Following is the unofficial transcript of a CNBC exclusive interview with Tudor Investments Founder & JUST Capital Co-Founder Paul Tudor Jones and HPE CEO Antonio Neri on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Monday, February 3.
Paul Tudor Jones on America’s most ‘Just’ companies: It’s all about the American worker
ANDREW ROSS SORKIN: Joining us right now in an exclusive interview, legendary investor Paul Tudor Jones, co-founder and chairman of Just Capital. He created all of this. He's also the founder and chief investment officer of Tudor Investments, of course. Also, Antonio Neri, he's the CEO of Hewlett Packard Enterprise. He's ranked number one in the Just 100 for the second year in a row. And I've got about a million questions for all of you, including tariffs given the news of the moment right here, Paul. But I just want to -- I want to start with this list and I want to start with actually a very 30,000-foot question, which is it feels like the world has shifted even in the past couple of months, politically and otherwise, around so many of the issues, this whole idea of almost stakeholder capitalism, ESG, DEI, all of that seems to have been thrown out. Maybe the baby's been thrown out of the bathwater. I don't know. But I'm so curious given that your work is based on polling based on what the American public actually wants. And you also just had an election and how you think about all of this?
PAUL TUDOR JONES: Well, first, let me just say, it's ironic that we're here on the day to celebrate the best of American business on the same day that we're also tarrifing the hell out of them. But it is what it is. And what I would say is that the election result that we saw and President Trump taking office again, I think, is completely congruent with the polling that we saw this year for what constitutes just behavior. The number one issue, and it is year after year after year, is pays a fair and living wage. It's all about the American worker. And President Trump was elected to office because this country felt like the middle America, those that were -- those that sit there and work for all these companies weren't getting a fair shake. So, I think this is exactly synchronous with what we see in our polling. And it's so funny when you mention DEI, ESG, all those terms, I can tell you at a macro level, just the polling that we do is about USA. And I know it sounds corny, but it's a fact. It's about what the American public thinks is the best behavior for corporations to do on behalf of all Americans and all stakeholders. And that's workers and communities and customers and shareholders and the planet. So, I think, if anything, if you're a MAGA person, then you've got a 100 percent respect what our polling shows, because all we're doing is asking the American public what they think, it's as MAGA as there is anything.
SORKIN: Before we get to Antonio, let me just ask you this about performance. Because one of the questions is, how correlated the outcome of the Just 100 list is to performance, and maybe importantly, outperformance? How has it changed over the years?
JONES: Yes. So, since our inception about seven years ago, the Just 500 is outperformed the Russell by about 10 percent. The Just 100 has outperformed the Russell by about 40 percent. The Just 100 is outperformed the S&P by just a little bit. But the point is aligning yourselves with what the American public thinks is great for business is also great for your shareholders and your share prices and your business in general. And there's nobody that embodies that better than that gentleman, Antonio Neri, who -- he really is the classic American dream story. He started as an intern at Hewlett Packard Enterprises and worked his way to CEO. There's no better Horatio Alger story than him. And trust me, we would all want our kids to work at HPE given the things that he's done.
SORKIN: Well, that's what I was going to ask. Thank you for that, Paul. Antonio, it's nice to see you this morning. You've now been at the top of this list two years in a row. And I'm curious what you think you're doing differently than other companies and, frankly, how much you think about the various metrics with which you have succeeded on this list. And, by the way, I should say your stock did outperform in a very big way this past year. On a longer term basis, it's a little bit more of a complicated story. But when you look at these metrics with which you've come atop this list, how much are you focused on those things individually, or are you focused on something else and it just so happens that you've come out on top on the other metrics as well?
ANTONIO NERI: Yes. Well, good morning, Andrew. And good morning, Paul. Nice to see you again. And thank you for the amazing honor of recognition for the second year in a row. It's an honor that we take very seriously. And our 60,000 employees are cheering today for again this amazing award that we take very, very seriously. To your point, Andrew, you know, when I became CEO, believe it or not, seven years ago, two days ago, you know, one of the key priorities I had was culture. Culture is everything in my mind, in addition to focus to our customers and our innovation and now the culture of the center are our employees. So, how we create an environment where everybody can come to work and thrive to create business value that ultimately is good for shareholders and for the communities we operate. And there we put a lot of emphasis on about our values, our benefits and our ability to attract and retain and develop the talent and pay equally. And so I'm very proud of the work we as an organization have done for the past seven years. And we see that in our results. It's not just the voice of the workforce survey that we do every year where this company now perform consistently in the mid-80s with the lowest attrition rate they ever had, including the top attrition rate, but it's very low single digits. But it's the ability to really attract that talent that continues to fuel that innovation, to solve some of these biggest societal challenges we all face, you know, ensure that these technologies like A.I. are inclusive, the ultimate three (ph). You know, we design systems that consume less energy, and then think about this circular economy that we drive. But in the end, it's all about those employees that come to work every day.
SORKIN: Antonio, but I think there's a lot of CEOs who are trying to understand. It's really almost like a mental framework question, which is, are you focused on profits and driving growth and all of those kinds of things, and it just so happens the way you run your company and the culture you've created has created these opportunities and benefits across the way? Or are you focused in a very specific way on the culture and these issues and how much focus in mind share are you focused on those things versus what some people might think of as sort of the old classic way of running a business just trying to grow, grow, grow? I ask because I think it's a mental model that people are trying to understand.
