The Closing Bell: Humana parachutes growing more golden, FoodPort seeking new ideas, NuLu biz updates, stock roundup, and more
Welcome to The Closing Bell. This is your last stop for biz scoops and big news before the weekend — a roundup of stories that can’t wait till Monday.
Golden parachutes for Humana execs just got a little bit more golden
Humana released a new joint preliminary proxy filing with would-be acquirer Aetna. And nestled among its hundreds of pages was some new information about the kind of golden parachutes Humana’s execs can expect if the firm is acquired by Aetna and their services are no longer required, known in industry parlance as a “change in control” agreement.
This newest set of golden parachute data comes just five months after Humana’s prior annual proxy statement, which came out last March. In that document, Humana tabulated the total severance payouts that would go to its top six executives should there be a change in control. These execs were: CEO Bruce Broussard, CFO Brian Kane, senior VP Steven McCulley, COO James Murray, chief human resources officer Timothy Huval, and chief strategy officer Christopher Hunter. At that time, their total reported golden parachute compensation came to $66 million.
But this figure is no longer current. The newly released change in control figures up the ante for these execs to a total of $86.8 million, and this may be a conservative number. The biggest bump went to CEO Broussard, who saw his reported golden parachute total go from $16.9 million to $31.3 million — thanks to early vesting — though the site Seeking Alpha said his total is more like $45.6 million. The other big step-up in pay went to CFO Kane, who saw his parachute rise from $5.9 million to $12.9 million.
Meanwhile, COO Murray actually saw his parachute number tumble, from $19.9 million to $15.2 million. IL has contacted Humana spokesman Tom Noland for additional information about why these numbers changed from one proxy to another but did not immediately hear back.
Humana’s execs are able to earn this compensation whether they are terminated without cause or resign for what the firm calls good reasons. These good reasons can include: an adverse change in title or responsibilities; a reduction in base salary; or the relocation of their office to more than 30 miles from where they had worked prior to the change in control. —David Serchuk
Capture Higher Ed adds high-level staff to roll-out new recruitment software
Louisville’s Capture Higher Ed has added some high-level staff to help roll-out a new product aimed at enhancing student recruitment efforts. These new staffers are part of Capture’s ongoing fast-track growth, as it’s more than doubled its employee head count in the past year.
Capture helps its clients — colleges and universities — improve both the quality and quantity of students enrolled.
The catalyst for these newest hires is the recent launch of Capture’s Behavioral Engagement (CBE) software, a proprietary product that helps schools better target students, said Kristen Seger, a marketing coordinator at Capture.
The thrust of CBE is that it actively tracks how potential students use a school’s website. If the students are gravitating toward specific fields of study, like liberal arts or engineering, the software tracks this. It then uses this information to recruit the kind of students that would be the best fit for a given school. “This will change the way schools recruit,” Seger said, adding the goal is for schools to use this software to recruit the students most likely to graduate and avoid those most likely to drop out because they weren’t a good fit.
CBE — which went live in May — is being used by 15 of Capture’s client base of 50 colleges and universities; the plan is to get the other 35 using it over the next six months. Capture’s current client schools are able to use CBE free of charge, as part of their partnerships. The plan is to eventually market CBE as a separate product, or as an add-on for new clients.
As for the two high-level hires made in conjunction with CBE: Matt Cobb came on as vice president of product strategy, and Dr. Brad Weiner is a higher-education data scientist in charge of analyzing info generated by CBE.
According to Seger, the CBE and these new hires are being partly financed via $1.2 million in new funding, led by the Yearling Fund, which IL wrote about on Aug. 10.
Norton Commons lands painting studio
Sip wine, paint and be merry beginning this fall at Studio G.
Studio G is just the latest studio that combines the arts of painting and not spilling your wine. Similar to other concepts of its ilk, Studio G will have a large studio room where customers can enjoy painting among strangers and a small room for private parties.
