Happy Friday! It’s June 14, 2024. We have three great stories to wrap up the past few weeks in markets, business, and the economy for you and your family.

Here are the highlights:

• Apple’s next big update. The latest on iOS, MacOS, and iPadOS.
• Big money for Elon Musk. The Tesla CEO’s $56 billion pay package has been re-approved.
• Consolidating Paramount. When will the entertainment giant finally sell?

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Apple Embraces AI In Latest Software Upgrades

It’s not the iPhone anymore. It’s the aiPhone… and the aiMac and aiPad. This week, Apple showed off the latest generation of the operating systems that power their hardware products — which included a slew of new features dedicated to artificial intelligence. However, you might be surprised to hear that they’re not powered by Apple.

• Who’s behind Apple’s AI? Apple Intelligence (AI) will be powered by ChatGPT creator OpenAI, which is behind the new AI-powered Siri, new AI writing and image generation, and real time call transcripts, among other features. There will also be a ChatGPT integration, which could help users with other tasks.
• But most users won’t have access: You didn’t read that wrong. Apple’s handset sales have been wavering in recent quarters — and what better way to sell customers than by putting new features behind a new phone? Apple decided to restrict its new AI features to the iPhone 15 Pro and Pro Max. Oh, and it’ll only be available in English at launch. That means 90% of users won’t even be able to use the features.
• What other features did Apple announce? Besides AI features, Apple also announced a number of cool new updates for its devices. Among them are hiking and walking routes in Apple Maps, updates to Apple Pay and Wallet, and the ability to text via satellite if you’re in a place without service.

Why does it matter for EarlyBird families?

Another year, another iOS update. It never hurts to stay studied on what’s up with America’s most popular smartphone brand — even if you aren’t going to be spending over $1,000 to upgrade to a new iPhone to access all the features. The new updates will land later this year, likely in September, as Apple lines up its next generation iPhone.

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Big Money for Musk After Shareholders Approve Comp Package

Tesla might be cutting the price of its industry-leading electric vehicles, but there’s one thing its shareholders absolutely won’t abide by: striking its CEO’s record-setting compensation package. This week, shareholders approved a $56 billion pay package for Tesla CEO Elon Musk — which was struck down by a judge last month.

• What happened? Last month, a Delaware judge struck down Elon Musk’s $56 billion compensation package, alleging that he played an undue role in its construction — and sided with a shareholder who considered the package to be excessive. Despite that, shareholders overwhelmingly approved Musk’s package for a second time, even as proxy voting firms and large shareholders said they’d vote against it.
• What does it mean? Tesla is unique for the sheer number of retail investors it has. The company counts over 44% of its shares as belonging to individual shareholders, who bet big on Musk with the vote. All-in-all, 72% of voted shares went in favor of Musk, which also approved an effort which would relocate Tesla from Delaware to Texas. Still, the controversial pay package will likely face more scrutiny — with a fresh batch of lawsuits lined up.

Why does it matter for EarlyBird families?

We’ve written about a number of high-profile proxy battles this year, including a battle for board seats at Disney. In each battle we’ve seen this year, there’s one commonality: everyday people. Disney won its board battle with the blessing of retail investors — and Musk’s $56 billion compensation crossed the finish line thanks to retail investors, too.

This underscores the importance of shareholder votes… and it’s one reason why EarlyBird is one of a handful of firms invested in helping everyday Americans be represented on Wall Street, even when they own diversified investment products like exchange-traded funds. Soon, thanks to our partnership with iShares, you’ll be able to set your shares to be voted based on your values with Voting Choice. We’ll share more details in the coming weeks.

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Consolidating Paramount: Why the Streaming Giant Hasn’t Sold

If entertainment giant Paramount was trying to make a drama out of its year-long effort to sell itself, we have bad news: it’s looking more like a comedy. The CBS owner, which has been engaged in high-profile negotiations to merge with David Ellison’s Skydance Entertainment for months, walked away from the widely-anticipated offer. The reason? The company’s largest shareholder.

• Who owns Paramount? From the looks of it, it really isn’t the shareholders. Shari Redstone, the non-executive chairwoman of Paramount Global, was the heir to billions worth of Paramount stock. Through a parent company called National Amusements, Redstone owns more than 77% of the company. She’s led the charge to sell her father’s media company, but insists that it should stay together. In Ellison’s Skydance, she got her best recourse for doing that — but when the company made its best and final offer, Redstone turned it down.
• What happens now? Redstone’s refusal stunned the company’s executives, investors, and media pundits — particularly because of how greatly it favored her, but harmed general shareholders. With the Skydance deal dead, Redstone’s ideal outcome might no longer be tenable, as an increasingly feral shareholder base will urge her and the board to consider cash offers from other firms. And this time, denying offers which could enrich investors will likely end up in years of court battles.

Why does it matter for EarlyBird families?

Whether or not Paramount sells itself is probably not super consequential to your family or portfolio, but the company’s current conundrum is an excellent demonstration that capital is power. Even without being meaningfully engaged in the company’s day-to-day business for years, Redstone has made billions from its1.97% dividend. And with bidders lining up, Redstone will hold all the keys. You’ll probably never own 77% of an American media giant, but there’s plenty to learn from that: owning productive assets like bonds and stocks could help enrich you (and your family.)

What else is up?

• Inflation appears to slow in May: After two back-to-back disappointing inflation reports, Americans are celebrating. In May, the consumer price index (CPI) was unchanged — up 3.3% year-over-year. Could inflation pressures finally be subsiding? Read more about what changed in CNBC.
• Working hard or hardly working? Your employer is watching: Wells Fargo fired dozens of employees for “simulating keyboard activity.” A/k/a, not really working. It’s the latest example of how companies are monitoring remote workers — and responding when they don’t do the latter. Find out more about Wells Fargo’s recent move.
• Did you pay your taxes? Most Americans have taxes withheld from their paycheck by their employers, but with a rising number of Americans engaged in side-hustles, contracting, and self-employment, the Internal Revenue Service (IRS) is charging record fees for late estimated-tax payments. Find out more in The Wall Street Journal.