With a new office at Penn, returning citizen Joe Biden came home to the University of Delaware last Friday to debut his Biden Institute.
The former vice president convened a panel, titled "Win-Win: How the Long View Works for Business and the Middle Class," which delivered this message: Big corporate CEOs have America's best interests at heart; hedge fund managers who push CEOs around are bad.
Biden apologized that more of his pals from the glittering yearly global leaders' conference at Davos, and his own vice presidential dinner table, couldn't make the free event, which attracted several hundred people to Mitchell Hall. Virgin Airways founder Sir Richard Branson, BlackRock investment boss Larry Fink, and Dow Chemical chief Andrew Liveris sent regrets. They'll visit some other time, he told the friendly student crowd.
Beyond the name-dropping, the ex-VP stoked speculation he's not done with White House dreams two days later when he led a Democratic rally in New Hampshire, that classic presidential proving ground.
But in Delaware, Biden, who will be 77 in 2020, insisted, "Guys, I'm not running."
The investment industry veterans who answered Biden's summons praised long-term vision, which they idealized in CEOs like Dow's Liveris and ex-DuPont Co. boss Ellen Kullman.
They decried the "short-term" focus of the CEOs' fierce critics, like Liveris nemesis Dan Loeb and Kullman critic Nelson Peltz, who pushed the two companies towards a cost-cutting merger. Which has, by the way, driven both stocks to all-time highs.
Middle-class prosperity depends, Biden said, "on what companies decide to do with their profits." He asked: Will they buy "research, training, equipment," and other jobs-creating activities? "Or shareholder payout?"
There was no mention that Liveris has pumped billions in Dow profits into shareholder dividends, buybacks and acquisition premiums, while cutting jobs at Rohm and Haas and other acquired companies. Dow and DuPont plan another $3 billion-plus in merger-related "synergies" this summer.
But Biden's panelists weren't noting those contradictions. Jeff Sonnenfeld, the senior associate dean of leadership programs at the Yale School of Management, denounced hedge funder Peltz and company as "frat-boy bullies" who "make stuff up" in their "sleazy corporate campaigns."
Sonnenfeld also denounced DuPont's former board, which included current CEO Edward Breen, as a "weak-kneed" group who "sold off their future to gain "a slight bump in the stock price." He said hedge funds like Peltz"s Trian perform poorly over time, crippled by what Biden calls "short-termism."
When Sonnenfeld said Kullman had been wrongly ousted after just "two bad quarters," it was left to professor Charles Elson, head of U.D.'s Weinberg corporate-governance center (and a friend and neighbor of Kullman's) to protest that DuPont's problems were "a little more complicated." Richly paid CEOS often underperform, Elson added: "Hedge funds are a symptom."
But Biden's theme resonated with Carsten Stendevad, a former Danish national pension manager now at Bridgewater Associates, who said studies show long-term investing works best — so persistent quarterly-earnings pressure is "a paradox."
Kip Tindell, cofounder of the Container Store, said he's glad the "imperial CEOs" of unhappy memory are being replaced with "servant-leaders" who apply "conscious capitalism."
Even Mark Wiseman, global head of active equity at BlackRock, blamed his fellow investors for beating up on CEOs. The master-servant line of control, from long-term investors to money managers, is "broken," he lamented. Blame passive boards and shareholders: "You get the government you deserve."
Later, Elson laughed at how his peers lined up behind CEOs, "the same guys who take hundreds of millions of dollars home for crummy results," he told me. "Of course the CEO calls [demand for change] 'short-term-ism.' That protects the bad CEO."
Is Biden chumming up to CEOs to enlist them with Democrats? Their loyalty is to the opportunity: Liveris was once tight with Obama; he now heads Trump's corporate advisory council.