BLOOMINGTON, Ind. (Inside INdiana Business) — A new study co-authored by an associate professor at the Indiana University Kelley School of Business, says a provision of the Tax Cuts and Jobs Act of 2017 did little to effect CEO pay. The legislation repealed a nearly 30-year-old exemption that allowed companies to deduct performance-based pay for executives, with the idea that companies would move away from performance pay to cash-based fixed compensation. The study found that after the repeal, CEO pay either stayed the same or increased.
Bridget Stomberg, associate professor of accounting at the Kelley School, tells Inside INdiana Business the study looked to see if Congress achieved what it intended to do.
“We were looking for a reduction of performance pay, an increase in salary, and then third, if you give an executive or anybody more guaranteed pay, then the total level of pay should go down,” said Stomberg. “So we were looking to see a decrease in performance pay, a decrease in total pay, and an increase in salary. And we really didn’t find any evidence of that.”
The study, “Examining the Effects of the Tax Cuts and Jobs Act on Executive Compensation,” was co-authored by Lisa De Simone, an associate professor of accounting at the University of Texas’ McCombs School of Business, and Charles McClure, an assistant professor of accounting at Booth.
It was published online by the journal Contemporary Accounting Research. You can read the full article by clicking here.
Stomberg says in the mid-1990s, Congress capped the amount of executive compensation that a public company could deduct in a year at $1 million, with the exception of performance-based pay.
“So essentially, what that did was it allowed companies to deduct an infinite amount of performance based compensation like stock options,” she said.
The 2017 legislation, in addition to reducing the corporate tax rate from 35% to 21%, removed the exemption for performance-based compensation.
The study examined changes in executive compensation from fiscal years 2017 to 2018, when the new tax rules took effect. The researchers then looked at compensation in 2019 and 2020.
“Even three full years after the law took effect, we didn’t see any evidence of a reduction in CEO pay,” Stomberg said.
Stomberg says she and her co-authors believe the legislation as an example of Congress perhaps overestimating the tax motivations of public companies. She says there are several sound non-tax reasons why a company would use performance pay and stock-based compensation, including aligning executives’ incentives with shareholders and the fact that it doesn’t require cash.
The authors believe the results of the study could also have an impact on other avenues of curbing executive compensation, such as an excise tax related to CEO pay ratios, or the difference in pay between CEOs and the median worker, which has already been implemented in cities such as Portland, Oregon and San Francisco.
“If Congress’ fundamental assumption about the relative importance of taxes in the design of executive compensation is overstated, its ability to shift current compensation practices through changes in tax policy is also likely overstated,” the authors said. “As a consequence, policymakers should reconsider whether changes to the taxation of executive compensation are a viable path towards addressing the perceived issues of excessive executive pay and inequality.”
BLOOMINGTON, Ind. (Inside INdiana Business) — A Bloomington-based startup that bills itself as “LinkedIn for the performing arts,” is set to receive its third investment from IU Ventures. Stagetime plans to use the funding to fuel product refinement and further customer acquisition.
Stagetime’s digital platform provides networking benefits for people in the performing arts industry. The company says instead of a traditional resume format, users can showcase their artistic talent through photos, video and audio.
IU Ventures did not say specifically how much it is investing in Stagetime in this latest round. The funding is being awarded through the IU Philanthropic Venture Fund, which supports early-stage startups with IU connections.
Jennie Moser, founder and CEO of Stagetime and a graduate of the IU Jacobs School of Music, says IU Ventures and its chief venture officer, Jason Whitney, have been a major source of support since the startup was launched.
“They have been thoughtful advocates for Stagetime since our earliest days and have been remarkably diligent in getting to know us over the years so that they could best support us,” Moser said in written remarks. “As we’ve seen our industry finally return to live performance with gusto this summer, this new investment from IU Ventures allows us to be proactive in supporting artists and creative professionals when they need it most.”
IU Ventures has made two previous investments in Stagetime through the IU Angel Network, which is designed to connect startups with prospective investors. IU Ventures participated in Stagetime’s $1.5 million Series A funding round last fall, which followed the initial investment in September 2020.
Stagetime currently has more than a dozen employees, though it’s not clear if the new funding will lead to additional jobs.
The company says it is planning to launch new features to help arts organizations find top talent, including a “casting tool” to allow users to plan for future talent needs.
