Brown-Forman and other publicly traded companies file an annual report with the Securities and Exchange Commission that includes reams of facts, figures and other information. An essential section describes the business itself. This morning, the company filed its latest report; here’s the passage, slightly edited:
“Brown-Forman Corp. was incorporated under the laws of the State of Delaware in 1933, successor to a business founded in 1870 as a partnership and later incorporated under the laws of the Commonwealth of Kentucky in 1901. We primarily manufacture, bottle, import, export, market, and sell a wide variety of alcoholic beverages under recognized brands. We employ over 4,600 people on six continents, including about 1,300 people in Louisville, home of our world headquarters. We are the largest American-owned spirits and wine company with global reach. We are a ‘controlled company’ under New York Stock Exchange rules, and the Brown family owns a majority of our voting stock.”
The company also published a summary of its brands:
“Beginning in 1870 with Old Forester Bourbon Whisky — our founding brand — and spanning the generations since, we have built a portfolio of more than 40 spirit, wine, and ready-to-drink cocktail brands that includes some of the best-known and most-loved trademarks in our industry. The most important brand in our portfolio is Jack Daniel’s Tennessee Whiskey, which is the fourth-largest spirits brand of any kind and the largest American whiskey brand in the world, according to Impact Databank’s ‘Top 100 Premium Spirits Brands Worldwide’ list.”
Related:Fresh details emerge about the Brown family’s multibillion-dollar stake in the company now led by Chairman George Garvin Brown IV.
GE sold Appliance Park to Haier Group for five times what it claimed the complex was worth in 2013, when it won a dispute with Jefferson County over the southend property’s value, a dispute that ultimately reduced the taxes the conglomerate paid. At the time, GE said the complex was worth $23 million, nearly half the $42 million value assigned by Property Valuation Administrator Tony Landauer’s office (WDRB).
HUMANA beefed up security yesterday after reports of what some employees said was a threatening graffiti message written on a bathroom wall at the insurer’s Waterside building downtown, one the company seriously enough to allow employees to go home early. The FBI is investigating the incident, said WAVE. The threat may be related to annual gay pride events planned downtown this weekend. Several employees told WLKY the graffiti referenced last weekend’s mass shooting at an Orlando gay bar, where a suspected terrorist possibly inspired by ISIS killed 50 people and injured another 50 (WAVE, WLKY and Courier-Journal).
Yesterday’s incident came after authorities arrested a Jeffersonville man arrested in California who was heavily armed and headed to a gay pride event, plus reports of possible copycat threats at a New York gay bar and in the U.K. June is gay pride month in many cities, with parades and other public festivities (Courier-Journal, Time and BBC).
BROWN-FORMAN filed its annual 10-K report with the Securities and Exchange Commission this morning; as always, a key section describes the business itself. The filing came a day after the whiskey giant disclosed how much it paid CEO Paul Varga and other top executives, plus fresh details about the value of the controlling Brown family’s $6 billion in stock holdings (SEC document).
It costs $19.99.
PIZZA HUT‘S bacon-stuffed pizza has arrived in the U.K., but only for in-the-know customers. “To savour one of the new pimped-up crusts, all you need to do is whisper the secret words ‘Bacon Crust Have’ when ordering any large pizza (Mirror). Also, the chain has brought back its Triple Treat Box in a special summer edition, “a tri-level wonder decorated to look just like your favorite picnic basket” (Delish). It includes two medium one-topping pizzas, bread sticks and the just-introduced Ultimate Hershey’s Chocolate Chip Cookie (Brand Eating).
PAPA JOHN’S: In San Diego, no injuries were reported after an SUV crashed into a Papa John’s Pizza restaurant yesterday afternoon (KGTV).
TEXAS ROADHOUSE is looking for Baltimore area cooks “who are ready for a fun and rewarding career in the restaurant business.” Applicants are considered without regard to race, religion, color, age, gender, disability, veteran status, sexual orientation, citizenship, national origin, or any other legally protected status (Craigslist). Apparently, gender expression hasn’t made that list — yet.
Adopt me, please!