NERI: Yes. And the two are -- it's the latter, obviously. And the two are correlated, right? So, you can't perform unless you have the best talent. And you can't deliver value to shareholders unless you have the best human capital strategy. And at the core of that strategy, again, are employees. And so you have to work together. You can't take it as an afterthought. Ultimately, our journey in the last seven years to reinvent the company is to focus on the areas where we can play and win. And the capabilities that we need are both on the innovation side and the human capital side. And in order to focus on the human capital side, you've got to create a culture that people can see in themselves to come to work every day. So, I don't see, Andrew, the two separated. I see one in the same. That's why we know, we focus on those. I think we talked about it before. And, you know, everybody goes through a journey in their life both on the personal and professional side. So, one of the basic things we have done in addition to focus on pay and pay equity is, for example, you know offering 26 weeks pay leave, when you have a family event, like having a child. And those things resonate. But, ultimately, we can measure the result in our performance. You know, when you think about carbon footprint, we now have requirements from customers that they ask us, what are you doing to reduce the carbon footprint in your systems? Or what are you doing to reduce the human slavery? And so these are the things that we focus across our business, and we know it's good for business.
SORKIN: Hey, Paul, while we're here, and I know we started by just mentioning tariffs, we have a market selloff that's literally happening as we're speaking. And I'd be remiss to not get your perspective on what you think is happening and what you think will happen as you try to measure and game out this scenario.
JONES: Yes, I'm happy to answer that. I would like just to say one last thing with regard to what HPE does. HPE ranks, I want to say, ahead of 97 percent of the Russell 1,000 on paying a fair and living wage, our number one metric. 40 percent of our metrics are around worker compensation, worker treatment, wellness, et cetera. 50 percent of the top 1,000 companies in America don't pay a living wage to their customers. If there was one thing that we take away from our polling year after year after year, there's nothing more important than that economic issue. And, of course, I think that's why. President Trump was reelected because you have to solve that, you have to solve higher incomes for Middle America and for working people, men and women. You're going to have to solve that. And so that's hopefully what our rankings do, is that we highlight to companies where they are in their sectors, where they are against the rest of the world, certainly, the top 1,000 companies, where they are, and how need to improve on taking care of their workers. That's the bottom line of all this. And that's, I think, the bottom line of the last political election, too. And I want to just add one other comment on our polling, which I found fascinating, which was we had two metrics that moved up substantially in our polling. And they were very related. Ethics, ethical leadership, moved up five spots to number two, the second most important determinant by the American public and then honest and transparent communication moved up seven slots to number four. So, the number and two, four most important things is judged by the American public are ethical leadership, honest communication. And I think that's extraordinarily telling for our political leadership today and that Americans just want to be told the truth. They've seen, I think, from both parties. They've seen so many things that they know with their own eyes aren't true and they're exhausted by it. So, I think that's the most -- every year, we see something new in the polling room in COVID, security, safety, company safety and security was the -- jumped way through the roof because everyone was so afraid to go to work. So, it's funny how the polling changes year-by-year, depending upon what the environment is. And there's a big lesson that there's a huge thirst for honesty and ethics in business today.
Paul Tudor Jones on Trump’s tariff war: It’s going to take a maestro to pull this off
SORKIN: Fair enough. Paul, given that I know so many people are waking up this morning and they're turning on their T.V. and they're thinking about tariffs and trying to understand what's happening. As I said, there's a market selloff literally happening as we're speaking. And so I just -- I want to get there with you just to understand what's going on even inside your own firm as you're thinking about it this morning.
JONES: Well, there's so many moving parts, and there's so many things that are cross currents. The one thing that I would say is this is a completely, totally different landscape than Trump 1.0. So, if I go back to January of 2017 and I look at where we were in the three big asset classes and where we are today, wow, it's a much, much shakier ground that we're treading on. For instance, let's take fixed income. In 2017, we were asking the investing public to pick up $1.2 trillion worth of duration. That was how much we were issuing at the treasury. This year, that number is $2.7 trillion of duration. So, that's just -- it's an all-time record. So, it's a completely different landscape in terms of the bond market. If I go to the foreign exchange market, in 2017, there was $8 trillion that foreigners had invested in the United States, more net a trillion dollars that they own more of us than we owned of them. That was 40 percent of GDP. Fast forward to today, that number's $23 trillion. Foreigners own $23 trillion more of us equities and debt and real estate today versus eight in 2017. That's 80 percent of GDP, twice what it was. And, again, it's a good problem because it shows that American exceptionalism has drawn that capital in. But we have to be careful. And then, finally, if I look at the stock market, January of 2017, kind of average P.E.s were around 19, today they're 25. We're a full 30 percent higher than we were in 2019. We could have a 30 percent correction in the stock market and just be back to slightly overvalued. So, Trump 2.0, I think Trump being Trump, I don't know if it will play as well as it did in 1.0, because there's no room for mistakes. And, look, he's my president now. I pray he makes all the right decisions because we are precariously perched from a macro standpoint. I don't think we've ever had as many things that are connected and circular and could go wrong. So, it's going to take a maestro to pull this off in a way that kind of preserves where we are now in the major economic asset -- excuse me, the major asset classes.
SORKIN: It is a longer conversation. We hope to continue it with you, Paul and Antonio. Antonio, congratulations. And Just 100 list out today, you can check it out online. And we appreciate both of you being with us.
JONES: Thank you so much. Congratulations, Antonio.
NERI: Thank you, Paul. Much appreciated.