BLOOMINGTON, Ind. (WISH) — Monroe County residents can get two free at-home COVID-19 tests per person from the Monroe County Health Department or the Monroe County Public Health Clinic.
The tests will be available from 8:30 a.m.-4 p.m. weekdays at the department, 119 W. Seventh St.
The tests also will be available from 8 a.m.-4:30 p.m. Monday-Thursday at Monroe County Public Health Clinic, 333 E. Miller Drive, through June. The clinic’s hours will change in July. It’ll be open until 6 p.m. Mondays, and from 8-11 a.m. every second Saturday of the month. The public health clinic is a partnership between the health department and Indiana University Health Bloomington Hospital.
Free at-home COVID-19 tests also will be distributed to local agencies and organizations that serve high-risk and high-need clients.
The health department and the health clinic received 20,000 at-home COVID-19 tests from the Indiana Department of Health in late May.
Questions? Contact the Monroe County Health Department COVID Hotline at 812-349-2997 or the Monroe County Public Health Clinic at 812-353-3244.
This story was updated with information provided Monday by Monroe County Health Department to correct the time that the Monroe County Public Health Clinic will close.
BLOOMINGTON, Ind. (Inside INdiana Business) — Indiana University has named Ash Soni interim dean of the IU Kelley School of Business. Soni, who currently serves as executive associate dean for academic programs at the school, will begin his new role August 1.
Soni succeeds Idie Kesner, who announced in April she will step down as dean in order to return to teaching. Her last day as dean will be July 31.
Soni has been with the Kelley School since 1981 and is a professor of operations and decision technologies.
“Ash has served as a prominent, effective leader at the Kelley School for more than 40 years,” IU Bloomington Provost and Executive Vice President Rahul Shrivastav said in written remarks. “His history of helping guide the school through many transitions and changes qualifies him well for the interim dean role.
Shrivastav says the school is preparing for a national search to find Kesner’s permanent successor. However, the school did not provide an estimated time frame for when that person would be selected.
BLOOMINGTON, Ind. (Inside INdiana Business) — A Bloomington-based startup that wants to streamline the process for real estate developers to source construction materials has won the 2022 Crossroads Collegiate Pitch Competition. Business and entrepreneurship incubator The Mill says Andrew McMaster, co-founder and chief executive officer of Finniva, took home a $2,500 investment from the Flywheel Fund.
Finniva is building a streamlined marketplace for large multi-family and commercial real estate developers to source materials directly from the supplier. Finniva helps developers efficiently locate the best materials for each project’s specifications, which McMaster says keeps the work on time and on budget.
“We believe in rethinking how things are done and aim to revitalize the way developers source direct materials for good. I couldn’t be more proud of the work we’ve done,” said McMaster
McMaster is a student at the Kelley School of Business at Indiana University Bloomington. He founded the company with Kelley grad Michael Wayne, who is also CEO of Detroit Riverside Capital, a real estate investment firm with focus on constructing mixed-use communities.
They’re working with developers to build the platform and populate it with suppliers. They are currently focused on doors, but plan to expand to other products. Finniva expects to launch in January 2023.
Crossroads Collegiate Pitch Competition was open to any student currently enrolled at any Indiana university or college with a startup based in Indiana.
The Mill runs Flywheel Fund which is a member-managed capital fund for early-stage and high potential startups based in Indiana.
BLOOMINGTON, Ind. (Inside INdiana Business) — An organization in Bloomington formed through a merger of three performing arts groups has unveiled its new brand and plans for an inaugural season. Constellation Stage & Screen will officially begin operations in July and is launching a five-year fundraising campaign to increase annual revenue to support its theater and film productions, as well as arts education initiatives. The organization looks to bring a unique concept to Indiana’s arts community with its “Page to Stage to Screen” pipeline model.
Co-Artistic Directors Chad Rabinovitz and Kate Galvin explained the model and the benefits it could bring in an interview with Inside INdiana Business.
“There is no other theater our size that offers what we’re doing with film production as an integrated element into a regional-level theater,” said Rabinovitz. “So, we actually have an entire film department. We’ll have film screening series. We’ll be developing a feature film every other year based on a new work that we’ve developed from page to stage to screen.”
The first show as part of the model will be a production of The Grown-Ups, a new play written by Skylar Fox and Simon Henriques. It will be performed at The Hundredth Hill Artist Retreat and Residency from September 14-October 1.