UPS: In northern California, a UPS driver who happened to be on the scene rescued a crazy-cute puppy dumped Tuesday evening in the street by a passing vehicle. The Modesto Bee identified the driver as 39-year-old Jason Harcrow of Hughson. Police said the puppy, believed to be a Cairn terrier less than a year old, was in great spirits and would be put up for adoption at the county shelter (KPIX). The driver who abandoned the pup is expected to spend eternity in hell with tobacco lobbyists.
In other news, U.S. stocks closed slightly higher, with the Dow Jones Industrial Average and other indices up less than 1% (Google Finance). Among Boulevard’s 10 big Louisville employers, Papa John’s performed best, closing at $65.89, up 2%. And on the A-list front, there was no news of any consequence about Louisville native and Oscar winner Jennifer Lawrence.
The economy was bursting at the seams after World War II, and with wartime conservation over, businesses were churning out consumer goods like never before.
That included electric kitchen mixers, RCA Victor television sets — and every young Louisvillian’s must-have: an analogue sound storage medium in the form of a flat polyvinyl chloride disc with an inscribed, modulated spiral groove.
Yes, we’re talking about records! And the Variety Record Shop at 645 South Fourth St. downtown had them on sale one momentous day in April 1951. These were 78 rpm’s, according to an advertisement the store placed in The Courier-Journal that morning. Intriguingly, Variety was selling sets of 20 “hillbilly records” for $2.98 — no other information supplied.
Boulevard focuses on news about some of Louisville’s biggest employers, nonprofits, and cultural institutions. This is one in an occasional series about them.
Louisville’s economy was sizzling in 1951, when General Electric’s nearly 50-year-old home appliances business started construction on what would become one of the city’s single-biggest factory complexes. Louisville’s population had soared 15% in the previous decade, to 369,000, after World War II’s end shifted the U.S. economy back to peacetime prosperity.
Edison in 1922.
GE appliances traces its history to 1905. But through its corporate parent and original driving inventor, it really extends even further back, to 1866. That’s when 18-year-old Thomas Edison moved to Louisville to work for Western Union. He spent most of his spare time tinkering, eventually losing his job. Many career moves later, he’d amassed a stack of patents for electrical inventions. The financier J.P. Morgan and a partner cobbled them into a company that formed the basis of General Electric.
That was the goliath that in the late 1940s and ’50s raced to meet post-baby boom consumer demand for toasters, mixers and “white goods” with the latest features — like the two-in-one freezer-fridges advertised in the 1952 TV commercial, top of this page.
Appliance Park would eventually cover 1,000 acres in the county’s south end, with more than a dozen manufacturing, warehousing and power-generation buildings.
With Ford, International Harvester and other big manufacturers, GE launched a solid middle class with good wages and benefits that became the foundation of Louisville’s economy. At one time, the park employed 25,000 workers. It was a self-sufficient city providing many of its own needs, right down to mail handling.
Brown-Forman chief executive Paul Varga‘s fiscal 2016 pay was down from $11 million the year before and $12.3 million two years prior, the company disclosed in its annual shareholders proxy report.
Compensation for the other four highest-paid executives was mixed vs. the year before, according to the report, which the Louisville whiskey distilling giant filed with the Securities and Exchange Commission late this afternoon.
The figures appear on Page 40, and cover the year ended April 30. In addition to Varga, they include CFO Jane Morreau; Mark McCallum, president of the marquee Jack Daniel’s brand; Jill Jones, executive vice president over North America and Latin America regions, and General Counsel Matthew Hamel.
Brown
Chairman George Garvin Brown IV got paid non-equity incentive compensation of $531,787 plus a small salary of $38,750. (“Non-equity incentive compensation” sounds like a cash bonus, but for some reason, Brown-Forman doesn’t use that term.)
In fiscal 2015, Brown’s non-equity incentive pay was much less: $281,845, according to last year’s proxy report. But that year he was still working as an executive vice president in addition to his chairman’s duties. For his EVP work, he was paid $320,427. He left that job a year ago today.
The company also said it incurred $18,359 for certain expenses associated with Brown’s living abroad, and other employee benefits provided to him. The proxy report doesn’t say where Brown, 47, was living at the time. (London, it appears, based on this Globe and Mail story last year.)
The Browns are firmly in charge
The Brown family controls Brown-Forman through their enormous stock portfolio, preserved through multiple generations — at least four — that followed George Garvin Brown, a pharmaceuticals salesman who started the company in Louisville in 1870. At current market prices, the family’s holdings are worth at least $6 billion — but in reality, much more.
