Having women on corporate boards doesn't make them diverse. 

It's just not enough.

Corporate boards can't really claim gender diversity — that is, gender diversity that works — until they have three women. And there are very few boards out there that meet that standard. 

The Huffington Post's Emily Peck has a new analysis out, which shows that just over 20% of corporations in the Nasdaq 100 meet the three-woman standard.

Peck was prompted to do the analysis after former Quiksilver board member Liz Dolan wrote about her negative experiences as the token woman on that company's board in Fortune Magazine earlier in June.

"What I learned is that even when a woman earns a seat at the table, the men can put you in a soundproof booth," Dolan writes.

Why is three women the standard? Research shows that three is the minimum threshold for women to be seen as directors doing their jobs, rather than just token women who are not to be taken seriously. 

Here's an excerpt from the Harvard Business Review, back in 2006: 

A clear shift occurs when boards have three or more women. At that critical mass, our research shows, women tend to be regarded by other board members not as “female directors” but simply as directors, and they don’t report being isolated or ignored. Three women or more can also change the dynamic on an average-size board. As one woman director said, “The competition to get your voice heard is over. It’s a supportive dynamic—less combative, more collaborative. You can see the guys decompress from their normal very aggressive style.”

Commitment to diversity doesn't stop at one hire. The real takeaway from this HBR piece is that it's really hard for women to contribute much unless their presence is normalized. And the presence of a woman will never be normalized if she is the only one (or even one of a pair) in a room full of (generally white) men.  

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Women may be badly outnumbered in the top ranks of corporate America, but at least they aren't underpaid.

Compensation for female chief financial officers at S&P 500 companies last year outpaced that of their male counterparts, according to an analysis by executive compensation firm Equilar and the Associated Press. It follows a similar trend seen with female CEOs in recent years.

The median pay for female CFOs last year rose nearly 11 percent to $3.32 million. Male CFO pay rose 7 percent, to $3.3 million. This follows several years of steady gains for both sexes.

The gains, for both men and women, are in part a result of the expansion of the CFO role to include far more responsibility and visibility.

"The CFO is no longer a bean counter," said Josh Crist, managing director at executive search firm Crist Kolder Associates.

Companies and shareholders became more focused on financial security and regulation after the financial crisis, and corporate finance began to play a bigger role in company strategy, according to Gregg Passin, a compensation expert at consulting firm Mercer.

Ruth Porat, became one of the most powerful women on Wall Street while helping steer Morgan Stanley, one of the nation's biggest investment banks, through the aftermath of the financial crisis. She topped the list of highest paid female CFOs with her $14.4 million pay package from Morgan Stanley for the 2014 fiscal year.

Google has since lured her away with a pay deal worth $70 million. Investors have warmly welcomed her arrival at Google, where she is expected to bring some financial discipline to what some consider their free-spending ways.

The increased responsibility and visibility has helped some women CFOs rise even further, to CEO. Indra Nooyi, CEO of PepsiCo and Lynn Good, CEO of Duke Energy are both former CFOs.

"It's a unique position that has the ability to contribute to day-to-day operations but also on long-term strategic planning," Good said. She called the CFO position "a critical training ground" for aspiring CEOs.

The other top-paid female CFOs, after Porat, include Marianne Lake of JPMorgan Chase, whose compensation package is valued at $9.1 million, Catherine Lesjak of Hewlett-Packard at $8 million, Sharon McCollam at Best Buy at $7 million and Robin Washington of Gilead Sciences at $6.2 million. This ranking reflects only the companies where the CFOs who have served two consecutive years in their particular position.

To calculate pay, Equilar adds salary, bonus, perks, stock awards, stock option awards and other pay components. To determine what stock and option awards are worth, Equilar uses the value of an award on the day it is granted, as shown in a company's proxy statement.

The high median pay for female CFOs is partly a result of sample size — there were only 60 female CFOs at the S&P 500 companies that qualified for inclusion in the study during the last fiscal year, compared with 437 men, according to Equilar.

It is also a factor in female CEO pay. Median CEO pay for women was $15.9 million last year, according to an analysis done earlier this year by Equilar and the AP, compared with $10.4 million for male CEOs. There were just 17 female CEOs, however.

The small group of women in these important roles tended to be focused at the largest companies, where pay is higher. Crist said that he expects more women to take on CFO duties in years ahead but the pay range will broaden as more women join smaller companies.

He notes that women have historically been underrepresented in finance overall. That is changing, and helping fuel this shift at the top. Younger women are getting better opportunities at entry levels and these lead to better opportunities down the line.

A Crist Kolder study found that the percentage of female CEOs and CFOs has hit an all-time in 2015. Of the 672 Fortune 500 and S&P 500 companies evaluated, nearly 5 percent had female CEOs and 13 percent had female CFOs.

"It's a heck of a trend," he said. "It has been predominantly white male centric forever."

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Everyone's freaking out about a global economic slowdown.

It's a crisis where no one has — or is using — their cash to buy all the stuff we sell to each other around the world.

The thing is, there's a clear solution to this problem!

American corporations, which are sitting on a $1.8 trillion pile of cash they don't know what to do with, need to raise wages, and American consumers need to start spending more money.

You see, what the world is missing is demand. The more people with purchasing power, the more demand we have.

I'm not saying companies should raise wages because it's "fair." Business people hate that word.

I'm saying companies should do it because what they've been doing with their cash — stock buybacks at a record rate— clearly hasn't been doing anything to help kick the economy into the gear it needs to be be in.

I'm saying that companies should raise wages because the global economy — the market itself — is calling for it.

How do I know this? A couple of key things are tipping me off.

Why we need it

Christine Lagarde, head of the International Monetary Fund, has said that global growth will be "disappointing" this year. Countries like Brazil, Nigeria, and South Africa, which used the last decade's commodities boom to turn poor citizens into consumers, are going into deep recessions.

Here in the US, Federal Reserve Chair Janet Yellen has said that she's watching global demand and international markets to figure out whether or not to hike interest rates.