Constellation then plans to develop the show into a full-length feature film to be released globally.
Galvin says the new model will have more economic benefits for the organization.
“From a business standpoint, doing theater is what we’ve always done; there is definitely a limit to what our potential revenue is on every production we produce because it’s only going to run for a certain amount of time,” she said. “With the film, that is going to live on for years and years and years to come, so…there’s a potential revenue stream for our organization on a much longer timeline, which is really exciting.”
Last month, The Bloomington Playwrights Project, Cardinal Stage and Pigasus Institute announced the merger, which also includes taking over management of the John Waldron Arts Center in Bloomington, which reopened in January and continues to undergo renovations.
Galvin says while the merger was not contingent upon assuming management of the Waldron, it was an important move.
“With Ivy Tech returning ownership of the building to the city of Bloomington, we really saw sort of a void and were very concerned that there was no one who was going to step in to save that building and maintain it as a performing arts and visual arts center,” she said. “That’s the place where we perform a lot of our shows. So, we felt a lot of responsibility to our business and also to the community, to the rest of the arts organizations in town to kind of step in and step up to the place and take the lead on the Waldron and make sure it continues to be an asset for the whole community.”
The Waldron will host performances of Oscar Wilde’s The Importance of Being Earnest in October as part of Constellation’s inaugural season. The organization has additional plays and musicals scheduled through June 2023.
You can view the full season schedule by clicking here.
Rabinovitz says looking forward, Constellation is focused on completing the renovations to the Waldron, but also getting its theater and film arts education programming up and running, beginning with summer camps that will start in June.
“We’re also building a whole new staffing structure,” he said. “It’s not just sort of fitting pieces together; it’s creating an entirely new organization and in some ways, inventing a new business model to figure out how to maintain the scale of what we’re doing in the size of our community.”
Constellation has launched the Big Bang Campaign to support the new organization’s plans. Bloomington-based Cook Group has pledged a $300,000 per year principal commitment for unrestricted operating support and says it will match all new and renewable annual gifts up to an additional $150,000 per year.
Constellation says its ultimate goal is to secure $250,000 in new, sustainable annual giving by 2027. You can learn more about the campaign by clicking here.
BLOOMINGTON, Ind. (Inside INdiana Business) — The new general manager of New Jersey-based Catalent Inc.’s (NYSE: CTLT) manufacturing facility in Bloomington says the company’s continued expansion in Monroe County is unprecedented, but still “structured and planned growth.” Andrew Espejo, who joined the biopharma company about five months ago, says the foundation set in Bloomington, combined with the talent and proximity to universities such as Indiana University and Purdue University, makes the facility conducive to such growth.
Catalent this week announced a $350 million investment to expand operations in Bloomington and create 1,000 jobs over the next several years.
In an interview with Inside INdiana Business Reporter Wes Mills, Espejo says attracting top talent remains a challenge.
“It is tough, but we have great talent acquisition teams that are very closely partnering with the universities, with Ivy Tech, with Hoosier Hills, organizations such as that, helping us develop training programs,” he said. “Now, we try to get as many people as we can from within Bloomington, but we recognize that we may have to go outside the city proper of Bloomington in the surrounding counties and maybe sometimes even further out.”
Espejo says the company wants to continue to grow in Indiana and in order to keep adding local talent, the state’s life sciences industry needs to get involved early in the education system.
“We really need to turn our students onto science, technology, engineering, and math,” he said.
He adds the state also needs to further foster education and training with Indiana’s higher education systems in order to bring in even more life sciences business.
The Bloomington facility totals about 1 million square feet and Espejo says the investment will not add any new structures, but transform some existing warehouse and “gray” space in order to expand its drug manufacturing and vial-filling operations.
The facility has recently been manufacturing COVID-19 vaccines for Moderna and Johnson & Johnson, which Espejo says has added to the company’s reputation.
“The vaccine is a good part of our business, [but] it’s not our only business,” he said. “We have a lot more that we’re working on. We have lots of companies that want to do business with us because of our reputation, because of our capabilities. We’re really excited about the future growth and what we can bring to our clients.”
BLOOMINGTON, Ind. (Inside INdiana Business) — Indiana’s life sciences sector has received another economic booster shot with a more than $350 million investment from New Jersey-based Catalent Inc. (NYSE: CTLT). The biopharma company says it will grow operations at its manufacturing campus in Bloomington and hire more than 1,000 new employees over the next several years. The company says the new investment will allow it to expand its drug product manufacturing and vial-filling capabilities.
