The Boston Globe - 20.09.2019

B10 Business The Boston Globe FRIDAY, SEPTEMBER 20, 2019

25

THEBOSTONGLOBE

Indexof publicly traded companiesin Massachusetts

Major stock indexes ended mixed after an early rally faded.
The S&P 500 managed to hold on to a tiny gain that extend-
ed its winning streak to a third day. The benchmark, which
is within 0.7 percent of its record high, set on July 26, end-
ed the day slightly down for the week. Gains in health care,
tech, utility, and other sectors outweighed losses elsewhere
in the market. Encouraging economic reports encouraged
investors and reinforced the Fed’s outlook that growth will
slow, but not to a recession. Recent data suggest the job
market is solid, wages are rising, consumers are spending,
and even sluggish sectors like manufacturing and construc-
tion show signs of rebounding. But investors have been try-
ing to gauge how the economy will fare amid a slowdown in
economies overseas and the US-China trade war. Merck
was a big winner, rising 1.1 percent. Microsoft gained 1.
percent after boosting its quarterly dividend. Sempra Ener-
gy added 1.1 percent to lead utility sector gainers. Financial
and industrial stocks were among the losers. Regions Fi-
nancial slid 1.4 percent; Southwest Airlines lost 2 percent.
Energy stocks also fell, Hess by 2 percent.

Markets

Stockindexesendthedaymixed

DOW JONES industrial average

NASDAQ Composite index

S&P 500 index

Globe 25 index

SOURCE:BloombergNews

With his Senate campaign

all but launched, Joe Ken-

nedy III is shaking up

Massachusetts politics.

But the congressman

caused a different kind of

stir last November, by em-

barking on a crusade for

what he called “moral cap-

italism.”

Companies, Kennedy told the New Eng-

land Council, shouldn’t focus only on

shareholders. Broader societal benefits

need to be important factors, too.

It sounded noble, if a little intangible.

What could Congress do to make this goal

a reality? Kennedy suggested few specifics

at the time.

On Thursday, though, Kennedy offered

something concrete: He became the lead

House sponsor of a bill that would require

public companies that buy back their

shares to also dole out some of their profits

to their workers.

Kennedy has cosponsored a number of

other bills aimed at addressing income in-

equality in the months since that post-

Thanksgiving speech in Boston. But a

spokesman says this is the first time he has

taken the lead in the House on one of

them.

Kennedy tells me he’s upset that much

oftheGOP’s$1. 5 trilliontaxcutinlate

2017 went to stock buybacks. While some

of their tax-cut savings was invested in oth-

er ways, many companies used their new-

found cash to gobble up their own shares.

Buybacks rose to record levels in 2018, to-

talingmorethan$80 0 billion,accordingto

S&P Dow Jones Indices. Apple led the way,

followed by Oracle and Wells Fargo. Stock

buybacks reward investors, often by driv-

ing up the price for shares that remain on

the market. Guess who also benefits: top

executives whose compensation packages

are typically linked to stock performance.

But half of the country doesn’t own

stocks, Kennedy says, and sees no direct

boost.

As Kennedy researched legislation

aimed at tackling this issue of moral capi-

talism, he came across a stock buyback bill

that Senator Cory Booker of New Jersey

filed last year. It’s this bill that was reintro-

duced, with Kennedy now leading the

charge on the House side.

This “Worker Dividend Act” would re-

quire public companies that choose to buy

back their shares to give a huge chunk of

their profits to employees, too. The total

minimum handout would equal the

amount a company paid to buy back stock

during a given year, or half of any US oper-

ating profit in excess of $250 million —

whichever number is lower. The payouts

could be divvied up as bonuses or in raises,

but they would need to be equal in size for

everyone, regardless of title or status.

Other Democrats have taken aim at this

issue in the wake of the Great Tax Cut Bo-

nanza. Senator Sherrod Brown, for exam-

ple, unveiled a bill in July requiring compa-

nies to pay their workers $1 for every $

million of buybacks.

