BALTIMORE — When Target announced that it was opening a store in Mondawmin, a predominantly Black neighborhood in this city struggling with crime and poverty, it seemed like a ticket to a turnaround.
And from the start, it was a practical success and a point of community pride. The store, which opened in 2008, carried groceries, operated a pharmacy and had a Starbucks cafe, the only one in this part of Baltimore’s west side.
People came from across the city to shop there, helping to soften the Mondawmin area’s reputation for crime and the looting that followed protests over the 2015 death of Freddie Gray, who was fatally injured while in city police custody. As an employer, Target seemed to cater to the community’s needs, making a point of hiring Black men and providing an office in the store for a social worker to support the staff. Elijah Cummings, the congressman from Baltimore, was known to shop there.
But in February 2018, with almost no warning or explanation, Target closed the store.
Residents, especially those without cars, lost a convenient place to shop for quality goods. And a marker of the community’s self-worth was suddenly taken away.
shut two stores in predominantly Black neighborhoods on Chicago’s South Side as the company made plans to build a new store on the wealthier and mostly white North Side.
according to local legend, visited the property in the 19th century and observed the area’s bountiful cornfields. Mondawmin is derived from a Native American phrase for “spirit of corn.”
In the 1950s, the property was sold to a real estate developer, who turned the rural lot into the city’s first shopping mall.
The Mondawmin Mall featured a Sears, a five-and-dime, and eventually an indoor fountain and spiral staircase, advertised as the “seventh wonder of Baltimore,’’ according to Salvatore Amadeo, an amateur historian who makes YouTube documentaries about malls, including a segment on Mondawmin.
When the assassination of the Rev. Dr. Martin Luther King Jr. in 1968 sparked protests across Baltimore and caused “white flight” to the suburbs, the mall struggled. Over time, it ceased to be a big draw for shoppers outside the area.
The stores became more focused on Black fashion and neighborhood services. A large barbershop occupies the mall’s bottom floor, and there is an agency that helps formerly incarcerated people find jobs.
a forceful statement, promising to reopen one of its stores in Minneapolis damaged in the protests against police violence.
Today’s Best Reader Comments
The closing of a Target store shows the limits of a pledge to help Black communities: “A business exists to make money. Period. If it doesn’t it will close, move, or change the business. This is the limits of capitalism.” sjs, Bridgeport, Conn.
She writes about the law. But could she really help free a prisoner?: “Justice has to keep growing for the masses of incarcerated innocents in the U.S. I will share in hopes that this article will be read and shared again and again.” Diane, Chicago.
Masks again? The Delta variant prompts a reconsideration of precautions.: “Wearing a mask indoors for sparing amounts of time (for the majority) is a minor inconvenience. While I, too, am annoyed by those who are choosing not to be vaccinated— my actions are based on those who are medically vulnerable and/or ineligible.” SB, Massachusetts.
“The murder of George Floyd has unleashed the pent-up pain of years, as have the killings of Ahmaud Arbery and Breonna Taylor,” Mr. Cornell said in the statement. “We say their names and hold a too-long list of others in our hearts. As a Target team, we’ve huddled, we’ve consoled, we’ve witnessed horrific scenes similar to what’s playing out now and wept that not enough is changing.”
One of the names on that “too-long list” is Freddie Gray. Mr. Gray was from Baltimore’s west side and was arrested a few blocks from the Mondawmin Mall in April 2015 for possessing a knife.
prosecutors described as a “rough ride,” his spinal cord was 80 percent severed.
One of the first big waves of protests over his death occurred at the Mondawmin Mall. Protesters began throwing rocks at police officers, and the mall was looted. Some students from Frederick Douglass High School, across from the mall and the alma mater of the civil rights giant Thurgood Marshall, the first Black man to serve on the U.S. Supreme Court, were caught up in the melee.
Target was spared serious damage. But for a time, many shoppers, both Black and white, stayed away from the store, recalled Mr. Johnson, who now works for the Postal Service.
“Mondawmin already had a bad rap with out-of-towners,” he said.
Shoppers eventually returned to the Target in Mondawmin, he said. But he noticed that the city’s other Target store, which had opened in a trendy area near the harbor in 2013, was getting more popular.