Owner Pam Gatti said in an email that Studio G also will host “paint it forward” nights in coordination with nonprofits. Those nights, 20 percent of the proceeds will go to charity.
West Louisville FoodPort seeking ideas for 5.5 acre space
Now that the West Louisville FoodPort has axed controversial plans for an anaerobic digester that would have transformed organic waste into methane gas, the people behind the project are looking for something to take its place.
The digester would have occupied 5.5 acres of land at the 24-acre FoodPort, located at 30th Street between Muhammad Ali Boulevard and Main Street.
With the digester eighty-sixed, Seed Capital Kentucky, the nonprofit behind the FoodPort, is seeking suggestions from Louisville residents on what type of business should take up that space at the site.
“We are definitely open to ideas,” said Caroline Heine, project director for the FoodPort. It just needs to be food-related to keep with the project’s theme.
Heine mentioned the possibility of attracting something like a fish farm or vertical farming business. “We would love a company like that,” she told IL.
Work on the first phase of the FoodPort is expected to start in late spring. Thus far, Seed Capital has raised $3.5 million of the roughly $25 million it needs for the project and continues to fundraise. “We have a quite a bit of outstanding requests out there, so fingers crossed those come through,” she said.
The nonprofit also is in talks with six entities that received new market tax credits from the federal government this year; Seed Capital expects such tax credits to cover about $7 million of the necessary funding.
Before it can possibly secure the tax credits, though, it must sign tenant agreements with the businesses that have preliminarily agreed to open operations there. Seed Capital must also line up debt, Heine said.
Seed Capital decided to dissolve its partnership with Nature’s Methane, the Indiana-based company planning to build the digester, after public outcry from west Louisville residents.
“The voices were angry and hostile,” Heine said, adding that Seed Capital thought the digester was an “appropriate and progressive part of the plan” and was “surprised” by residents reactions.
Seed Capital created a council of west Louisville residents earlier this year to help communicate about the project and gather feedback.
Still, after a public meeting last week where an overwhelming majority expressed disapproval of the digester, Heine said Seed Capital was forced to drop it or risk losing the entire project.
“We felt like there was a real chance we could lose the forest for the trees,” she said. “We felt like that was too big a loss to incur.”
Earlier this year, Nature’s Methane submitted plans to the city for a second digester at 15th Street between Breckenridge and Maple. After Thursday’s news, the company has recommitted to continuing with plans for the second digester and said it would work with the city and residents to figure out how everyone can work together.
“Anaerobic digesters have successfully coexisted in both rural and urban communities for many years, providing great value,” Steve Estes, CEO of Star Distributed Energy, Nature Methane’s parent company, said in a news release. “As cities continue to grow, and increased demands are put on resources, more and more communities will be looking to anaerobic digesters as the solution.” —Caitlin Bowling
IL’s local stock focus
1. Yum Brands (ticker: YUM): I know we just wrote about Yum! in a recent stock focus, but the fast-food giant continues to be a company tied in with the see-sawing Chinese economy. As such, it presents an ongoing, interesting story. Basically, the markets are a bit rattled by talk from the Chinese government that it could devalue its currency, the yuan. If this were to happen, it would make Chinese goods cheaper to export, but also make it more expensive to buy things at home, such as fast-food. And this would, naturally, hit Yum pretty hard as China remains the major international fast-growth driver for the firm. This news caused the firm’s stock to take a pretty nasty dive on Wednesday, when it slid over 4 percent, though it had an equally strong Thursday.
But don’t cry too many tostada-flavored tears for longtime Yum shareholders. The stock has been a strong one, both over the short and long term. In the short term, meaning the past year, it’s up 20.6 percent, well past the general markets, up 7.4 percent. Over the longer term, i.e. five years, it’s up 107.5 percent, again better than the markets, up 93.8 percent. As such, it’s gotten pretty expensive, with a price-to-earnings ratio of 41.6. This prices Yum, even now, like a growth stock, and way more expensive than a competitor like McDonald’s, which has a P/E ratio of 23. So maybe the markets are just using this chance to take a rest between courses of Yum.