The big tell, though, is China's slowdown and the volatility coming out of that.

The markets have been getting totally rocked by the depreciation of the Chinese yuan. No one explains it as well as economist Michael Pettis. In a recent post on his site, he went through everything that's challenging the Chinese economy. Chief among these issues is debt and overcapacity.

In short, the second-largest economy in the world has a ton of stuff no one wants to buy. Meanwhile, the debt collectors are calling.

What China needs, Pettis argues, is debt-free demand. But "in a world in which demand is likely to remain weak for many years, the external sector is unlikely to provide sufficient additional demand," he wrote.

In plain English: China needs somebody to buy all of its goods.

But it's not just China. All the demand-hungry countries around the world are going to be looking to the US consumer for a bailout. That could set off a dangerous competition to make goods cheap around the world.

From Pettis:

The biggest risk created by the weaker RMB [Chinese yuan], as I see it however, is not a Chinese risk but rather a global one. The rest of the world may view recent Chinese RMB weakness as a signal for a new round of competitive devaluations. I have already said that I expect 2016 to be another bad year for trade, and I am worried that it seems as if every major economy in the world has implicitly decided to use US demand to bail out its own faltering economy. This will very likely derail the US recovery in 2016 or 2017 unless the US, too, decides to step in and intervene in trade. If that happened, of course, the impact on Europe and China would be terrible, but it seems to me a matter purely of logic that if the hard commodity and energy exporters are nearing the limits of their absorption capacity, either the major surplus nations or the US are going to have to absorb a bigger share of the demand deficiency created in Europe, China, and Japan.

With higher wages, the American consumer has more money to spend. It becomes a bigger sponge for all this output.

To be sure, Americans have more money in their pockets due to falling energy prices. The problem is that they're saving it, according to Kathy Jones, Charles Schwab's chief strategist on credit markets. Behavioral economists will tell you that this is because paying less at the pump doesn't make Americans feel like they have more money, so it doesn't change their behavior.

But you know what does make people feel richer, though? A raise, baby.

Why we don't have to just sit around and wait for it

Supply-side economic theory, dating back to French 19th-century economist Jean Baptiste's A Treatise on Political Economy, says that supply creates demand. When a product is made, the cost to make that product — paying workers, investment in production, etc. — creates a market where that product can be sold.

Of course, there are distortions, and economist Pettis explains the one that we're dealing with right now:

[I]nstitutional distortions can force agents into systematic misalignments of supply and demand (mainly by changing incentives for political reasons) that can get very deep and can persist for very long periods.

Basically, something about the incentivization for companies to create products through a process that spurs adequate demand has been distorted. We can argue about how it happened all we want, but the point is that these things don't always just take care of themselves, and the solution in our current case is really just getting more people to spend money.

Do we have to wait for the slog-through of a significant global-economic slowdown to force us into action? Looks like it, unfortunately.

Why we still won't do it anyway

It's not hard to surmise that the government won't be enacting legislation that entices corporate America to raise wages anytime soon. Beside the fact that it's hard to do, 2016 is also an election year, and wages have become a political issue.

Corporations also probably won't do it on their own because, with few exceptions, corporate America has a knee-jerk reaction to what it should do with excess cash. It's automatic if you watch channels like CNBC or Bloomberg TV, or read op-eds in The Wall Street Journal.

"What do you do with excess cash?"

"Return it to shareholders."

This idea has become dogma since the 1980s. Some people even think that companies have a legal requirement to uphold the rights of shareholders over workers or anyone else. That's just untrue.

The real trick is that as the global economy slows down, corporations get more conservative and cut jobs. They don't raise wages despite the fact that a good pay hike would help ignite the global economy.

Companies can put capital to work in the economy in the form of buybacks — mostly what happens — dividends, or whatever you like. But nothing will get the American consumer going like a good old-fashioned raise. It's what the Federal Reserve has had its eye on ever since interest rates went to zero. It's the sign that everything is going to be OK. And wage growth is happening, albeit slowly. It's just that this global slowdown isn't waiting for it.

And we don't have to, either. But we act like we have to wait for wage growth to happen magically. We don't.

Human beings are not just victims of the market — we are actors in it. When we see it moving in an ugly direction, we should do everything we can to push it away. As a country, Americans accept that government has the responsibility to do that — to enact policies that ensure growth. The private sector should also take responsibility for that, though, and not just wait for a market heading to hell to force them to do it. It will ultimately help them anyway.

Be proactive.

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NEW YORK (AP) — Donald Trump's railing about what's wrong in corporate America goes further than the typical political populism: He vows to rewrite trade deals, tax imports and punish U.S. companies. And he's naming names.

He is blasting Ford for beefing up operations abroad. He's refusing to eat Oreo cookies that may soon be made in Mexico and is vowing to get Apple to make iPhones in the U.S.

"You know, our companies are leaving our country rapidly," the GOP front-runner said in Palm Beach, Florida, after winning the state's Republican primary on Tuesday. "And frankly, I'm disgusted."

Politicians and others have long laid into U.S. companies for shifting headquarters and production abroad and for stockpiling cash in foreign subsidiaries. But changing some of the trade and taxes rules behind such corporate moves are beyond the authority of the president and, experts say, are not so easy to do — at least not without big consequences.

Here's a look at Trump's statements on what's ailing big U.S. companies, and his proposed fixes:

Overseas Production

Trump pledged to give up Oreos after Nabisco's parent, Mondelez International, said it would replace nine production lines in Chicago with four in Mexico. He said he would demand that United Technologies reverse a decision to move two of its Carrier heating and ventilating parts plants in Indiana to Mexico, eliminating 2,100 U.S. jobs. He has criticized Ford since last summer after the company said it planned to invest $2.5 billion in engine and transmission plants in Mexico.