In November 2017, Mr. Mosby, then a state lawmaker, got a call from a resident whose family worked at the store: The Target in Mondawmin was shutting its doors in a few months. “I thought it was a just a rumor at first,” Mr. Mosby said.
Some residents and neighborhood leaders were told that the store struggled with high rates of theft, known in the retail industry as “shrinkage.” But Mr. Ali, the store’s former manager, said, “That was untrue,” at least while he worked there. The store met its profit and shrinkage goals during his four years as manager, which ended in 2012, years before the store closed.
Still, Mr. Ali, now the executive director of a youth mentoring group, acknowledged challenges that he said were unique to a store in a “hyper-urban area.”
A significant amount of inventory was once damaged in a fire in a storage area next to the store, and the company had to spend $30,000 a month for an armed Baltimore police officer to keep watch, he said.
There may have been additional considerations. “I think what happened after Freddie Gray spooked Target,” Mr. Ali said.
Other national chains reacted differently. TGI Fridays stuck with its plans to open a restaurant at the Mondawmin Mall, months after the protests. The restaurant remains one of the neighborhood’s only free-standing, sit-down chain restaurants.
Mr. Mosby and other officials tried to negotiate with Target to keep the store open, but the company said its mind was already made up.
“They weren’t interested in talking to us,” Mr. Mosby said. “They wouldn’t budge.”
A storefront still sitting empty
The temperature gauge outside Pastor Lance’s car registered 103 degrees as he drove through Greater Mondawmin and its surrounding neighborhoods. He was wearing a white shirt emblazoned with his church’s logo — a group of people, of all races and backgrounds, walking toward the sun, holding hands.
A Baltimore native, Pastor Lance used to work as a computer programmer at Verizon. He made “lots of money,” he said. “But I didn’t feel fulfilled.”
He became a pastor and took over a nonprofit company that develops park space and playgrounds and hosts a summer camp for schoolchildren with a garden surrounded by a meadow near the mall.
“But some days, I wonder if I made a mistake,” he said. “It’s great to have a park, but if you don’t have a good job, you aren’t going to be able to enjoy a park.”
He drove along a street with liquor stores and houses with boarded-up windows. A woman tried to flag him down for a ride. But the poverty he saw was not what made him most upset.
It was when Pastor Lance steered through an enclave of big houses and immaculate lawns, only a short distance away, that the anger rose in his voice.
“You are telling me that these people wouldn’t shop at Target for lawn furniture or school supplies,” he said. “I am not trying to gloss over the problems, but there is also wealth here.”
“If shrinkage was a problem, hire more security guards or use technology to stop people from stealing,” he added.
He circled back to the Mondawmin Mall, where families ducked into the air conditioning for a bubble tea or an Auntie Anne’s pretzel. He drove past the TGI Fridays and then past the Target, its windows still covered in plywood and the trees in the parking lot looking withered and pathetic.
Pastor Lance refused to accept that a Target could not succeed here.
“If you are really interested in equity and justice,” he said, “figure out how to make that store work.”
Private equity has a place at the table, and so do Oprah and Jay-Z. Food giants like Nestlé are scrambling to get a foot in the door. There are implications for the climate. There are even geopolitical rumblings.
The unlikely focus of this excitement is Oatly, producer of a milk substitute made from oats that can be poured on cereal or foamed for a cappuccino. Oatly, a Swedish company, will sell shares to the public for the first time this week in an offering that could value it at $10 billion and exemplify the changes in consumer preferences that are reshaping the food business.
It’s no longer enough for food to taste good and be healthy. More people want to make sure that their ketchup, cookies or mac and cheese are not helping to melt the polar ice caps. Food production is a leading contributor to climate change, especially when animals are involved. (Cows belch methane, a potent greenhouse gas.) Milk substitutes made from soybeans, cashews, almonds, hazelnuts, hemp, rice and oats have proliferated in response to soaring demand.
“We have a bold vision for a food system that’s better for people and the planet,” Oatly declared in its prospectus for the offering. The company’s shares are expected to start trading in New York on May 20.
Stephen A. Schwarzman, Blackstone’s chief executive, was a steadfast supporter of former President Donald J. Trump, who has maintained that climate change is a hoax.
Blackstone’s backing also helped lend Oatly credibility on Wall Street. And there was no sign that Blackstone’s involvement slowed Oatly sales, which doubled last year.