The holdings are divided between the company’s two classes of stock: “A” shares, which carry voting rights, and non-voting “B” shares. Both classes trade on public markets, although for different prices. The family owns at least 67% of the A shares, according to the proxy report.
Campbell Brown
Chairman Brown and his brother, Campbell Brown — who’s also a senior executive at the company — hold one of the family’s single-biggest stakes: 6.8 million class A shares, through an entity called the G. Garvin Brown III Family Group. At today’s closing price of $105.48, those shares are worth $718 million.
Campbell, 48, has been president and managing director of Old Forester, the company’s founding bourbon brand, since 2015.
Keeping business in the family
Another big stockholder is Laura Lee Brown, who with her husband Steve Wilson, founded the trendy 21c Museum Hotel chain in Louisville. She owns 2.2 million class A shares outright, worth $233 million at current prices.
Wilson and Brown.
In the proxy report, Brown-Forman said it did business with the couple, as it has in previous years. It includes developing historic Whiskey Row on Main Street into a complex of new lofts, retail and restaurant space to be called 111 Whiskey Row. The company paid $900,000 to a company controlled by the couple: Brown Wilson Development, according to the proxy report.
Brown-Forman also paid the couple $267,395 for rooms, meals and other entertainment at their 21c hotel and its Proof on Main restaurant. It also paid them another $250,440 for leases on parking spaces in a garage they own adjoining Brown-Forman’s downtown offices.
Unraveling founding family’s wealth
Valuing the Brown family’s total stock holdings is difficult. Individual members own shares outright. They also have partial, beneficial ownership through family partnerships and legal entities. Because they overlap with other family members, it’s hard to assign a value to them.
However, counting each share just once among family members owning more than 5% of all outstanding shares, their combined total is about 57 million, worth $6 billion. But that only covers shares held by the single-biggest owners who, under Securities and Exchange Commission rules, are required to disclose holdings exceeding 5%. There may be other Browns sitting on multimillion-dollar positions, undisclosed because they don’t meet the 5% threshold.
And that’s only counting the class A shares. The Browns own several million non-voting B shares, too. Determining exactly how many is tricky, but tables and footnotes in the proxy report offer clues.
For example, Garvin Brown IV and his brother Campbell together own 1.3 million Class B shares outright; at today’s closing price of $97.90, they’re worth another $125 million. Adding that to their A shares, the brothers own $843 million in stock.
Sandra Frazier
Sandra Frazier, who just cycled off the board of directors, owns 373,376 B shares plus 1.4 million A shares. They’re worth a total $185 million. Frazier, 44, is CEO of Tandem Public Relations in Louisville, which she founded in 2005. She’s also a member of the board of directors at Glenview Trust Co., a boutique wealth management company that serves 500 of the richest families in the area.
Laura Frazier
Her first cousin, Laura Frazier, joined the Brown-Forman board when Sandra left. Laura owns 239,829 B shares and 225,433 A shares. Combined, they’re worth $47.3 million. In addition to being a director, Laura, 58, owns Bittners, the high end furniture and decorating company in NuLu.
The company announced the planned closing today, saying demand for the side-by-side refrigerators made there has fallen 76% since 2008, according to the Associated Press. China’s Haier completed its $5.6 billion purchase of GE Appliances last week. The deal included 61-year-old Appliance Park, where 6,000 people work.
News about business and culture in Louisville, Ky.
“Beginning in 1870 with Old Forester Bourbon Whisky — our founding brand — and spanning the generations since, we have built a portfolio of more than 40 spirit, wine, and ready-to-drink cocktail brands that includes some of the best-known and most-loved trademarks in our industry. The most important brand in our portfolio is Jack Daniel’s Tennessee Whiskey, which is the fourth-largest spirits brand of any kind and the largest American whiskey brand in the world, according to Impact Databank’s ‘Top 100 Premium Spirits Brands Worldwide’ list.”
That sounds cheap, until you adjust it for inflation: $2.98 in 2016 dollars would be $27.42, according to 
The company announced the planned closing today, saying demand for the side-by-side refrigerators made there has fallen 76% since 2008, 
Boulevard 