Other candidates have criticized the trade deals that facilitate some of these corporate moves, but Trump has gone further. He's threatened to slap a 45 percent tariff on Chinese imports. He's threatened to tax auto parts and other equipment made in Mexico. He also wants to scrap the North American Free Trade Agreement struck with Mexico and Canada in 1994. His view: The U.S. hasn't gotten enough concessions in negotiations, and American jobs have been lost and wages hammered as a result.

"We're being killed on trade — absolutely destroyed," Trump says.

The U.S. has long been open economy, and specific trade deals like NAFTA have not had a major effect on jobs, economists say. The huge wage gap between the U.S. and developing countries and the increasing use of machines to replace workers have had a far bigger impact.

What's more, Trump's threats could throw the international trading system into chaos. Levying tariffs would probably require congressional approval and could set off a tit-for-tat trade war, an ironic development since it's the U.S. that pushed for open trade over the years.

United Technologies declined to comment on Trump's comments. Mondelez said it is investing in U.S. plants, as well as the new one in Mexico, and that Oreos will continue to be made in the U.S. Ford, which employs 6,000 people in Mexico compared to about 80,000 workers in the U.S., said in a statement that it is "deeply invested in the U.S. and has been for more than a century."

Moving headquarters abroad

Trump vowed after his Super Tuesday victories, "we're not going to be losing our companies," if he becomes president. He criticized politicians for not fixing a tax code that he says drives companies abroad and mentioned drugmaker Pfizer, which plans to move its headquarters to Ireland after merging with Allergan, a company based there.

Pfizer's plan is known as a "tax inversion," a maneuver that allows a company to change its tax jurisdiction to a country where rates are lower. U.S.-based companies claim they are at a disadvantage because the U.S. taxes their profits made both in America and in other countries. By contrast, companies based elsewhere generally pay taxes only on profits made in each country where they operate.

Trump has proposed lowering the nominal top corporate rate in the U.S. to 15 percent from its current rate of about 35 percent. Most companies pay less than the top rate because of various credits and deductions. The drug industry, for example, pays a tax rate of about 20 percent, according to experts.

Either way, those rates are far above those in some other countries. Ireland's rate, for example, is 12 percent, according to the Americans for Tax Fairness consumer group.

The Obama administration has tried to slow the pace of inversions by tightening foreign-ownership requirements, but the administration has said that only Congress, not the president, can change the tax code to put an end to practice.

"The movement of company headquarters overseas is a symptom," not the disease, said Mark Vitner, senior economist at Wells Fargo Securities. "The disease is we have an outdated tax code."

Pfizer declined to comment.

Overseas profits

Trump has vented at U.S. lawmakers for not providing corporate America with incentives to bring home more of their enormous and growing amount of cash held abroad.

By the end of last year, the 500 largest U.S. companies had stashed about $2.4 trillion in foreign subsidiaries and bank accounts, according to an analysis of corporate financial statements by the research group Citizens for Tax Justice.

The report estimated that the companies would be facing a collective tax bill of nearly $700 billion if all the money were pulled out of the foreign accounts and brought back to the U.S., or "repatriated."

Trump's frustration is shared by Apple CEO Tim Cook, who lambasted the U.S. tax code as something "made for the industrial age, not the digital age."

"It's awful for America," Cook told "60 Minutes" during an interview aired in December.

As the world's most profitable company, Apple has accumulated by far the largest hoard of foreign cash — $200 billion. That's enough to pay for a new iPhone 6S for more than 300 million people, or nearly the entire U.S. population.

Cook has estimated that Apple would lose about 40 percent, or $80 billion, of its foreign cash to federal and state taxes if all that money were brought back to the U.S. Trump has proposed lowering taxes on repatriated cash to a one-time 10 percent to get companies like Apple to bring more of it home.

David Kotok, chief executive at money management firm Cumberland Advisors, thinks Trump is right about the need overhaul the tax code to stop the shift of cash and headquarters abroad. But he's worried about rewriting trade deals, noting that Americans benefit from, among other things, low prices on goods made abroad.

"When you scrutinize trade agreements, are we really getting killed?" Kotok said. "Do you want to take the price increase and force it on U.S. consumers?"

___

Liedtke reported from San Francisco. AP business writers Dee-Ann Durbin in Detroit and Candice Choi in New York contributed to this report.

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Some of the biggest tech companies today were originally founded in garages and dorm rooms across the country.

A new set of GIFs from the Cove, an office space sharing company, morphs the "then" pictures of tech companies' humble beginnings into their new headquarters of today.

Cove made the GIFs to remind their members many companies that started small have reached great success, explains Kat Haselkorn, a member of Cove's marketing team, to Tech Insider. 

"Even when you're starting small or working remotely there's so much you can do and you can really grow into a huge global brand," she explains.

Check out what some of the world's largest companies looked like when they started out below:

Amazon

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THEN: Jeff Bezos started the online book selling company in his garage outside of Seattle in 1995. 

NOW: Today, Amazon is the largest internet retailer in the country, with its headquarters in Seattle, Washington. 

Apple

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THEN: Three friends — Steve Jobs, Steve Wozniak, and Ronald Wayne — started the company in 1976 in the garage of Jobs' childhood home in Los Altos.

NOW: Apple has grown to be one of the world's largest companies and has revolutionized personal technology. The company's Apple Campus is now based in Cupertino, California.

Facebook

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THEN: Mark Zuckerberg started Facebook in 2004 out of his Harvard dorm room in Cambridge, Massachusetts. 

NOW: Over one billion people now use Facebook. It's headquartered in Menlo Park California. Zuckerberg is still the CEO. 

On Thursday, numerous CEOs including Warren Buffett of Berkshire Hathaway, Mary Barra of General Motors, and Larry Fink of BlackRock all got together and signed a letter listing a bunch of ways to improve corporate governance in America.

JPMorgan CEO Jamie Dimon also signed the letter, which is odd, since the very first suggestion is:

1. Boards of directors should be truly independent from the company and meet without the CEO present on a regular basis.

In an interview with CNBC after the letter was published, Buffett said Dimon was the one who rallied him to the cause about a year ago. And that's weird.