Oatly’s image benefited from a roster of celebrity investors, including Oprah Winfrey, Natalie Portman, Jay-Z’s Roc Nation company, and Howard Schultz, the former chief executive of Starbucks. All have some connection to the plant-based or healthy living movement.
Oatly declined to comment, citing regulations that restrict public statements ahead of an initial public offering.
Oat milk is part of a larger trend toward food that mimics animal products. So-called food tech companies like Beyond Meat have raised a little more than $18 billion in venture funding, according to PitchBook, which tracks the industry. Plant-based dairy, which in the United States includes brands like Ripple (made from peas) and Moalla (bananas), raised $640 million last year, more than double the amount raised a year earlier.
In the United States, milk substitutes like oat milk and rice milk make up a $2.5 billion industry that is expected to grow to $3.6 billion by 2025, according to Euromonitor. Globally, the $9.5 billion industry is expected to grow to $11 billion.
Once a niche market, alternate milk has become as American as baseball. A frozen version of Oatly that mimics soft-serve ice cream is being sold this season at Yankee Stadium, Wrigley Field in Chicago and Globe Life Field in Arlington, Texas, where the Rangers play.
China Resources, a state-owned conglomerate with vast holdings in cement, power generation, coal mining, beer, retailing and many other industries. The new financing helped Oatly to expand in Europe and begin exporting to the United States and China, where many people cannot tolerate cow’s milk. China Resources’ involvement undoubtedly helped open doors in the Chinese market. Asia, primarily China, accounted for 18 percent of sales in the first quarter of 2021, and is growing at a rate of 450 percent a year, according to Oatly.
In Europe, there is growing alarm about Chinese investment in strategic industries like autos, batteries and robotics. The European Commission has begun erecting regulatory barriers to companies with financial links to the Chinese government. But so far no one has expressed fear that China will dominate the world’s supply of oat milk.
Just in case, Oatly’s prospectus gives it the option of listing in Hong Kong if the foreign ownership becomes a problem in the United States.
The potential of the market for dairy alternatives is not lost on big food producers. Oatly acknowledged in its offering documents that it faces fierce competition, including from “multinational corporations with substantially greater resources and operations than us.”
That would include British consumer goods maker Unilever, which said last year that it aims to generate revenue of one billion euros, or $1.2 billion, by 2027 from plant-based substitutes for meat and dairy, for example Hellmann’s vegan mayonnaise or Ben & Jerry’s dairy-free ice cream. Unilever has not announced plans for a milk substitute.
dairy alternatives are a poor substitute for cow’s milk because they don’t have nearly as much protein.
Stefan Palzer, the chief technology officer at Nestlé, took issue with those who say a big company can’t move as fast as a bunch of Swedish foodies. A young team at Nestlé developed Wunda in nine months, including three months of market testing in Britain, Mr. Palzer said in an interview.
substitutes for almost any kind of animal product. The next frontier: fish. Nestlé has begun selling a tuna substitute called Vuna and is working on scallops.
“It’s a great opportunity to combine health with sustainability,” Mr. Palzer said of plant-based alternatives to milk and meat. “It’s also a great growth opportunity.”
Goldbelly’s growth surpassed its expectations. Sales more than quadrupled last year, and it nearly doubled the number of restaurants on its platform, to 850. That, according to Joe Ariel, its co-founder and C.E.O., was because the company allows restaurants like Di Fara pizzeria in Brooklyn and Parkway Bakery and Tavern in New Orleans to go national: “We’re basically opening up a 3,000-mile radius for restaurants.”
Can that good fortune continue? As in-person dining resumes across the U.S., Ariel concedes that Goldbelly’s phenomenal growth rate last year “is not going to happen forever.” But its newest backers believe that restaurants will keep making online sales part of their businesses. Goldbelly is also counting on maintaining its lead by spending more on marketing, offering livestreamed cooking classes and relying on the loyalty of chefs.
Ariel didn’t deny that the company has its eye on an I.P.O. “In the future, we do want to be a public company,” he told DealBook.
