Welcome to the Dec. 24 Monday Business Briefing, your weekly business intelligence digest from Insider Louisville.
Humana executives sell nearly $10M in stock
Fourteen Humana executives in the last few days have received about $16 million worth of stock as part of their long-term compensation and retention plans. They also sold shares with a value of about $9.7 million.
In total, the executives received nearly 53,000 shares through their plans. They sold just over 32,000 shares.
CEO Bruce Broussard acquired more than 20,000 shares and sold nearly 9,200, the most by far, netting him nearly $2.8 million. Chief Corporate Affairs Officer Heidi Margulis sold nearly 3,800 shares, with a combined value of $1.3 million.
Chief HR Officer Timothy Huval and Healthcare Services President William Kevin Fleming each sold nearly $1 million worth of stock. Most of the remaining executives netted far below $1 million, with one of them selling just $28,580.23 worth.
Fleming and Group Business President Christopher Hunter also gave about $250,000 worth of stock as gifts to charity.
In most cases, the executives received shares that had been granted over the last few years, but vested this month. For example, Broussard received 8,693 restricted stock units on Dec. 15, which were part of stock units that had been awarded on Feb. 18, 2016, with a third of that award vesting on Dec. 15 of the years 2016, 2017 and 2018.
Broussard received another 8,126 shares on Dec. 15 that were part of a package granted on March 8, 2017, with a third of that award vesting in December of 2018, 2018 and 2019. Broussard received an additional 3,414 shares on Dec. 15 that were part of restricted stock units granted Feb. 19, but which are vesting this year, next year and in 2020.
The company determines the awards on how the company performs compared to companies it has selected in its peer group and compared to the Standard & Poor’s 500 index.
The restricted stock units are part of Humana’s three-pronged compensation package, which includes salary, short-term and long-term incentives.
In its proxy statement, Humana said the package is “designed to place a substantial portion of pay at risk.”
“While salaries are intended to be assured, the other two elements only have value if certain key performance results are achieved,” Humana said. “Cash incentives are paid only upon the achievement of defined objectives. Grants of stock options only have value to executives if the value of the Company increases through common stock price appreciation and any applicable vesting conditions are satisfied, providing a retention benefit.
“Time-based restricted stock units generally provide value regardless of whether our stock price increases from the date of grant, providing a retention and inducement benefit,” Humana said, “and performance-based restricted stock units are only earned based upon our achievement of certain pre-established performance goals and generally requires continued employment for vesting, providing a retention and performance benefit.”
Humana’s shares are up more than 14 percent for the year, easily outperforming major market indices, which are all down for the year. However, Humana’s shares have lost about 8.6 percent of their value in the last week. The Dow Jones industrial average in the last week has fallen about 5.1 percent. —Boris Ladwig
Two Norton Commons businesses growing
A new live-work development under construction in the South Village Town Center will allow two existing Norton Commons businesses to expand.
The interior design and home decor business Set the Stage will move into a larger 2,200-square-foot space in the center, located at Meeting Street and Norton Commons Boulevard, from its current location at 10515 Meeting St., according to a news release.
The drapery retailer Draped in Style, also is moving from 9412 Norton Commons Blvd. into a roughly 3,300-square-foot space.
“This new space is going to allow us to expand our inventory and showroom,” Marybeth Crouch, co-owner of Draped in Style, said in the release.
Both businesses will remain in operation until they to move into their new digs by late summer or early fall of 2019.
The South Village Town Center project includes retail and restaurant spaces on the ground floors, with companion townhomes on the second and third floors. Norton Commons still have four developable lots available. —Caitlin Bowling
JCPS unveils facilities wish list
Four new schools and heavy renovations in others could be in the future for Jefferson County Public Schools, Superintendent Marty Pollio said last week.
Pollio shared an initial facilities proposal with the district’s facilities committee, touching on several initiatives he’s hinted at for months.
Headlining the list: Three new elementary schools, a new middle school, significant renovations to Academy @ Shawnee and moving the new W.E.B. DuBois Academy to a permanent location.
Positioned to serve growing areas of Louisville and reduce overcrowding, the new elementary schools are tentatively expected off of South Dixie Highway, of West Broadway and in Newburg.
The middle school is slated to be in the East End. Current schools are expected to be combined into the new schools, if the proposal passes.
Headlining the list of makeovers, the Academy @ Shawnee would receive a full-scale renovation. The school’s third floor has been closed off for multiple years, but would reopen post-renovation.
W.E.B. DuBois Academy, an all-boys middle school, opened on Male High School’s campus in August. Under the proposal, it will move to a permanent location on East Broadway.
Additionally, the district wants to split alternative schools into separate facilities for middle and high schools — a part of a larger shift in how JCPS serves alternative school students. The alternative middle school is slated for the Minor Daniels Academy site, with the high school at Liberty High School.
District officials and the school board have been discussing budget priorities for the coming year for months. Without new money coming from the state, JCPS will need to reallocate money within the district to pay for new facilities and other initiatives.
Pollio has said they’re taking a hard look at all expenses, including central office positions and programs that are not performing as the district hoped.
Mobile pantry takes aim at food insecurity
A mobile food pantry is set to become a monthly staple outside the L&N building on West Broadway next year in Louisville.
The Dare to Care Food Bank will set up the pantry on the fourth Thursday of each month, starting Feb. 28, in the parking lot.