Here's why: Dimon is both the CEO and the chairman of JPMorgan, and that's not an accident. Through the years Dimon has fought hard to maintain complete control of his massive international corporation. That is what makes suggestion No. 1 so very interesting.

Do as I say, not as I do

I think you'll all recall the so-called London Whale, the 2012 JPMorgan trading disaster that blew a $6 billion hole in the bank's balance sheet. Heads rolled, including that of chief investment officer Ina Drew. Dimon was forced to head down to Washington and explain to Congress how one trader could lose so much money in his house.

It was a very public, very embarrassing display of arrogance and mismanagement, and shareholders were rightfully angry. That is why shareholders at JPMorgan's 2013 shareholder meeting took up the unthinkable: They considered whether to split the roles of CEO and chairman of the board at the bank.

Dimon was furious. He threatened to abandon the bank entirely if he lost control of the board.

But he didn't. Dimon went to war, and he won. The Wall Street Journal crowned him on its pages, and a year later he was telling his peers that his reign over JPMorgan would continue for at least five more years.

JPMorgan did not immediately respond to an email requesting comment; this post will be updated if we hear back.

To be sure, Dimon helped JPMorgan through one of the most dangerous times in the history of American capitalism. He has the respect of Wall Street and Washington, and perhaps because of that he thinks of himself as the exception to this new rule he is suggesting.

And maybe he is. But acting above the fray will not instill confidence in his fellow CEOs who may, unlike him, be mere mortals.

Instead, they will be sitting in their C-suites rolling their eyes and thinking, "You first, Jamie."

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Five years ago, I quit my cushy corporate job, which I was actually happy doing, to start my own company.

My business partner and I quit our jobs on the same day and launched ourselves into the wonderfully stressful world of startups.

We took all the advice we could from anywhere we could get it, but what we found most helpful in the end were actually the experiences we had from working in corporate America.

Now, I'm not saying if you've been thinking of starting your own business, you should dive in head first and quit your job tomorrow. But isn't it nice to know you could?

Since I have gone through the late nights, the headaches, and the breakdowns that all come with starting your own business, I thought I'd share my experience.

Now every industry is different, and this list isn't the end-all, be-all of successfully running your own company, but these five tips from my years in corporate America that are certainly helpful to keep in mind when you start your own business.

1. Create a positive value-driven culture

You've heard the phrase before. It's one you hate for its overuse but love for all its meaningful glory: company culture. It's the key to the success of a company. Creating a positive atmosphere and establishing a company with values reflect your own will draw in the right crowd. Establishing your company's mission, purpose, and values early on will help draw in employees that will stick around.

My partner and I call our team a family, and with good reason. We work hard to keep our employees happy, have implemented certain strategies to bring our team closer together, and have seen nothing but positive results from doing so. Think about it this way: If you create an environment where you'd be excited to come into work each day, your employees will feel the same way.

Both my and my partner's previous companies managed to create a familial feel at large corporations, which was something we always appreciated. We knew early on that this was something we wanted to bring to our business.

2. Be proactive, not reactive

One thing that major corporations always do well is knowing when to plan and think ahead. Learning to be proactive rather than reactive is key to preparing for bumps on the road to success.

It's always better to implement a rule or regulation before you need it. Training yourself to be ahead of the curve in order to see issues before they arise will help you develop a plan to prevent problems before they happen, rather than working backwards to try and fix something that's already broken.

If you implement a rule after seeing an issue within your company, your employees may view the rule as a punishment. Instead, seek out possible problems and work to prevent them.

3. Invest in your employees

We put a great deal of effort into hiring the right people. We want our employees here for the long haul, so we seek talent, ambition, and drive. Something we learned from working at big companies was that finding the right people will make your job much easier.

If you commit the time and money into finding employees who share your company's values, they will work hard and support your mission.

Equally important is investing in your team. Our employees know that we have an open-door policy, so they can always come directly to us if they ever have an issue or want to talk about their role in the company. One thing that we found is beneficial from working at a smaller startup is the opportunity it brings every employee.

In our office, we want our team to feel empowered. If there's a position that doesn't exist yet that someone is interested in pursuing, we want to make adjustments to help that employee work where they want. Investing in your employees and their strengths is just as important as hiring the right people.

4. There is always room for change: Learn to adapt

Large corporations often have a hard time adapting to change within their industry. Because the industry we work in moves so quickly and changes all the time, I have found that being able to adapt to change is necessary to keeping up.

Without change, you're always going to be left behind. Large corporations have so many levels that ideas need to pass through in order to implement change. I saw this in my corporate experience and knew that I didn't want this to be an issue when launching my own business. The industry I worked in was so static that nothing ever changed, and that can get old fast.

Learning to be open to change, even welcoming it, may be hard at first, but being able to move things around when needed will make your work much easier. Your employees will also appreciate your willingness to adapt, and your clients will see that you are flexible.

5. Build and maintain real relationships

Networking is the key to finding success with your startup. In any business, you have to be able to sell yourself and relate to people. People always need to like you.

Sometimes people are thrown off by the facelessness of major corporations. Clients want to work with teams they feel comfortable with and not feel intimidated by a powerful corporate name. Having real relationships with real people is necessary for your business to succeed.

Our clients decide to work with us because they genuinely like us and know that our mission is true. They recognize that our passion is real. People want to work with people, not corporations. Working to build and maintain relationships within your industry will yield positive results for both you and your network.

Stephanie Abrams Cartin is the co-founder and CEO of Socialfly, a social media marketing and influencer agency. Stephanie is also the co-author of "Like, Love, Follow," the female entrepreneur’s guide for using social media to grow their business.

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Donald Trump wants to reform America's corporate tax system and give companies a sweeter deal that encourage them to bring profits home, instead of stashing them overseas. 

Once some of this $2.6 trillion is back onshore, it could fuel investment and expansion and hiring and acquisitions in the United States.  

But corporate America may not be interested in sharing its new tax break with the rest of the country.