2. General Electric (ticker: GE): GE just announced it’s selling its GE Capital, Healthcare Financial Services unit for $8.4 billion to Capital One, as it continues to try to shed non-core assets to instead focus on the parts of it that actually make real money. (And an argument can be made that this same mentality is why it’s selling its GE Appliances division, or trying to — it just doesn’t make enough money.) This new sale also represents an ongoing effort by GE to shed what assets it has in GE Capital. GE Capital, incidentally, was the lending division within GE that nearly nuked the entire company during the great recession thanks to its portfolio of terrible deals.
As for GE’s stock, it remains a bit of a paradox. It pays a great dividend at 3.56 percent a year, but is also expensive when compared to the general markets, with a P/E ratio of 69.6. And its performance, both short and longer term, has been generally un-electrifying. —David Serchuk
Revolver closing; everything half off
Revolver, the home accessories and gift store in the heart of NuLu, is closing. On the 50 percent off signs, it reads: “We’re selling the building. While I’ve loved my 4 year experiment in retail, it’s time for Revolver to close the big red door for good.”
The sale of the building is expected to close soon. Owner and photographer Tom Gnadinger — who lives in Oldham County with his family — told us he’s not sure what’s next for him.
This would be a great time to stock up on hip and snazzy holiday presents. At half off, some of this stuff is a steal.
According to Zillow, the building is “pending” a sale for $850,000. It has four bathrooms and three bedrooms and is 4,824 square feet. It’s located at 707 E. Market St. —Melissa Chipman
In other NuLu news: When will The Taj open?
It’s been more than a year since IL first reported Todd Moore, owner of Construction Consultant Services, was rehabilitating 807 E. Market St. At that time, Moore said he planned to open a bar and lounge called The Taj, but there’s been no word since.
Back in July 2014, Moore said he hoped to open in the fall after already missing a self-imposed June 2014 deadline. Given IL’s offices are right across the street, we’ve watched workers come and go, with little to show for their efforts on the exterior of the building … until now.
Workers recently installed a hanging sign and a metal awning with a fleur-de-lis (wearing a fedora). But when IL called Moore last week to check in, he told us to call back next month. He did say he has brought on a couple of unnamed private investors to the project and added he is sworn to secrecy for the time being.
Meanwhile, NuLu business owners have taken notice of the look, particularly the addition of some decorative concrete work that’s topped off with a gargoyle. The consensus at the recent NuLu Business Association meeting was less than glowing. —Caitlin Bowling
Frazier Museum adds two senior positions
If you need further proof of the Frazier History Museum‘s ever-expanding presence, it was announced this week the downtown museum has added two new members to its senior administrative team. WHAS-TV news anchor Andy Treinen will take on the role of director of marketing, while veteran cultural arts professional Mindy Johnson will be the director of guest experience.
Treinen spent nine years as anchor and cohost of WHAS’s “Good Morning Kentuckiana.” His new duties will include communicating the museum’s content to targeted audiences as well as marketing the brand locally and nationally.
Johnson worked more than 10 years as director of ticketing for the Kentucky Center for the Arts, and more than 10 years as the Speed Art Museum’s director of visitor experience. She will oversee all aspects of the Frazier experience, including admissions, the museum store and volunteer programming.
“We are excited to bring two such talented and experienced professionals onto our team,” said Frazier president & CEO Penny Peavler in a press release. “Their knowledge and insights will be invaluable as we all work together to expand the Frazier’s role as the home to the heart of Kentucky, including our developing bourbon history presence.”
Last spring, it was announced that the Frazier will serve as the official starting point to the Kentucky Bourbon Trail, and they’re currently working on an expanded bourbon experience to go along with that partnership with the Kentucky Distillers’ Association. —Sara Havens