The crypto tax thicket
Cryptocurrency’s rise to prominence is reflected in the latest U.S. tax documents (due today, in case you forgot). This year, a virtual currency question tops Form 1040, the individual income tax return form, right after the personal identifying information. The I.R.S. wants to know: “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
Yes means no, sort of. If you only bought crypto with “real currency” then you aren’t required to answer “yes,” per the I.R.S. But this guidance is not binding, which means you can’t entirely rely on it. This relatively simple question, which is generating consternation among accountants, reflects the greater state of disarray when it comes to digital asset taxation.
“There’s very limited guidance on crypto,” Michael Meisler, a lawyer who leads EY’s crypto tax center, told DealBook. Basic tax principles apply to digital assets and many concepts translate from the physical to digital realm, but crypto is evolving fast. The approach taxpayers take depends on their tolerance for risk, Meisler said.
Cryptocurrency is property for tax purposes.That means that there is a tax liability for every sale or purchase using crypto, said Amy Kim, the chief policy officer of the Chamber of Digital Commerce, a trade group: “Imagine reporting the gain or loss on every cup of coffee you bought at Starbucks.”
Big Crypto wants the I.R.S. to flip its script. The tax authorities have engaged in an “enforcement-focused approach,” Kim said. “We believe this approach should be reversed — issue practical guidance, then enforce that guidance against those who do not comply.”
THE SPEED READ
Alex Rodriguez and the Jet.com cofounder Marc Lore agreed to buy the N.B.A.’s Minnesota Timberwolves and the W.N.B.A.’s Minnesota Lynx for $1.5 billion. (NYT)
George Soros’s investment fund was among those that scooped up stocks at a steep discount when they were offloaded by Archegos during its implosion. (Bloomberg)
The influential proxy adviser I.S.S. backed three of four candidates for Exxon Mobil’s board put forth by the climate-minded activist investor Engine No. 1. (Bloomberg)
Politics and policy
Rural areas are counting on President Biden’s infrastructure proposal, in particular its expansion of broadband access, to help attract more workers. (NYT)
Proponents of Biden’s planned revival of the International Entrepreneur Rule to grant start-up founders special visas say it will create thousands of new jobs. (Axios)
“The Deadly Toll of Amazon’s Trucking Boom” (The Information)
Goldman Sachs’s online consumer banking unit lost another top executive as its C.F.O., Sherry Ann Mohan, defected to JPMorgan Chase. (CNBC)
Best of the rest
Leslie Moonves, who was fired from CBS in 2018, will receive nothing from the $120 million the company set aside in a potential severance package. (NYT)
Some advice on how to prevent the re-emergence of workplace cliques as people return to the office. (FT)
The publicly traded New Jersey deli with a $100 million market cap that David Einhorn identified as a symptom of irrational markets has fired its C.E.O. (CNBC)
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Starbucks has joined a growing list of retailers, restaurants and theme parks that will now allow fully vaccinated customers to go mask free following new coronavirus safety guidance from the federal government.
The company said in a statement that “facial coverings will be optional for vaccinated customers” as of May 17, where allowed by local regulations.
[Answers to your questions about vaccines and masks at work]
On Thursday, the Centers for Disease Control and Prevention took many businesses by surprise when it said that people who are vaccinated could go maskless in most places, including indoors. (The policies do not apply to people traveling by bus, plane, train or other kinds of public transportation.) For businesses, the announcement was complicated by the fact that C.D.C. guidance does not override state and local rules. But in a matter of days, several major companies have moved to relax mask requirements. Businesses for the most part have not said they would require customers to show proof that they have been vaccinated.
Here’s the latest on companies that are changing their mask policies.
Costco, which has more than 500 U.S. stores, said it would allow fully vaccinated customers to go mask-free where state and local guidance allows. The retailer said it would “not require proof of vaccination” but would ask for its customers’ “responsible and respectful cooperation with this revised policy.”
Publix, which has 1,270 grocery stores in the Southeast, said “face coverings are optional for fully vaccinated individuals inside Publix stores” subject to local regulations.
Trader Joe’s, which operates 517 grocery stores across the country, said that customers who are fully vaccinated no longer need to wear masks in its stores. It will not require proof of vaccination “as we trust our customers to follow C.D.C. guidelines,” a spokeswoman, Kenya Friend-Daniel, said in an email. Masks are still required for store employees.