Gov. Matt Bevin’s wife, Glenna, announced the pantry’s new stop while in Louisville Thursday for a holiday-themed community gathering at the building, which houses employees of the state Department for Community Based Services (DCBS).
The pantry — stocked with meat, dairy products, fruits, vegetables and other items — will serve the general public, but it’s also expected to attract people in state programs.
“That’s why we wanted to help provide the service,” said Doug Hogan, a spokesman for the Kentucky Cabinet for Health and Family Services. “The location makes it extremely convenient.”
Dare to Care has more than 50 mobile food pantry stops a month and an interactive tool on its website to search for them, according to the charity.
DCBS, which is part of the Cabinet, handles social services, such as adult and child protection, and helps people enroll in things like child care, food benefits and cash-assistance programs.
The need to help the hungry is reflected in a food insecurity report released last month by the Community Foundation of Louisville and the Lift a Life Foundation. It noted that more than 120,000 local people have limited or uncertain access to adequate food.
“Tens of thousands of our neighbors struggle to put food on their family table,” Dare to Care Executive Director Brian Riendeau said in a state news release.
Meal kits were distributed to more than 200 families at the community celebration. L&N employees and other staffers from the Cabinet donated money to pay for the event, which was coordinated by DCBS and Dare to Care.
“Every family should be able to have a good meal together at Christmas,” First Lady Bevin said in the release. “This mobile food bank and the fun we had today were meant to make the holiday brighter for these families.” —Darla Carter
Moody’s: Pension ruling ‘credit negative’ for Kentucky, but no downgrade
The credit rating agency Moody’s issued a report last week calling the unanimous Kentucky Supreme Court ruling striking down the state’s new public pension law a “credit negative” event, though it did not downgrade Kentucky’s credit rating.
According to the report, Kentucky maintains its Aa3 stable rating despite the court’s decision “delaying reforms to the state’s severely underfunded pension plans that were set to provide modest savings over the long term.”
Moody’s also noted the failed special legislative session called by Gov. Matt Bevin last week to pass another pension bill, which lasted less than 24 hours before the General Assembly chose to adjourn without passing any legislation.
A letter from Bevin’s general counsel to the General Assembly when the session was called said it was necessary to protect the state’s credit rating, adding that “two credit rating agencies have contacted us with questions that could lead to a downgrade” due to the court’s decision.
The Moody’s report also noted that Kentucky’s improved level of pension contribution appropriations in recent years “remains
a key credit consideration” in the state’s rating going forward. — Joe Sonka
Sazerac buys 19 spirits brands from Diageo, including Seagram’s
Fireball isn’t the only cinnamon-flavored shot now in the Sazerac portfolio.
On Friday, it was announced that Sazerac — an American spirits company that owns Kentucky’s Buffalo Trace and Barton 1792 distilleries — has agreed to purchase 19 brands of liquors from the UK spirits giant Diageo, which also has a presence in Kentucky with the Bulleit and Stitzel-Weller distilleries.
But those bourbons were not part of the sale. What are part of the $550 million deal are labels like Canadian whisky Seagram’s, Myers’s, Romana Sambuca, Yukon Jack, Black Haus, Parrot Bay and John Begg brands, among others.
And our preferred cinnamon shot from college — long before Fireball was the hip thing to do — Goldschlager is now part of Sazerac, too, gold flecks and all.
According to a news release, Diageo has agreed to enter into long-term supply contracts with Sazerac, in which some brands will continue being made where they are now for a period of up to 10 years.
Sazerac public relations manager Amy Preske tells Insider she has no further information on if some of these brands will be relocated to Kentucky to be produced.
Apellis Pharmaceutical stock swings
Shares of Crestwood-based Apellis Pharmaceuticals fell Thursday morning after the drug developer provided an update on previously disclosed inflammation that patients had suffered during late-stage drug trials. However, shares recovered in the afternoon.
Shares rose Friday after Apellis said that the drug, APL-2, has received approval from the Food and Drug Administration to be designated an “orphan drug” for a renal disorder. The designation qualifies Apellis for development incentives, including tax credits.
Apellis’ stock price had fallen 17 percent in mid-October after the company said that some patients suffered inflammation in late-stage clinicals of APL-2, which the company hopes can function as a platform drug that treats several diseases. It is in clinical tests to determine its efficacy and safety for treating blood-related autoimmune diseases and a genetic blood disorder.
Apellis said Thursday that it expects to restart clinical trials it had paused because of the inflammation issue and expects the trials to be completed within its original timeline.
The company reiterated that it believes the inflammation was a result of a manufacturing problem that introduced an impurity or contaminant into the drug. Apellis said it does not believe that the inflammation was caused by the drug’s chemical composition.
Early afternoon Friday, after the company had announced the orphan drug designation, shares were up 2.4 percent, trading above $14. Broader market indices were down. Apellis CEO Cedric Francois said in a news release that the FDA designation was “an important recognition” of the drug’s potential to treat “a rare disease that can lead to renal failure, and for which there are no approved treatments currently for patients.” —Boris Ladwig
River Ridge Development Authority is donating 100 acres of land to the Town of Utica for development including a proposed public safety center and emergency temporary housing facility and 79 acres to the city of Jeffersonville for a community park.
The Home Center Department Store opened in the old Winn Dixie location on South Fourth Street in Old Louisville on Friday.