Instead, Goldman Sachs is predicting that the companies in the S&P 500 Index — the 500 biggest public companies in America — will spend a record amount of money on stock buybacks next year. 

From the report:

In 2017, for only the second time in 20 years, repurchases will account for the largest share of cash use by S&P 500 companies.

Total capital usage will increase by 12% to $2.6 trillion with 52% allocated to investing for growth (capex, R&D, and cash M&A) and 48% to returning to shareholders.

Quick recap: in a stock buyback, companies buy their own shares from the public markets using their own cash. Buybacks serve a specific purpose: they make a company's earnings look better without them having to actually be better. They can — though they haven't much lately — help bolster a company's stock price.

The sacrifice here, though, is that the money spent on buybacks is not being spent on building new factories, raising wages, hiring workers or growing the business. 

Trump's tax plan is to lower the overall corporate rate to 15% from 35%. It will also lower the tax rate on profits stashed overseas to 10%, which can be paid over 10 years. 

The repatriation could lead to a 30% surge in buybacks by the S&P 500 companies, Goldman says. Without tax reform, the increase would be closer to 5%. 

In other words, a fat chunk of the money companies are going to bring home is going to go right back to people who own stocks, which is to say, not to investment in the overall economy and the people who work in it. Simply put, buybacks invest in stock prices, but not in America.

To be fair, we should note that it's not all going to buybacks. Goldman says about half will go to more productive uses — like cash acquisition, research & development, and capital expenditures. These will increase by 5% to 7%, the bank predicts. But repurchases will trump any one of these other uses in terms of size. 

The other thing this tells us

In the wake of Trump's election to President of the United States the stock market has rallied to all-time highs. While some think this is a signal Trump will be great for corporate America, this rush to buybacks tells us a different story.

Buybacks are generally used as a way to invest cash when the economy is uncertain. CEOs don't want to invest in say, a new factory, if they think the economy is about to slow down. They also don't want to just sit on cash and watch inflation erode its value, so they turn to buybacks.

The fact that Goldman says companies are about to spend a ton of money that way next year tells us that they're worried about economic growth and profits.

And they have plenty of reason to worry too. Earnings have been on the decline for years, and next year's outlook isn't much better. Plus, borrowing costs are going up, not just because the Federal Reserve will likely raise interest rates, but also because markets are anticipating that Trump will throw money at a stimulus package, resulting in inflation. His tough stance on trade is also inflationary, according to analysts at Deutsche Bank.

See, one thing is giving corporate America a tax break and saying "have at it." Another thing is creating an economic environment where corporations feel secure enough to invest. Obviously the idea of a Trump presidency, though it has boosted stocks in the extremely near-term, isn't making companies feel secure into 2017. 

Thanks to buybacks, though, that doesn't mean their stocks will go down substantially at the outset. It just means they won't be investing as much in the things that actually make America great — research and development, capital expenditures, and higher wages.

Listen to BI's Linette Lopez and Josh Barro talk Trump trade policy on their podcast, Hard Pass.

SEE ALSO: If Steve Bannon is serious, Trump's infrastructure plan is going to be a disaster

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The stock market has staged a glorious rally since Donald Trump won the US presidential election last month, and analyst after analyst says that it is, in part, because of the promise of a lowered tax rate on corporations.

Trump and House Speaker Paul Ryan (R-WI) both have plans that would lower the corporate tax rate from 35% (where it has been sitting since John F Kennedy was president) to 15% (Trump's plan) or 20% (Ryan's).

This sounds wonderful, but there's some fine print. Not all companies are going to have their taxes lowered.

Depending on a couple factors, some companies could see their tax rate shoot up. One of those companies is former Wall Street darling and current Wall Street headache, Valeant Pharmaceuticals. We'll get to that in a moment. 

Ideologically, Ryan's plan has always intended to ensure that big corporations and small businesses pay the same rate. To do that, he wants to eliminate a bunch of special preferences and loopholes, like enhanced deductions and tax credits, that big companies get in order to pay for the lowered rate.

Trump's plan includes a bunch of the same changes.

You're special

The special preference we're talking about here is the deduction for net interest on future loans. Its existence makes it super attractive for companies to do inversions — that is to say, technically move their residence out of the United States.

Once a company moves, of course, it pays a lower tax rate. Then, quite often, it places its foreign debt into a US held entity. That debt can then be deducted from US profits through the net interest deduction.

The practice is called earnings stripping.

The Senate had a hearing about this last year, and Jim Koch, the founder of Boston Beer Company (they make Sam Adams) explained the debacle really well [emphasis ours]:

It is not uncommon for me to receive visits from investment bankers interested in facilitating the sale or merger of Boston Beer Company to foreign ownership. One of the principal financial benefits of such transaction is the ability to reduce the tax rate we currently pay. We are vulnerable because we currently report all of our income in the United States and pay a tax rate of about 38% on that income.

Under foreign ownership, that rate, I am told, would be reduced to the range of 25-30% through various practices like expatriation of intellectual property,earnings stripping and strategic use of debt, offshoring of services, and transfer pricing.

That means that a dollar of pre-tax earnings is worth about sixty two cents under American ownership but about seventy two cents under foreign ownership. To put it another way, Boston Beer Company is worth 16% more to a foreign owner simply because of the current US corporate tax structure.  

The Obama Administration, after failing to close this loophole through policy, tried to tackle it through the Treasury by creating a rule that classifies a portion of debt held in US companies as equity.

The problem is, Obama's rule will only bring in between between $461 million and $600 million annually from 6,300 companies. That means it collects less than $100,000 per company for only the top 0.01%.

This is chump change. Koch told Congress that "companies are saving millions or even hundreds of million of dollars through complex tax planning every year." 

And more importantly, it's not a solution, especially not if the overall tax rate is going to be lowered by 15%.

"This sets up the possibility that further offsets will be required," wrote analysts at Morgan Stanley in a recent note, "meaning investors who benefit from tax preference items should not be complacent... Consider, for example, that limits on interest deductibility may already be in play, given that limiting interest deductibility is the third largest corporate deduction at $455 billion."

