Shares in the major Louisville-area employer traded for $825.24 before easing back to a more recent $825.09, up $9, or 1.1%. Today’s were the second consecutive day of gains following a Wall Street Journal report yesterday that Amazon planned a full-on assault against UPS by establishing itself as a standalone shipper. The retailer has 6,000 employees at distribution centers in Jeffersonville and Shepherdsville.
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Tackling the delivery business, Amazon executives publicly say, is a logical way to add delivery capacity — particularly during the peak Christmas season, according to a new Wall Street Journal this afternoon.
“But interviews with nearly two dozen current and former Amazon managers and business partners indicate the retailer has grander ambitions than it has publicly acknowledged,” the newspaper says.
Amazon’s goal, these people say, is to one day haul and deliver packages for itself as well as other retailers and consumers — potentially upending the traditional relationship between seller and sender.
The shipper’s grander ambitions has enormous implications for Louisville, where UPS is the city’s single-biggest employer, with 22,000 workers. Amazon itself also is a major area employer, with 6,000 workers at distribution centers in Jeffersonville and Shepherdsville.
Wall Street rallied around both companies after the WSJ story was posted. Amazon closed at $816.11, up $16.95 a share, or 2%. UPS closed at $110.01, up $1.17, or 1%.
A news summary focused on 10 big employers; updated 12:57 p.m.
PIZZA HUT‘s introduction of its newest stuffed crust pizza — a grilled cheese version — recalls the fact that the original was launched 21 years ago by a kinder and gentler version of Donald Trump, according to AdWeek.
The new pizza debuted March 26, 1995. Six days later, Pizza Hut kicked off a $45 million national ad campaign, buying TV time during the NCAA’s Final Four weekend. The 30-second spot created by BBDO New York showed a tuxedo-clad Trump in a gilded suite along with Ivana Trump, whom he’d divorced five years earlier. (Watch the ad below.) In the commercial, the two poke fun of their headline-grabbing split.
“He was an egomaniac billionaire and almost charming,” said Hayes Roth, principal of brand and marketing firm HA Roth Consulting. “His egomania was so huge that he makes fun of himself. He’s lost that sense of humor. But he put on a great show, and back then we bought it” (AdWeek).
AMAZON‘s stock traded at a new record high today, $805.77, up $16.09, or 2%. The retail giant employs 6,000 workers at distribution centers in Jeffersonville and Shephardsville. More Amazon news.
A news summary focused on 10 big employers; updated 8:24 a.m.
YUM‘s 7,200-restaurant China Division said today it would issue 10 million common shares to Yum Brands shareholders as part of its planned spinoff next month. The offering could result in Yum China receiving proceeds of up to $54.05 million, implying a maximum offering price per share of $5.405, according to a regulatory filing. (bit.ly/2ctqkQy) The China division, which operates in more than 1,100 cities, is higher risk and potentially more rewarding, while Yum without the China division is likely to be more stable with greater cash flow (Reuters and SEC document).
PIZZA HUT has hired a Walmart technology executive to help develop digital ordering initiatives as its chief customer officer, a new position. The executive, Helen Vaid, will lead the international e-commerce, technology and operations business for the 16,000-location pizza chain. Vaid was Walmart’s vice president of digital store operations and experience. Before that, she was a general manager at Snapfish, a web-based photo-sharing and photo-printing company (press release).
KINDRED has paid a $3.1 million penalty to the federal government after failing to comply with a corporate integrity agreement it signed with regulators. The penalty came after the hospital and nursing home giant failed to correct improper billing practices in the fourth year of the five-year agreement. This penalty is the largest issued for corporate integrity violations to date, the Department of Health and Human Services Office of Inspector General said yesterday. The violations were discovered after several unannounced site visits were completed by the inspector general’s office. Under the agreement, Kindred had agreed to a number of corrective actions, including outside scrutiny of billing practices. In exchange for the agreement, the agency agreed not to exclude Kindred from participating in Medicare, Medicaid or other federal healthcare programs (Home Health Care News).
TACO BELL competitor Chipotle is launching a new marketing campaign today in a bid to convince people they can trust what’s in their burritos, nearly a year after two E. coli outbreaks sickened dozens of its customers in several states. In the campaign, the fast-Mexican chain says its now tracing ingredients back to the farm, blasting pathogens off chorizo with high-powered water jets, and requiring restaurant managers to receive food-safety certification (Wall Street Journal).
A news summary focused on 10 big employers; updated 8:10 a.m.
UPS: New York Attorney General Eric Schneiderman is seeking $872 million in penalties from UPS for allegedly shipping 683,000 cartons of untaxed cigarettes to residences and unauthorized sellers — charges the shipper denied at the start of a trial yesterday. The cheaper cigarettes attracted young people who are disproportionately lured to smoking by lower costs, lawyers for Schneiderman say. UPS’s lawyer, Carrie Cohen, said the company was in full compliance with the law and that the dispute was triggered by the city and state mistaking cartons of legally shipped “little cigars” for cigarettes (Bloomberg).
The shipping giant, which is Louisville’s single-biggest private employer, said the pay increases to their base salaries were meant to “improve the competitiveness of UPS executive compensation,” according to a filing Friday with the Securities and Exchange Commission.
In addition to the 10% raises to their base pay, the executives also received thousands of stock options. The pay increases are effective Oct. 1. The executives and their base salaries last year:
- Chairman and CEO David Abney, $1 million.
- CFO Richard Peretz, $382,431.
- Alan Gershenhorn, chief commercial officer, $550,125.
- Myron Gray, president of U.S. operations, $484,251.
Abney got 37,617 options. Peretz, Gershenhorn, and Gray each receive 7,807. All the options have an exercise price of $106.86, Friday’s closing price. They vest at a rate of 20% annually starting Sept. 16, 2017.
Also, Jim Barber, president of international operations, got 7,807 options, too, but no increase in his base pay, according to the SEC filing.
UPS employs 22,000 workers at its Louisville International Airport hub; more about the shipper’s local operations.
Related: See total top executive compensation last year for major Louisville-area employers in our exclusive database.
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