Walmart and Sam’s Club
Walmart said that vaccinated customers are allowed to go maskless starting May 18 in areas that don’t have stricter mandates. A spokesman for the company, which operates more than 4,000 Walmart and nearly 600 Sam’s Club stores in the United States, said it expects its customers to abide by the honor system. Employees can also go mask-free by answering “yes” to a vaccination question that is part of a daily health assessment.
Walt Disney World Resort in Florida said that it was no longer requiring visitors to wear masks in most outdoor areas as of this weekend, though masks are still required in indoor locations. Disneyland in California continues to require masks indoors and out because of state mandates. Disney’s chief executive, Bob Chapek, said on an earnings call Thursday that the company had begun to increase capacity and that the C.D.C.’s new guidance “is very big news for us, particularly if anybody’s been in Florida in the middle of summer with a mask on.” About 150 million people visited Disney’s parks in 2019.
Hershey Park in Pennsylvania said it would no longer require masks nor social distancing for fully vaccinated guests. The theme park, which drew 3.4 million visitors in 2019, said it would rely on its guests to “accurately follow the guidelines based on their vaccination status.”
Universal Orlando Resortsaid masks are no longer required when outdoors but still must be used in “all indoor locations.” Its theme park in California will still require masks both outside and inside because of the state rules.
And the industry is surging. Last year, Inland Empire, a region close to the Los-Angeles-Long Beach port where retailers and manufactures offload billions of dollars in goods, added 23 million square feet of new warehouse construction, an area the equivalent of nearly 500 football fields.
“Where we live, these warehouses are popping up like Starbucks,” said Ivette Torres of the People’s Collective for Environmental Justice, a local nonprofit organization that has campaigned for warehouses to address their role in air pollution.
Operators of warehouses larger than 100,000 square feet (roughly two football fields) are required to earn points to make up for emissions from the trucks that come and go from the warehouses. Operators can earn these points by acquiring or using zero-emissions trucks or yard vehicles, or investing in other methods for reducing greenhouse gas emissions, for example, installing solar panels at the warehouses or having air filters installed in local homes, schools and hospitals. Or they could choose to pay a fee if not in compliance.
Many warehouses are far larger. One planned site involves 40 million square feet of industrial buildings, an area about the size of Central Park in New York.
Known as an “indirect source rule,” the effort is unusual because it largely targets emissions from the trucks that service warehouses, rather than the warehouses themselves. In the past, similar approaches have been made to address the heavy traffic drawn by sports stadiums or shopping malls.
According to estimates by the regulator, its plan will reduce nitrogen oxide emissions by up to 15 percent and result in up to 300 fewer deaths, up to 5,800 fewer asthma attacks, and up to 20,000 fewer work loss days between 2022 and 2031. The district estimated that public health benefits from its plan could be as much as $2.7 billion, about three times the projected costs.
The region, which includes portions of Los Angeles, Riverside and San Bernardino Counties and all of Orange County, has a population of 18 million people — more than most states.
It has been only five weeks since New York State legalized the use of recreational marijuana. The board that will oversee the rollout has yet to be appointed, let alone rules set for how licenses will be issued to cannabis businesses. The sale of legal pot in the state is still a year away. And, of course, marijuana remains illegal on the federal level.
But already the rush is on to get a piece of what could be a $4.2 billion industry in the Empire State.
Brokers are talking to landlords about leasing storefronts to dispensaries. Representatives of out-of-state cannabis businesses are flying in to scope out properties. And suppliers of medical marijuana are expanding in the hope that they will be able to branch into recreational sales.
Agricultural land upstate is now marketed as being “in the green zone” for hemp farming or the construction of grow houses for cultivating marijuana.
may soon change.
heated discussions among local officials, some of whom “can’t fathom the idea of the devil’s lettuce businesses within their borders,” said Neil M. Willner, co-chair of the cannabis practice at Royer Cooper Cohen Braunfeld, a New York City law firm.
But the pandemic may have softened the stance of some officials, given the jobs and tax revenue that cannabis businesses can generate after the protracted health crisis has decimated both. The state estimates that the new industry could bring it $350 million in annual revenue and create 30,000 to 60,000 jobs.
Meanwhile, funding is pouring into the industry in anticipation of possible federal legalization, some lenders will now do business with cannabis companies, and real estate investment trusts have sprung up to serve marijuana interests.
an increase in purchasing over leasing in the past year.