I repeat, this deduction costs us $455 billion.

The Trump/Ryan plan, however, would write the elimination (or at least significant limitation) of this deduction into code. That's where certain kinds of companies will start feeling the pain. The trade off here is that foreign profits wouldn't be taxed at all, removing the incentive for companies to horde cash overseas.

Stripping for cash

So, you may be asking yourself — what kind of company would get crushed by this kind of policy change?

I submit you the multi-billion dollar international drugmaker Valeant Pharmaceuticals. Years ago the company did a corporate inversion by acquiring Canada's Biovail in order to pay a lower tax rate. It also has subsidiaries in Ireland, Luxembourg and Switzerland, which all have lower tax rates. The US, however, remains its largest market.

Over the years, it has used this situation to pay a tax rate of about 4% on its income. It did this, in part, by taking a $16.5 billion loan from its Luxembourg subsidiary and putting it in its US subsidiary.

According to documents viewed by the WSJ, that means the company will save over $560 million over the next five years.

The US government, naturally, has been upset about this. Former CFO Howard Schiller testified at the same hearing as Koch, but unlike Koch, he was on the defensive.

However, former CEO Michael Pearson touted the company's low tax rate as a selling point when the company was making a hostile bid for Allergan. 

"No other potential acquirer of Allergan has the operational and tax synergies that we have,” he said in an October 2014 letter to Allergan, announcing plans to raise its bid. (Allergan eventually slipped through Valeant's fingers.)

This feature of Valeant's business would vanish if the net interest deduction were eliminated. That means  the company — which paid a tax bill of $76.9 million on over $1.5 billion of operating income last year — would see that bill rise substantially. In the same year, Valeant was holding just under $600 million in cash.

This is perilous for a company that has seen its market cap fall from over $40 billion to around $4.6 billion over the last year. Accusations of fraud and drug price gouging have sent investors fleeing from the company, and it's holding over $30 billion in debt. The company's annual report cites that debt (and any reduction in cash flow hampering its ability to pay it) as a risk. 

From the report:

Our ability to satisfy our debt obligations will depend principally upon our future operating performance. As a result, prevailing economic conditions and financial, business and other factors, many of which are beyond our control, may affect our ability to make payments on our  debt.  If  we  do  not  generate  sufficient  cash  flow  to  satisfy our  debt  service  obligations,  we  may  have  to  undertake  alternative  financing  plans,  such  as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital.

Valeant is not the only company that could get hit if the interest deduction is eliminated. There are a number of companies with this structure, including Mylan, the now infamous maker of EpiPen medication.

There's no telling how Congress will handle these companies once new legislation is passed and there's a transitional phase as American companies adjust. It could grandfather the debt that's already in the country and chalk these stripped earnings up to a loss in terms of tax revenue. It could also phase in this debt gradually.

Or, if Congress wants to be petty about this, it can single out companies that have inverted for punishment. Hating inverters is a bipartisan pastime in Washington, so experts tell Business Insider that this is definitely not out of the realm of possibility.

Punishing perceived tax dodgers makes politicians look good to their constituents and could possibly bring in much-needed revenue.

Check out this handy infographic of inverted companies from the Democrats on the House Ways and Means Committee back in 2014.

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• Jamie Dimon says American companies need tax cuts to be competitive.
• They don't. If they did, they wouldn't have so much cash to blow on executive compensation and financial engineering.

Jamie Dimon, the CEO of JPMorgan Chase — the biggest bank in America — needs to stop gaslighting the entire country.

For quarter after quarter — just as he did on Tuesday — he has joined with other CEOs of the Business Roundtable (which is exactly what it sounds like) and insisted that the US tax system is the single biggest disadvantage they face in the global market.

This is nonsense. CEOs like to point out that the corporate tax rate in America is 35%, or "the highest statutory corporate income tax rate among developed nations."

But huge companies like Dimon's JP Morgan don't pay that rate. In fact, from 2008 to 2015 JP Morgan paid an effective tax rate of 15.6% according to research from the Institute of Policy Studies (ISP), a progressive think tank. Thirty-five percent isn't the real story here, and it's not what's stopping multi-national CEOs like Dimon from killing it on the world stage.

Americans can sense this. According to Pew Research 62% of Americans don't think corporations pay their fair share. Gaslighting occurs when one person manipulates another person into questioning their own sanity. That's what's happening here.

Dimon and his fellow CEOs would have us believe that they would do more if they paid less. Before you believe that, though, consider what they do with the system they have.

Sorry, Jamie, but no.

Not only did JP Morgan pay a 15.6% tax rate from 2008-2015, but also during that time the company took $22.2 billion in tax subsidies from the government. That's in the ISP report too.

From 2008-2016 the company laid off almost 27,000 people, during that same period Dimon's compensation hit over $27 million — a 39% pay raise. Now, to be fair, a lot of that compensation is in stock.

On the other hand, to be fair, I should note that JP Morgan bought back $37.8 billion in stock during that period, which had to help Dimon and other executives at the company quite a bit.

What I'm saying here is, it's not as if the company is stretched for cash. It's not as if JP Morgan's US tax burden is making it impossible for the company to do business around the world. If it were, it could've taken some of that cash it used for buybacks — essentially propping up its stock price for investors — and put it somewhere else.

Now, I pick on Dimon even though a bunch of other companies are doing this stuff. A few weeks ago I pointed out that current Secretary of State Rex Tillerson played the same games when he was CEO of Exxon Mobil. 

From 2008-2016, when he was CEO of ExxonMobil, the company paid a rate of 13.6%. It also fired a third of its workers around the world. Meanwhile, it spent $146 billion on stock buybacks and gave Tillerson a 22% pay raise over the period, ultimately paying him $27.4 million in 2016. 

In fact, the ISP was able to find 92 public companies that pay a 20% tax rate because there are a lot of loopholes in the system that allow them to do so.

