Wall Street Brings Back Bigger Bonuses & Trouble in Mega-City Neom Paradise?
Nov 13, 2024
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Wall Street is seeing a comeback with rising bonuses for finance professionals after a two-year slump. Activist investor Elliott Management is shaking things up at Honeywell, calling for significant restructuring. Meanwhile, the futuristic city of Neom faces setbacks with the sudden departure of its CEO. On the tech front, Amazon is innovating with smart glasses for delivery drivers to streamline operations. The chat wraps up with insights on today's biggest headlines.
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Quick takeaways
Wall Street is experiencing a revival in bonuses due to increased corporate deal-making and a favorable stock market after two years.
The Neom project faces significant challenges, including CEO resignation and skyrocketing costs, jeopardizing Saudi Arabia's economic transformation efforts.
Deep dives
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Rising Bonuses on Wall Street
Bonuses in the financial sector are expected to increase significantly for the first time since 2021, driven by a surge in corporate deal-making and a favorable stock market. This year, debt underwriters, who help corporations refinance or raise new debt, are anticipated to see substantial bonuses, heightened by the thawing of the M&A market. As investment activity begins to pick up after two years of decline, nearly all areas within finance are likely to experience pay jumps. Despite this optimism, the retail and commercial banking sectors will not see similar increases due to weak loan demand.
Honeywell Faces Pressure to Split Up
Honeywell's future appears uncertain as activist investor Elliott Management pushes for the company to split into two separate entities: aerospace and automation. Elliott argues that the current conglomerate model is inefficient and has hindered share price growth, mirroring trends seen in the broader market where other conglomerates like GE have successfully split. Honeywell’s aerospace division is thriving, but its automation sector has underperformed, prompting the call for greater focus. The activist investor's significant stake demonstrates a growing sentiment that breaking up may lead to improved shareholder value.
Challenges for Saudi Arabia's Neom Megacity
The ambitious Neom project, a futuristic city being built in the Saudi Arabian desert, faces turmoil with the recent resignation of its CEO amid ongoing delays and increased costs. Initially projected at $500 billion, costs have skyrocketed, with the Line, its centerpiece, now estimated to exceed $2 trillion. These financial pressures, along with the struggle to secure foreign investment, complicate the project's viability. As Neom represents a crucial part of Saudi Arabia's goal to diversify away from oil dependency, its struggles raise concerns about the future of the nation's economic transformation.
Episode 452: Neal and Toby chat about the return of Wall Street’s big bonus-time after its 2 year drought of shrinking payouts. Then, Activist investor Elliott Management has taken a massive stake in Honeywell and is calling the company to break itself apart. Plus, the CEO of Saudi Arabia’s Neom has suddenly left, which marks another setback for the anticipated ‘city of the future’. Meanwhile, Amazon is also getting into the smart glasses game, this time looking to supply its delivery drivers to maximize drop-off efficiency. Lastly, the biggest headlines to close out your day.
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