Taxes: Apple squares off with senators
Tim Cook “came to the lion’s den on Capitol Hill,” said Nelson D. Schwartz and Brian X. Chen in The New York Times. The Apple CEO appeared before a Senate subcommittee in Washington this week to field questions from “furious” lawmakers who wanted to know how Apple “had avoided paying billions in taxes.” Earlier in the week, congressional investigators released a detailed report laying out how Apple subsidiaries “based in Ireland but spanning other regions around the world had helped the company pay as little as one twentieth of 1 percent in taxes” on earnings of $74 billion over the past four years.
The face-off over Apple also raised “the broader question of tax reform,” said Janet Hookand Danny Yadron in The Wall Street Journal. Multinational companies have long complained that U.S. tax laws give “U.S. companies reason to park foreign earnings overseas: They are taxed only when brought back to the U.S.” The Apple hearing “suggested that both corporate CEOs and policymakers agree that the U.S. tax code is in dire need of a makeover.” Cook said Apple pays “every single dollar” of U.S. taxes it owes and has “no current plans” to repatriate the more than $100 billion it keeps offshore.
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Banks: Shareholders uphold Dimon’s dual role
Jamie Dimon “just got more powerful,” said Nick Summers in Businessweek.com. The JPMorgan Chase chairman and CEO defeated a proposal this week that would have stripped him of one of his titles, “after a year that saw record profits—and the most reckless trading loss in the bank’s history.” Just a third of shareholders voted to split Dimon’s jobs, despite fierce lobbying from pension funds and good-governance groups. An “implied threat” also hung over the vote, after Dimon suggested he might leave the bank if shareholders voted to split his role.
Airlines: Dreamliner flies again
The Boeing 787 Dreamliner is back in action, said Gregory Karp in the Chicago Tribune. Last week, United Airlines resumed Dreamliner service, weeks after aviation regulators cleared the plane to resume flight. The CEOs of Boeing and United were both aboard the Dreamliner from Houston that touched down at Chicago’s O’Hare International Airport “early and without incident.” Though highly touted for its fuel efficiency, the 787 had been mired in production delays before overheating batteries forced a worldwide grounding earlier this year.
Crime: SAC may face racketeering charges
Federal prosecutors are considering charging hedge fund SAC Capital Advisors under a law designed to fight organized crime, said Michael Rothfeld in The Wall Street Journal. The potential strategy “comes amid an escalating investigation” into whether SAC’s billionaire founder, Steven Cohen, traded on inside information. Last week, SAC told investors it would stop providing “unconditional” cooperation to government investigators after prosecutors subpoenaed Cohen and other executives to testify before a grand jury. Legal experts said Cohen is likely to assert his Fifth Amendment right against self-incrimination.
M&A: Seamless and GrubHub to merge
Ordering takeout just got easier, said Tiffany Hsu in the Los Angeles Times. Seamless North America and GrubHub Inc. announced that they would merge into a single company, extending online ordering services to “20,000 eateries in more than 500 U.S. cities.” The companies said that they helped restaurants generate $875 million in gross food sales last year, while raking in more than $100 million in combined revenue. A spokeswoman said the merged company would announce a new name and marketing strategy once regulators approve the deal.
