “Obviously, with regard to the sharply increased interest rates, you have to think about fair value gaps given the mortgage books of a lot of banks, so I don’t think it is a priority for this year.”

    The European Banking Union was created in 2014 and seeks to ensure the bloc’s banking and financial systems are stable.
    In December, Italy’s lower house of parliament voted down reforms to the European Stability Mechanism, the euro zone’s bailout fund, which had been approved by all other euro zone countries.
    This left the bloc unable to implement a portion of its banking union legislation described by Eurogroup President Paschal Donohoe as “a key element of our common safety net.”
    “Therefore, we are focusing on our own business,” Sewing concluded. “If, in this own business, there are possibilities and options for doing the one or the other smaller add-ons, like we have done with Numis, then obviously we are looking at it.” More

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    The Middle East faces economic chaos

    Just over 100 days after Hamas’s brutal attack on Israel started a war in Gaza, the conflict is still escalating. On January 11th America and Britain started attacking Houthi strongholds in Yemen, after months of Houthi missile strikes on ships in the Red Sea. Five days later Israel fired its biggest targeted barrage yet into Lebanon. Its target is Hizbullah, a militant group backed by Iran.A full-blown regional war has so far been avoided, largely because neither Iran nor America wants one. Yet the conflict’s economic consequences are already vast. Trade routes are blocked, disrupting global shipping and devastating local economies. The Middle East’s most productive industries are being battered. And in Lebanon and the West Bank, growing hardship threatens to spark even more violence.Start with trade. Before Hamas’s attack, a fifth of the average Middle Eastern country’s total exports—from Israeli tech to oil from the Gulf—were sent somewhere else in the region. Geopolitical enemies were increasingly trading with each other. Now, the routes that transported more than half of all goods are blocked. Intra-regional trade has collapsed. At the same time, the cost of shipping goods out of the Middle East has risen. That will send many exporters, operating on razor-thin margins, out of business in the months to come.image: The EconomistThe Red Sea used to handle 10% of all goods moving around the world. But since the Houthis began launching missiles, its shipping volumes have dropped to just 30% of normal levels (see chart). On January 16th Shell, an oil and gas giant, became the latest multinational to say it would avoid the Sea.For some of the countries bordering the Red Sea, Houthi missile strikes have far worse consequences. Eritrea’s economy is propped up by fishing, farming and mining exports, all of which travel by sea owing to tense relations with its neighbours. For crisis-stricken Sudan, the Red Sea is the sole point of entry for aid, almost none of which has reached the 24.8m people in need of it since the attacks began.Further disruption could visit financial ruin on Egypt, one of the region’s biggest countries. For its population of 110m, the Red Sea is a vital source of dollars. Its government earned $9bn in the year to June from tolls on the Suez Canal, which links the Mediterranean to the Red Sea. Without the toll revenue, Egypt’s central bank would have run out of foreign exchange reserves, which stood at $16bn (or two months-worth of imports) at the start of 2023. The government would also have faced a yawning hole in its budget, which already relies on cash injections from Gulf states and the IMF.Both crises may materialise in 2024. Egypt’s year-to-date income from the Suez is 40% less that it was this time last year. That puts it at real risk of running out of dollars, which would push its government into default and its budget into disarray.Conflict has also hit the Middle East’s most promising industries. Before October 7th Israel’s tech sector was its brightest bright spot, contributing a fifth of the country’s GDP. Now it is struggling. Investors are pulling funding, customers are cancelling orders and much of its workforce has been called up to fight.Jordan, meanwhile, is suffering from forgone tourism, which would normally constitute 15% of its GDP. Its struggles are emblematic of those across the region: even Gulf states have seen tourist numbers dip. In the weeks after Hamas’s attacks, international arrivals to Jordan fell by 54%. Just like Egypt, the lost revenues leave it perilously close to default.Yet the most dangerous economic consequence of the war may be the hardship inflicted on populations in Lebanon and the West Bank, two powder kegs that could easily explode into more violence. As Israel and Hizbullah trade air strikes, they are destroying southern Lebanon. More than 50,000 people have already been displaced (as well as 96,000 in northern Israel). Repairs will be expensive, but there is no cash left for them: Lebanon has had a shell government since it defaulted in 2019. In recent months its economic freefall has accelerated as foreign tourists and banks, which together make up 70% of its GDP, have deserted the country on the advice of their governments.Things are no better in the West Bank. Of its 3.1m residents, 200,000 are factory workers who used to commute to Israel every day. They are out of work after Israel revoked their permits. Meanwhile, 160,000 civil servants have not been paid since the war began. The West Bank’s government now refuses to accept its tax revenues from Israel (which collects them) after Israel withheld funds that would usually be sent to Gaza. Public services are shutting down, and missed mortgage payments from civil servants risk triggering a banking crisis.The Middle East has long been full of economies on the brink. Israel’s war with Hamas may now tip them over. To make ends meet, their governments have built houses of cards, balancing bail-outs from Gulf states, handouts from America and expensive short-term loans. The risk of it all tumbling down is worryingly high.The rest of the world economy has so far faced few costs from the conflict. Oil prices have remained relatively calm, except for a spike in early January, and the effects on global growth and inflation are likely to be minimal. But if much of the Middle East slides into a debt crisis, all that could change, and fast. It would hit populations that are young, urban and increasingly unemployed. That is a recipe for even more extreme politics in a large group of strategically important, chronically volatile countries. The consequences would reverberate across the world. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More