“Going forward, when banking becomes more normalized for us — when we have the opportunity to get real estate debt in the way traditional industries do — we would have a preference for owning real estate,” said Barrington Rutherford, senior vice president of real estate and community integration at Cresco Labs, a cannabis company with operations in several states.
law firms, consultants, insurance agents and accountants specializes in helping clients jump through regulatory hoops. A listing service that is the industry’s answer to Zillow offers a wide range of real estate, from $65,000 lots in an industrial park in Lexington, Okla., to a $109 million, 45,000-square-foot grow house in San Bernardino, Calif.
The brick-and-mortar side of cannabis real estate has also evolved.
As cultivation of marijuana has become more sophisticated, grow houses have expanded — they can be 150,000 square feet or more, with high ceilings, heavy-duty ventilation, lighting and security. Processing typically occurs in separate buildings with high-tech machinery.
dispensaries are increasingly stylish, offering a rarefied retail experience. Accomplished architecture and design firms have gotten into the act. There are even companies that specialize in kitting out dispensaries and other cannabis real estate.
And as marijuana gains broader public acceptance — and some celebrity glamour, with Jay-Z’s Monogram and Seth Rogen’s Houseplant — stores are opening in prominent locations near traditional retailers.
“We’re next to Starbucks in downtown Chicago,” Mr. Rutherford said. “In Philadelphia, the store we’re opening is a half block from Shake Shack and down the block from Macy’s.”
“We are building a portfolio of sites that would be enviable by any retail organization,” he added.
The New York State law also provides for licenses for “consumption sites,” and this is expected to give rise to clublike lounges and cannabis cafes. The prospect of such convivial settings has led to predictions that New York City may become the next Amsterdam.
These new storefront uses would appear to be a godsend for New York’s retail real estate market, where availability has increased and rents have fallen.
“A few years ago, when the market was stronger, it was harder to find landlords willing to play ball,” said Benjamin S. Birnbaum, a broker at the real estate services firm Newmark. “What’s changed, because of the pandemic, is that every landlord is willing to talk about it.”
in a recent CNBC interview.
Regardless of size, opening a dispensary can be complicated and expensive, in part because states have required that would-be retailers have control of a site, through a lease or option to lease, before they can apply for a license. But the number of licenses in some states is limited, with no guarantee a business will get one.
In Oregon, some applicants had to wait so long — one or two years, said Andrew DeWeese, a lawyer with Green Light Law Group in Portland — they eventually gave up and essentially sold their place in line.
“It’s a Catch-22,” said Kristin Jordan, a cannabis lawyer in New York City. “You want to secure real estate, but you don’t want to jump the gun.”
Still, the prospect of operating in New York, a state with more than 19 million residents and a major tourist destination, is so enticing that cannabis companies are getting their ducks in row.
Companies that have medical dispensaries, which have been operating since 2016, are in an enviable position because it is believed they will have an advantage in securing additional licenses.
Cresco Labs has four medical dispensaries in New York, including one in the Williamsburg neighborhood of Brooklyn. It is unclear whether the state will allow recreational marijuana to be sold at those locations, but Mr. Rutherford is hedging his bets, adding parking and in some cases expanding by leasing a storefront next door to an existing space.
“We are making sure those stores are ready for the future adult use market,” he said.
Seeing signs that customers are eager to gather and put the dark days of the pandemic behind them, the coffee giant Starbucks said that its sales in the United States made a “full recovery” in the first three months of the year.
Same-store sales in the U.S. climbed 9 percent in the company’s second quarter compared with the same period last year, while global revenues climbed 11 percent to $6.7 billion.
“In the last quarter, we’re seeing very early signs that friends and family were celebrating being together again,” Kevin Johnson, the president and chief executive of Starbucks, said on a call with analysts on Tuesday after the close of the markets. “While certainly not all markets are opening at the same speed in terms of vaccine distribution, we know this is the key that enables all of us to once again be together.”
Starbucks made a profit of $659 million in the quarter, up significantly from $328 million a year earlier, when many of its stores were closed because of the quarantine restrictions around the world.
Starbucks said it expected global same-store sales for the full year to climb as much as 23 percent as the rest of the world recovers and reopens from the pandemic.
“While the Covid-19 pandemic is not over, this moment is giving us confidence to raise our full-year guidance,” Mr. Johnson said.