Big Business, no surprise, remains ada-

mantly opposed. The Business Roundtable

argues that buybacks contribute to the re-

tirement security of millions of Americans,

and federal mandates on how companies

spend their profits would stifle growth. A

US Chamber of Commerce executive says

these bills would harm “Mr. and Mrs.

401(k),... the primary beneficiaries of

stock buybacks in the past.”

Kennedy knows the odds could be slim

for his bill becoming law — at least as long

as the GOP controls the Senate. But he

views the public debate around these mea-

sures as a way to highlight inequities in the

current system and to put pressure on Cor-

porate America.

He salutes the Roundtable’s recent,

much-publicized stance that companies

should no longer just focus on sharehold-

ers as a top priority but also the interests of

suppliers, customers, employees, commu-

nities. It sure sounded familiar: The state-

ment mirrored the themes in that speech

Kennedy made last fall to the New England

Council. But moral capitalism, Kennedy

says, is more than just a press release.

We will hear more from Kennedy about

moral capitalism on the campaign trail, es-

pecially now that he is headed toward a

Democratic primary, in an effort to unseat

incumbent Ed Markey.

Kennedy says it’s just a coincidence that

this bill was reintroduced two days before

his big Senate announcement. If so, it

should be a helpful coincidence, as he ham-

mers away at themes of economic inequali-

ty — and hopes they resonate with voters.

Jon Chesto can be reached at

[email protected]. Follow him on

Twitter @jonchesto.

Kennedypushesbackonbuybacks

By Jon Chesto

GLOBE STAFF

The yearslong saga of the

East Cambridge courthouse

tower appears to have finally

reached a resolution, one that

will lead to the redevelopment

of the vacant, asbestos-contam-

inated building.

The Cambridge City Council

on Wednesday voted 6 to 3 in

favor of a plan to lease 270

parking spaces in a municipal

garage across from the tower to

Leggat McCall Properties. The

developer had originally sought

420 spaces, to serve the

430,000 square feet of offices or

research space it wanted to

build in the 22-story tower on

Thorndike Street.

The amount of office space

in the tower will also drop, be-

cause Leggat agreed to double

the number of affordable hous-

ing units in the building, to 48.

The idea was proposed by

Councilor Sumbul Siddiqui,

considered the swing vote.

Leggat will also pay more in-

to the city’s affordable housing

trust fund, $15 million instead

of $11.5 million.

Leggat won the right to re-

develop the Sullivan Court-

house in late 2012. In return, it

agreed to pay the state $33 mil-

lion. But that transaction got

hung up as Leggat dealt with le-

gal challenges and, more re-

cently, the parking issue. Leg-

gat still needs Cambridge Plan-

ning Board approval to change

the parking provision. But the

council vote was considered the

last major hurdle.

“After nearly seven years, we

finally look forward to the

transformation of this building

— now with additional afford-

able housing — into a purpose-

ful and remediated property

that the City can be proud of,”

Leggat executive Rob Dickey

said in a statement.

Democratic State Represen-

tative Mike Connolly helped

lead the opposition to Leggat’s

parking request, saying East

Cambridge needs more afford-

able housing, not more offices.

He said Thursday that while he

has mixed feelings about how

the process was handled, he

considers the doubling of af-

fordable housing units a signifi-

cant victory.

Jon Chesto can be reached at

[email protected]. Follow

him on Twitter @jonchesto.

Courthouseproject

clearsacrucialhurdle

who in the late 1990s cofound-

ed the firm that became Iron-

wood Pharmaceuticals.

In addition to her scientific

acumen and leadership skills,

Hecht said, Lehmann’s two de-

cades in New York have given

her a new perspective on re-

search. “The Whitehead’s a

uWHITEHHEAD

Continued from Page B

great and special place, but I

think it could also benefit from

fresh eyes and ears,” he said.