"Our calculations have revealed that the 92 firms in our sample had median job growth during this period of negative 0.74 percent, compared to the 6 percent job-growth rate of U.S. private sector firms as a whole," said the report. "The 48 tax-avoiding firms in our sample that cut jobs downsized by a combined total of 483,000 positions."

Talking loud

But Dimon is getting picked on today because he is so vocal about fixing America. He likes to talk about policy and the future and economic growth.

Some economists worry that CEOs like him aren't putting their money where their mouths are. Take, for example, a recent survey of execs by  MIT- Boston Consulting Group survey. Almost 85% agreed that artificial intelligence (AI) will give their companies an edge in the future.

However, less than 35% of them have any strategy in place for how to use AI. That means they're not investing in it, they're just kind of dreaming and wondering about it. Apparently, there are competing investment interests and there's pushback from other parts of the business and concerns about security and talent and so forth.

In short, it costs money and it's risky. But isn't managing that correctly what the private sector is supposed to be rewarded for?

Doing nothing

This is an issue that William Lazonick, an economics professor at UMass Lowell, described in his 2012 paper, "The Financialization of the US Corporation: What Has Been Lost, and How Can It Be Regained."

In it, he pointed out that the private sector often calls on the government to invest in innovation rather than using its own cash. Back in 2010 the American Energy Innovation Council — which includes executives from Microsoft, Bank of America, and other massive companies — called on the government to increase its investment in alternative energy from $5 billion to $16 billion annually.

Of course, seven of the companies on the council had spent $228 billion from 2000-2010 on stock buybacks. Combine what Dimon's worried with what corporate America actually uses its cash for and, you'd think that stock buybacks equal competitiveness. They don't. They equal more compensation for executives.

So no. America is not crazy. Corporations are doing just fine. They do not desperately need tax relief. If they did, they wouldn't have cash lying around to pay themselves so richly. Stop gaslighting, Jamie.

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• The South Korean government owns 17% of GM Korea, and may have to reach into its wallet for $1 billion.
• The plant has lost money, with production now down 44%.
• General Motors wants South Korea to give the location tax breaks, in return for over $2 billion of debt to be converted into equity.

It follows the playbook: It started on February 12, when General Motors announced the “first step” in the “necessary restructuring” of its GM Korea unit. It would “cease production” and shut down its factory in Gunsan “by the end of May 2018.” The “next steps” would affect the three remaining plants, whose fate would be decided “by the end of February.”

Here’s the verbalization of the shakedown:

The company has proposed to its key stakeholders — including its labor union, the South Korean Government and key GM Korea shareholders — a concrete plan to stay in the country and turn the business around that requires the full support of all parties. The proposal includes significant product-related investments in South Korea and would preserve thousands of jobs.

The Korean government, via its Korea Development Bank, already owns 17% of GM Korea. But that isn’t enough. Now it’s going to have to pull out its wallet again (GM’s main Chinese partner, SAIC Motor Corp, owns 6%. GM owns 77%).

GM Korea employs about 16,000 people. Many more jobs depend on the industries that support and supply GM Korea’s four manufacturing plants. Some of those secondary and tertiary jobs would be threatened. In total, the four GM Korea plants support about 200,000 jobs, GM says in the press release to make sure the government fully understands the magnitude of the threat.

But GM Korea has been losing money. Production has plunged 44% from 943,000 vehicles in 2007 (when it was still called GM Daewoo) to 524,000 vehicles in 2017. In 2017, GM exported 392,000 of these vehicles to other countries, including the US.

With this announcement, GM had the South Korean government’s attention. The extortion effort has been displayed in the media across the world. So the negotiations commenced and led all the way to the top of the government – in order to make the business profitable, GM President Dan Ammann told Reuters, adding, “Time is short and everyone must move with urgency.”

In other words, how much money would the Korean government be willing to pay directly via a cash infusion and indirectly via tax deals?

Now apparently a deal is being worked out, according to Reuters based on what “four sources with direct knowledge of the matter” had said who didn’t want to be named “due to the sensitivity of the subject” – because all this is carried out at all levels, including leaks to the media. Here are some elements of the deal that emerged today:

• GM wants $1 billion from the government to recapitalize GM Korea.
• GM wants its GM Korea sites designated as special foreign investment zones to make GM Korea eligible for tax breaks for seven years.
• In return, GM offered to convert $2.2 billion of troubled GM Korea’s debt into equity.

And this is wandering up the political pyramid.

Today, Barry Engle, GM executive VP and president of GM International, discussed the restructuring and aid package with a government task force headed by a ruling party lawmaker from Bupyeong, where GM Korea largest plant is located. The threat in GM’s announcement was that the fate of this plant would have to be decided “by the end of February.”

Engle told Reuters that he’s “encouraged by the discussions” and is “optimistic” that “an outcome” can be achieved that would keep GM in Korea. As Reuters puts it, “He declined to comment further on the discussions between GM and the South Korean government.”

But the government is talking, according to Reuters:

Kim Sung-tae, a South Korean lawmaker, said Engle had told lawmakers that GM Korea planned to produce two new models.

Kang Hoon-sik, a spokesperson for the ruling party, told reporters that Engle said that GM Korea would try to maintain production of around 500,000 vehicles a year.

Finance Minister Kim Dong-yeon told reporters today that the government would “closely consult with GM to normalize its management,” and that thorough due diligence on the company should come first before a decision is made on financial backing.

The presidential office of South Korea said today that it would designate Gunsan an employment “crisis zone.” This would allow the government to offer laid-off workers some financial support, such as cheap loans.

Officials at the Korea Development Bank (which already owns 17% of GM Korea) complained that GM Korea has not shared sufficient information about its finances or the cause of its losses.

A government official who didn’t want to be named told Reuters, “They have requested for help, and a thorough audit of the situation is among many preconditions before any public funds can be set aside.”

Unnamed government officials said today that financial support to GM Korea will depend on GM’s willingness to commit to new investment in the remaining operations.

An unnamed government official said that GM hasn’t filed an official application to get the GM Korea sites designated as foreign investment zones, but it was “testing waters” to check the possibility.