U.S. members enrolled in its loyalty rewards program grew 18 percent over the past year, Mr. Johnson said; there are now more than 23 million 90-day active members. Drive-through activity also remained robust, with higher ticket sales as customers ordered multiple drinks and often added a food item to their order, like the Impossible Breakfast Sandwich or cake pops, Mr. Johnson said.
The gap between executive compensation and average worker pay has been growing for decades. Chief executives of big companies now make, on average, 320 times as much as their typical worker, according to the Economic Policy Institute. In 1989, that ratio was 61 to 1.
The pandemic compounded these disparities, as hundreds of companies awarded their leaders pay packages worth significantly more than most Americans will make in their entire lives, David Gelles reports for The New York Times.
In the course of his reporting, corporate public relations teams employed various tactics to justify their bosses’ big paydays:
A Hilton spokesman stressed that the figure in its latest proxy filing did not represent take-home pay for Chris Nassetta, because the company restructured several stock awards. “Said directly, Chris did not take home $55.9 million in 2020,” the spokesman said. “Chris’s actual pay was closer to $20.1 million.” Hilton lost $720 million last year.
Boeing wanted to make clear how much money Dave Calhoun “voluntarily elected to forgo to support the company through the Covid-19 pandemic” — some $3.6 million, according to a spokesman. Nonetheless, Mr. Calhoun was awarded $21.1 million last year, while Boeing lost $12 billion.
Starbucks, which awarded Kevin Johnson $14.7 million, was among many companies making the case that their chief executive was essential to future success. “Continuity in Kevin’s role is particularly vital to Starbucks at this time,” said Mary Dillon, a member of the compensation committee. The company made a $930 million profit in its latest fiscal year, down three-quarters from the previous year.
The Times’s David Gelles gives DealBook the backstory to his recent front-page article about rising C.E.O. pay during the pandemic.
Companies battered by the pandemic are handing out enormous pay packages to their C.E.O.s, highlighting the sharp divides in a nation on the precipice of an economic boom, but still wracked by steep income inequality.
Executive compensation has, of course, been soaring for decades now. Chief executives of big companies in the U.S. now make, on average, 320 times as much as the typical worker. In 1989, that ratio was 61 to 1.
Read the full story here.
HERE’S WHAT’S HAPPENING
A deep split in pandemic fortunes highlights an uneven global recovery. On one hand: The E.U. could let vaccinated Americans visit this summer, bringing much-needed tourism revenue to the region. (One potential hangup is a rising number of people who aren’t getting their second doses.) On the other: India will receive emergency medical supplies from the U.S. as it reports half of all new Covid-19 cases worldwide.
Netflix had a big night at the Oscars. The streaming company won seven Academy Awards last night, the most of any studio, but again fell short in its quest to win Best Picture. (That went to Disney, whose Searchlight Pictures’ “Nomadland” won the big prize; Disney won five awards over all.) AT&T’s Warner Bros. won three Oscars, while Amazon took home two.
An activist investor steps up its challenge at Exxon Mobil. Engine No. 1 argues in a new presentation that the oil giant faces an “existential business risk” because it is not taking bolder steps to move away from fossil fuels, The Financial Times reports. (Exxon and other major producers are set to report earnings this week.)
Second Chance Business Coalition, which was announced today.
Elon Musk is hosting “S.N.L.” Yes, really. The Tesla chief is scheduled to host “Saturday Night Live” on May 8. (We bet S.E.C. officials will be watching.) John Authers of Bloomberg Opinion has an interesting take on it: The Tesla chief’s antics are doing more to encourage adoption of green technology than any amount of environmentalist scolding.
The ‘massive threat’ in a ‘measly’ Supreme Court case
Today the Supreme Court will hear a case that could upend American politics. It has largely escaped attention because it’s not obviously political at all. “Americans for Prosperity Foundation v. Rodriquez” involves a fight over California’s donor disclosure requirements for charities and “may seem like a measly spat over state nonprofit rules,” Senator Sheldon Whitehouse, Democrat of Rhode Island, told DealBook. “But a massive threat lurks within.”
