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.
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.
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.
A news summary focused on 10 big employers; updated 4:34 p.m.
PAPA JOHN’S stock traded at a new 52-week high, $78.49, today before easing back to close at $78.26, up 49 cents. The stock’s all-time trading high was $79.40, on July 13, 2015 (Google Finance). Papa John’s founder and CEO John Schnatter is the pizza chain’s single-biggest stockholder, with about 10.5 million shares, including options — a stake worth $822 million at today’s closing price.
UPS plans to hire about 2,500 seasonal workers in Louisville to handle extra business during the holiday shipping period that begins in November and extends through January. The full- and part-time seasonal positions — primarily package handlers, drivers and driver-helpers — are among 95,000 seasonal workers overall the shipper plans to take on. Seasonal jobs have long been an entry for permanent ones at the company; from the 2012 through 2014 holiday seasons, more than 37% of those hired for seasonal package handler jobs were later hired in a permanent position when the holidays were over, the company says. UPS is the single-biggest private employer in Louisville, with about 22,000 workers at its hub at Louisville International Airport. Around the world, the company has 440,000 employees (press release and Courier-Journal). More about UPS.
FORD will move all the company’s small-car production to lower-cost Mexico over the next two to three years, CEO Mark Fields told an investor conference yesterday. The automaker produces its Fiesta subcompact in Mexico, but its Focus and C-Max small cars are made in suburban Detroit. The company is building a $1.6-billion assembly plant in Mexico’s San Luis Potosi, and plans to make small cars there starting in 2018 (Los Angeles Times). In Louisville, Ford employs nearly 10,000 workers at truck and auto assembly factories.
In other news, 21c Museum Hotel has sold a minority interest to a real estate investment unit of J.P. Morgan Private Bank. Under the deal, Junius Real Estate Partners will invest up to $250 million in the Louisville-based boutique chain toward building or acquiring new hotel properties.
Their first joint venture will be a 21c Museum Hotel Nashville in the historic downtown Gray & Dudley Building; it’s expected to open in the first half of next year with 124 hotel rooms, more than 10,500 square feet of museum and event space and five rooftop-level rooms, including two suites, with private terraces. 21c will manage the property and have joint ownership.
A news summary focused on 10 big employers; updated 3:23 p.m.
KFC is looking for more bang for its bucks in a just-launched review of its U.S. spending for advertising and marketing across all channels, including print, broadcast, digital and social media. The review, which in theory could end with the chicken-chain keeping its current agency for the work — ad and marketing giant WPP’s MEC unit — doesn’t include creative work now being done by Wieden & Kennedy since 2015; that agency is responsible for the current campaign of rotating actors and comedians portraying a resurrected Colonel Harland Sanders. KFC’s U.S. division said it’s looking for an agency “capable of deploying innovative media strategies while leveraging cost efficiencies and maximizing return on investment” (AdAge). KFC just launched its latest Sanders TV commercials, featuring a fictional Kentucky Buckets pro football team.
PAPA JOHN’S has given up concession rights at Rupp Arena in Lexington starting this fall, and will be replaced by Hunt Brothers Pizza (Herald-Leader).
BROWN-FORMAN‘s Jack Daniel’s has unveiled a new version to celebrate its major birthday this year: Jack Daniel’s 150th Anniversary Whiskey, which is priced around $100 per one-liter bottle (The Whiskey Wash). Jack Daniel’s is the top seller among Brown-Forman’s 19 brands of spirits and wine.
UPS: Utah is giving UPS $5 million in tax incentives for the shipper’s plan to build a $200 million regional package operations center at a yet-to-be-determined site in the state that will create nearly 200 jobs (Salt Lake Tribune). UPS is the single-biggest private employer in Louisville, with 22,000 workers at it Louisville International Airport hub.
TEXAS ROADHOUSE is opening a Bubba’s 33 in east of Dallas in Mesquite as the Louisville-based steakhouse chain expands its new sports bar division. First launched in Fayetteville, N.C., in 2013, there are now a dozen Bubba’s locations, including outlets in Houston and Waco (Culture Map Dallas).
In other news: the University of Louisville board of trustees, escalating its battle with the independent UofL Foundation, today approved a threat to sue the foundation unless it accedes to demands to clean up its act. Board of Trustees Chairman Larry Benz said as many as 70 donors have called the university over the past few days to say they won’t give any more money unless the foundation shows that it is “clean” (Courier-Journal). Those donors’ threats followed similar ones last week by the James Graham Brown Foundation and the C.E. & S. Foundation led by Humana co-founder David A. Jones Sr.