The new positions are on top of previous jobs commitments made by the company, which total approximately 2,300 positions. Catalent operates a 1-million-square foot manufacturing facility in Monroe County.
“Our continued growth in Bloomington demonstrates how important this site has become to the production of medicines for patients worldwide,” said John Chiminski, chair and chief executive officer at Catalent. “The talented, diverse Hoosier workforce and the ambitious business environment provide a strong foundation for our long-term presence in Bloomington.”
The Indiana Economic Development Corp. says it will invest up to $40 million in the form of incentive-based tax credits, based on Catalent’s job creation plans. IEDC says it has also offered another $4 million combined in conditional training grants and redevelopment tax credits.
The Bloomington facility has recently been used to produce the Moderna and Johnson & Johnson COVID-19 vaccines, among other biologic and pharmaceutical products. In October, the company detailed plans to add up to 600 jobs in Monroe County.
BLOOMINGTON, Ind. (Inside INdiana Business) — The Indiana University Kelley School of Business has received a $1 million gift from alumnus Jeff Albers and his wife, Alison. The university says the gift will create an endowment to support programs at the Center for the Business of Life Sciences.
IU says the Albers Family Life Sciences Endowment will give preference to programs related to biotechnology and pharmaceuticals, medical devices and healthcare ecosystems.
Albers, who graduated from the Kelley School in 1993, is the executive chairman and former chief executive officer of Massachusetts-based precision therapy company Blueprint Medicines (Nasdaq: BPMC). The company specializes in therapies for people with cancer and blood disorders.
“So much of how I developed and how I think about issues and opportunities was first honed at the Kelley School; it’s where I started to recognize areas of interest that were both challenging and rewarding,” Albers said in written remarks. “Our hope is that it allows more students at IU to be exposed to the opportunities within life sciences where they can benefit society.”
The Center for the Business of Life Sciences was founded in 2008. IU says the center offers a certificate program for students pursuing a career in life sciences or individuals seeking to better understand the interactions of business and science.
The center has about 20 Kelley professors who serve as faculty research fellows.
“The mission of the Kelley School is to transform the lives of students, organizations and society through management education, research and service,” Kelly School Dean Idie Kesner said. “The Center for the Business of Life Sciences provides an excellent example of how we do that, serving the needs of Indiana companies whose products enable many people to live longer and better lives. Jeff and Alison Albers’ gift will enable us to do even more.”
BLOOMINGTON, Ind. (Inside INdiana Business) — Lauren Shields, a content strategist for a major tech company, moved to Bloomington just six weeks ago. She was enticed by incentives offered by the city to relocate there through the MakeMyMove platform. Indianapolis-based TMap LLC launched the company in 2020 to connect remote workers to communities hoping to attract talent.
In an interview with Inside INdiana Business, Shields said after hopscotching from city to city, including New York, Atlanta and Tampa, she decided the Midwest was calling her home.
“I came from the south suburbs of Chicago, and I’ve lived all over the country. And the there just isn’t any place like it [the Midwest] and I just missed it,” said Shields.
In addition to her primary job in the tech sector, Shields is also a professional writer and an improvisational performer. Art is near to her heart, which helped her select Bloomington and its arts and culture scene.
“I’ve been on stage a lot. I like theater and the arts and Bloomington has a really a great community in that regard,” said Shields.
The newly rooted transplant says she came across an article on news and entertainment website Buzzfeed about cities offering incentives to relocate. Some communities offer cash bonuses and relocation packages. But those benefits were not important to Shields.
“What was attractive to me about Bloomington was that it was not offering a cash bonus, which told me that what they were looking for people who were interested in moving to Bloomington because they liked Bloomington, not because they wanted five grand or 10 grand,” Shields said.
Shields says Bloomington also offered her a place on a nonprofit board as a way to encourage newcomers to get civically engaged.
“And that’s really what I was looking for when I was looking for someplace to relocate is where can I make a positive impact,” said Shields.
In an interview with Inside INdiana Business host Gerry Dick, Shields talked about why she chose Bloomington.
MakeMyMove Co-founder Evan Hock will appear this weekend on Inside INdiana Business with Gerry Dick to discuss the success the website is having in attracting remote workers to explore new places to live, work and play.