Today in Business
Nonprofits want more donor anonymity. Americans for Prosperity Foundation is a “social welfare” nonprofit arguing that the right to anonymous assembly guaranteed by the First Amendment extends to donor data. Critics say that a ruling in favor of the Koch-funded charity would allow more untraceable money to flow through groups designed to mask the outsize role that a few wealthy players have in American politics. If A.F.P.F. wins, “special interests will have a free pass to rig our democracy from behind a veil of secrecy,” Whitehouse said.
Companies secretly influence politics with “dark money” donations that are deliberately opaque. Basically, some “social welfare” groups are quasi-political yet don’t have the same reporting requirements as explicitly political groups. Similarly, trade groups take corporate donations and pass them on, obscuring the sources.
“The importance of dark money in society, the scope of it, is something people don’t really grasp, but it impacts everyday life,” said Anna Massoglia, a researcher at the Center for Responsive Politics.
A decision is expected around late June. Notably, the court took the case on Jan. 8, two days after the Capitol riot prompted a reckoning over corporate political donations. Both the Chamber of Commerce and the National Association of Manufacturers filed briefs supporting A.F.P.F.’s case for anonymity, and Allen Dickerson of the Federal Election Commission argued the same in a Wall Street Journal op-ed yesterday.
cottage industry of scammers.
Bain is buying $1 billion worth of desserts
Bain Capital Private Equity is buying Dessert Holdings in a deal that DealBook hears values the company at about $1 billion.
Dessert Holdings makes “Insta-worthy” cheesecakes and other desserts through three brands: The Original Cakerie, Lawler’s Desserts and Atlanta Cheesecake. The company, which sells to retailers and restaurants, was created through acquisitions led by its prior owner, Gryphon Investors. The dessert conglomerate emphasizes the “wow factor” of products like tuxedo truffle mousse cake that are made to look good on social media.
A sweet deal? In-store bakeries have held up well during the pandemic, while restaurants are expected to rebound post-Covid. There could be more consolidation in the industry, with George Weston announcing in March it plans to put its bakery business — which includes Wonder Bread in Canada — up for sale. Over the years, Bain has invested in a number of food service and restaurant brands, like Dunkin’ and Domino’s Pizza. It plans to develop “new and innovative products” as well as pursue more acquisitions after the Dessert Holdings deal, said Adam Nebesar, a managing director at the private equity firm.
Trevor Lawrence is getting paid in Bitcoin
As cryptocurrency goes more mainstream — thanks in part to the recent public listing of Coinbase — blockchain businesses are hustling for brand recognition. “We’re really trying to get our name out a lot,” said Sam Bankman-Fried, the C.E.O. of FTX, a crypto exchange that competes with Coinbase. One of FTX’s companies, the investment app Blockfolio, has signed an endorsement deal with Trevor Lawrence, the former Clemson quarterback and presumptive number-one pick in this week’s N.F.L. draft, DealBook is first to report.
29-year-old billionaire founded FTX in 2019, and said he regrets spending his early years “playing video games.” Now, he’s trying to make up for lost time and the “low name recognition” of his crypto brands by hitching their wagon to bigger brands. FTX recently agreed to pay $135 million for the naming rights to the N.B.A.’s Miami Heat arena for 19 years.
THE SPEED READ
ByteDance, the Chinese parent of TikTok, has reportedly delayed plans to go public because it hasn’t devised a corporate structure that would win approval from Washington and Beijing. (South China Morning Post)
A close look at the efforts by the Carlyle Group’s C.E.O., Kewsong Lee, to catch up to his private equity rivals. (WSJ)
Politics and policy
The law firm Jones Day has rehired at least seven lawyers who worked in the Trump administration, cementing its status as a top outpost for Republican legal experts. (FT)
Advisers to wealthy Americans are studying various strategies to minimize the hit from the Biden administration’s proposed tax hikes. (Bloomberg)
Ant Group, the Chinese fintech giant, reportedly plans to offer employees zero-interest loans backed by their stock options to bolster morale. (Bloomberg)
The culture of Travis Kalanick’s food-delivery start-up, CloudKitchens, is said to closely resemble the “bro-y” early days of Uber — and it’s losing workers as a result. (Insider)
Best of the rest
Honda said it expects all cars it sells will be electric by 2040. (Bloomberg)
One of the men who created the “Yale model” of endowment investing says the strategy is past its prime. (FT)
An eye-opening look inside the “slander industry.” (NYT)
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