When the CEO works from the beach

One fintech IPO fight to start: The UK Treasury intends to emphasise London’s appeal in planned talks with Revolut as Britain’s most valuable fintech continues to favour a potential New York listing after securing a critical UK banking licence.

In today’s newsletter:

• Brian Niccol’s generous pay package

• Inside hedge funds’ latest holdings

• Indian telecoms giant’s new stake in BT

New Starbucks CEO’s work-from-beach deal

Investors rejoiced this week when they learned that Starbucks chief executive Laxman Narasimhan would be swapped out for Chipotle boss Brian Niccol.

Just how joyful? The coffee chain’s valuation surged by $20bn on Tuesday — the company’s biggest ever single-day gain.

A highly sought-after executive such as Niccol comes at a cost, and on Wednesday, we learned just how sweeping Starbucks’ concessions would be for the new heir in regulatory filings.

Niccol’s hiring package is one of the largest in US corporate history, and four times larger than the sign-on deal for his predecessor Narasimhan.

Here are just some of the details: Niccol gets to work indefinitely from a small office Starbucks will set up for him in Newport Beach, California — about 1,600km (or 1,000 miles) away from the coffee chain’s headquarters in Seattle. He’ll also get an assistant of his choosing.

Then there’s the pay. The salary comes in stages: to start, he’ll get a $10mn cash bonus and another $75mn in equity grants designed to pay out over time. On top of that, he’ll earn a $1.6mn annual salary plus a target cash bonus worth about $3.6mn (depending on how Starbucks does).

Finally, there’s a long-term equity grant with an annual target value of $23mn — which will be paid out over multiple years. That all adds up to a pay package worth up to $113mn.

While Niccol will technically be based in Newport Beach — a small posh city just south of Los Angeles — the recent turmoil at Starbucks means he’ll surely have to travel extensively to assuage partners and investors that things are now under control.

The regulatory filing also says he’ll visit the HQ regularly and establish a secondary residence in Seattle.

Whether employees should be able to work remotely is still a fierce debate among the country’s biggest companies.

Just last week, former Google CEO and executive chair Eric Schmidt shamed his former employer in a video: “Google decided that work-life balance and going home early and working from home was more important than winning.”

He quickly walked back the statement, but it gave us a peek into the rift that still exists in the C-suite when it comes to remote work.

Hedge funds can’t agree on Nvidia

It’s that time of the year again when we get a glimpse at what some of the world’s largest hedge funds have been up to.

The FT’s Rafe Uddin and Will Schmitt combed through the latest 13F filings, which show the holdings of institutional investors with more than $100mn under management.

One of the biggest takeaways: hedge funds can’t agree on Nvidia, with sharp divisions forming over the outlook for the chipmaking giant.

Citadel and DE Shaw slashed their holdings in the chipmaker ahead of this month’s market rout, while Renaissance and Marshall Wace boosted their positions, according to the regulatory filings this week.

Ken Griffin’s Citadel ditched about 500,000 shares of Nvidia in the second quarter of this year, and now holds around $19mn worth of stock. DE Shaw more than halved its holding to $1.4bn worth of shares by the end of June.

Their moves to reduce exposure to Nvidia follows Elliott Management telling investors last month that the company’s stock was in “bubble land” and its share price “overhyped”.

Elliott probably felt vindicated when last week’s market rout saw Nvidia shed about $400bn in value in a matter of minutes, with panic among investors over the outlook for the global economy. (Its shares have since rebounded some.)

Among other members of the so-called Magnificent Seven megacap tech stocks, funds on average added to positions in Apple and Microsoft while shedding some holdings in Alphabet, Amazon, Meta and Tesla.

Some other highlights: Baupost and Marshall Wace picked up shares in Herbalife, the multilevel marketing company that Pershing Square’s Bill Ackman went after with an ill-fated $1bn short bet years ago.

Ackman has since sold out of the position, but in February he celebrated his “psychological short” when the shares hit a 14-year low.

Meet Indian telecoms tycoon Sunil Bharti Mittal

Almost three decades ago, then-UK prime minister John Major hailed BT’s acquisition of a 21 per cent stake in a phone operator owned by Sunil Bharti Mittal as “an indication of the strength of our economy” during a visit to Bengaluru.

Now, there’s a dramatic reversal. Indian politicians are the ones cheering, after Mittal’s Bharti Enterprises struck a deal to become the former British telecoms monopoly’s largest investor.

The company has agreed to buy a 24.5 per cent stake — roughly $4bn — from Franco-Israeli billionaire Patrick Drahi’s Altice.

Bharti Airtel, the anchor of Mittal’s conglomerate, has grown tremendously since its start in 1995. Today it’s one of the world’s biggest network providers, and dwarfs BT.

The acquisition has been lauded as symbolic of India’s increasing economic might, and is part of a trend of national champions acquiring emblematic assets from its former colonial master. 

Commerce minister Piyush Goyal reposted on X instructions made a decade ago by Prime Minister Narendra Modi: “I want Indian companies to become multinational.”

Mittal has been on an international deal spree even before Modi came to power. In 2010, Bharti Airtel took control of the African network owned by Kuwait’s Zain in a $10.7bn deal.

Modi “wants certain businesses to go outside of India and represent”, said one person close to the billionaire. Bharti is “one of those enterprises”.

Job moves

• Lara Warner, the former Credit Suisse risk and compliance chief who departed after twin crises at Greensill Capital and Archegos Capital Management, has joined regulatory advisory group The Starling Trust. 

• Hedge fund Rokos Capital Management has appointed Matthew Sebag-Montefiore as chief executive, Bloomberg reports. He will take on the role pending regulatory approval, following the departure of former chief Mark Edwards earlier this year.

Smart reads

Diet pill In 2018, the Swiss drugmaker Roche passed on an anti-obesity drug. It could now become a leading $14bn-a-year treatment, the FT reveals.

Secret sabotage The Wall Street Journal reveals how drinks, private businessmen, a top general and a rented yacht all came together to blow up the Nord Stream pipeline.

Elliott’s spin-offs There’s a rapidly growing group of new hedge funds that all share the same trait: their founders previously worked at Elliott Management, Business Insider reports.

News round-up

SoftBank discussed AI chips tie-up with Intel to rival Nvidia (FT)

Edgar Bronfman prepares bid for Paramount and its parent National Amusements (WSJ)

BDO sinks to bottom of US audit quality league table (FT)

Dubai’s DP World hit by higher financing costs and Red Sea crisis (FT)

Kroger plans $1bn in price cuts after Albertsons merger (Bloomberg)

Ørsted scraps flagship European green fuels project (FT)

Nigerian jets ordered to be seized in Chinese company dispute (FT)