Lehmann has made seminal

discoveries in developmental

and cell biology, particularly in

the area of germ cells. Germ

cells give rise to sperm and eggs

and carry precious genetic in-

formation from the parent that

they contribute to the embryo.

Much of her work has involved

the fruit fly, one of the most im-

portant model organisms in sci-

entific research.

As a child, Lehmann was in-

terested in the arts and science,

according to an interview with

her that was published in 2011

in the Journal of Cell Biology.

Her mother was a teacher pas-

sionate about literature, she

said. Her father was an engi-

neer more interested in science.

“I was interested in both,

but although I liked reading

and poetry, it was very clear to

me this wouldn’t be an easy ca-

reer track,” she said.

Jonathan Saltzman

can be reached at

[email protected].

NYUbiologistwillleadWhiteheadInstitute

LANE TURNER/GLOBE STAFF/FILE 2019

The former Edward J. Sullivan Courthouse in East

Cambridge will have less office space and more housing.

Jon Chesto

CHESTO MEANS BUSINESS

By Dee-Ann Durbin

ASSOCIATED PRESS

Airbnb Inc. said Thursday

it plans to go public in 2020, a

long-awaited move by the

home-sharing company that

is both loved and reviled for

its disruption of the hotel

business.

Airbnb disclosed the news

in a brief statement. It didn’t

give a target date for the ini-

tial public offering or say why

it thinks the timing is right.

Airbnb was valued at $31 bil-

lion last year, according to Re-

naissance Capital, which re-

searches IPOs.

San Francisco-based Airb-

nb was launched in 2008. Co-

founders Brian Chesky and

Joe Gebbia needed some extra

cash, so they put three air

mattresses on their apartment

floor and set up a website

promising a place to sleep and

a free breakfast. They named

their new venture AirBed and

Breakfast.

Since then, Airbnb has

grown into one of the world’s

largest home-sharing plat-

forms, rivaled only by Book-

ing.com. Six guests check into

an Airbnb every second, the

company says. Airbnb has

more than 7 million listings in

100,000 cities worldwide.

Nearly 1,000 cities have more

than 1,000 Airbnb listings. In

2011, only 12 cities did.

Airbnb has said it was

profitable on a pretax basis in

2018 and 2017, but it didn’t

release specific numbers. The

company said it made ‘‘sub-

stantially more than’’ $1 bil-

lion in revenue in the second

quarter of this year, the sec-

ond time in its history that

quarterly revenue topped $

billion. Airbnb didn’t say

whether it made a quarterly

profit.

Investors may be cautious

after some recent IPO flops.

The ride-hailing companies

Uber and Lyft debuted on the

market earlier this year, but

they continue to lose money

and both are trading well be-

low their IPO prices. WeWork,

which is also racking up big

losses as it opens shared office

spaces, delayed its IPO earlier

this week.

Kathleen Smith, a princi-

pal with Renaissance Capital,

said the difference for Airbnb

could be its profitability. Com-

panies that are struggling in

the markets have had trouble

showing investors a path to

profitability, she said. But the

overall IPO market is per-

forming well. The Renais-

sance Capital IPO investment

fund is tracking 30 percent

higher than the S&P 500 this

year thanks to strong per-

formers like Pinterest and Be-

yond Meat.

Airbnb has spent the last

several years broadening its

offerings in advance of an ex-

pected IPO. To attract guests

who didn’t warm to its couch-

surfer reputation, it added

boutique hotels and special

designations for verified,

high-quality properties. In

2017, it acquired Luxury Re-

treats to boost its high-end of-

ferings.

In May, it bought Hotel To-

night to help guests find last-

minute hotel deals. And last

month it bought Urbandoor,

which offers serviced apart-

ments for business travelers.

ELKUS MANFREDI

An architectural rendering

depicts the redeveloped

courthouse tower.

Airbnbsaysitwill

gopublicin

WALDO SWIEGERS/BLOOMBERG NEWS

Airbnb has spent the last several years broadening its

offerings in advance of an expected IPO.