[Update Feb 21: Trade Minister Paik Un-gyu told lawmakers that the government has asked for an audit into GM’s “opaque” management in Korea, Reuters reported. “By opaque we mean the high rate of profits to raw material costs, interest payments regarding loans and unfair financial support made to GM’s headquarters,” said Paik Un-gyu, adding that taxpayers’ money would not be wasted in government efforts to deal with the GM issue.]

GM wants to lower its costs in South Korea to get to “a viable cost structure,” as GM President Ammann put it. These cost reductions are going to be obtained from various “stakeholders,” including largely the Korean taxpayer.

GM is going to produce its vehicles somewhere. It’s just a matter of where it can do so at the lowest cost, including the greatest amount of subsidies. Over the years, GM has used this tactic to offshore much of its manufacturing operations from the US.

This is the same extortion principle that large corporations use with municipalities, states, provinces, and countries around the world, either to locate to those locations, or if they’re already there, to not close their shop. It’s a well-oiled machine that works – with taxpayers, who have no say whatsoever in this, always footing the bill.

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• Corporate America has a real problem with short-termism.
• JPMorgan CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett's solution is to get rid of guidance, which would eliminate transparency and put companies at risk.
• Their solution also treats CEOs like a bunch of babies with no self control. 
• Do better.

In a Wall Street Journal oped out Thursday, JPMorgan CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett suggested earnings guidance should be eliminated. They reasoned the reports incentivize CEOs to think too short term in an effort to constantly beat Wall Street's expectations.

"I've been on 20 boards of publicly owned companies, not counting Berkshire's, and I have seen managements that I really think well of personally," Buffett told CNBC Thursday. "I'd be glad if they married my daughter or were named as executors of my will or moved in next door. But they get tempted by the predictions that have been made. Their ego gets involved. And when they find they can't make the numbers, sometimes they make up the numbers."

How awful it must be for them. Being a CEO is hard, but it should be. They make a lot of money.

So let's talk about solving this very real problem with short-term thinking another way — a way that makes more sense for shareholders interested in transparency and good corporate governance.

Instead of eliminating transparency, how about we reward CEOs for thinking long term? How about we teach people in business school that corporations are not just shareholders, but also employees and customers and communities? How about we change their payment packages to incentivize longer-term thinking?

How about we expect CEOs to act like stewards instead of treating them like infants with no self control?

Buffett and Dimon want to take away temptation, but what they're proposing does nothing to solve our real, deep rooted problem with short-termism. That goes back to how CEOs are trained to think of companies from business school til the end of their careers — it has to do with who they think matters, and who they don't think about at all.

Seriously, fire whoever came up with this

First things first: If you want CEOs to think long term, you should allocate stock-option awards around long-term performance and put some real clawbacks in place.

Some real consequences may have made JPMorgan more vigilant during one of its most recent scandals that had nothing whatsoever to do with guidance — the $6.2 billion loss the bank experienced in 2012 because of the rogue 'London Whale' trader. Dimon got a slap on the wrist for that foible. There were no real consequences, and it certainly hurt shareholders.

But I digress.

The relentless drive to beat guidance (and earnings) quarter after quarter is just a symptom of a greater problem with shareholder primacy. In the 1970s, thanks to economic scarcity and some imaginative economists in Chicago, Americans started telling themselves the most important part of a company was its shareholders — and basically, only its shareholders.

Noted economist Milton Friedman wrote in The New York Times Magazine in 1970 that a corporation's only "social responsibility of business ... [is] to increase its profits" for shareholders who "own" the corporation.

And that means the stock price has to stay up by any means necessary, no matter what it does to your employees, your community or your customers (see: Wells Fargo... or Facebook).

"The purpose of corporations used to be to innovate, creating universities, building railroads, designing self-driving cars, and looking into commercial space transport," Lynn Stout, a professor at Cornell Law School and the author of "The Shareholder Value Myth," said in an interview with Marketplace in 2016. "These are really big long-term projects ... and what corporations are supposed to do."

And they used to do that, and believed that they should. In the first half of the last century, two professors, Adolph Berle of Columbia University and Merrick Dodd of Harvard Law, duked it out over whether companies lived for shareholders. Berle took the side of shareholders, and Dodd took a more holistic approach.

"The business corporation," Dodd said in a 1932 issue of the Harvard Law Review, is "an economic institution which has a social service as well as a profit-making function."

In other words, Dodd argued that corporations are supposed to enrich the economy, provide workers with a decent wage and purchasing power, and create high-quality products. This was known as the "managerialist view," and it basically won out through the 1960s. Even Berle eventually capitulated.

If you think of corporations that way — in a way that gives it a greater purpose in American society — you solve the problem Dimon and Buffett are talking about without sacrificing transparency. Stock price, you may be surprised to hear on a business publication, is just one metric by which we can judge a company. 

If shareholders are not the most important thing in the world, you will spend money on longer-term projects that build your customer base or keep your employees healthy and happy. We should be teaching that at business schools, we should be talking about it on CNBC, and in the pages of the Wall Street Journal.

We should not be treating grown adults like babies.

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• Martin Whittaker, PhD, is CEO of JUST Capital, a nonprofit that measures and ranks the performance of U.S. companies on the issues Americans care about most.
• Over four years, JUST Capital has surveyed more than 81,000 Americans about their top priorities when it comes to U.S. corporations and how a ‘just company’ should be defined.
• From the results, there is no doubt that Americans have a growing belief that companies can and should be a force for greater good, Whittaker writes.
• Americans across the board want to see improved worker pay and treatment at the heart of business practices, the surveys found.
• This article is part of Business Insider's ongoing series on Better Capitalism.

With the midterms behind us, America still has a lot of work to do to heal our divisions. According to a survey released by the Associated Press ahead of election day, large majorities of Americans are convinced that lawmakers care more about their donors and lobbyists than the views of their own constituents.

Regardless of the party in power, political cynicism, rancor, and disconnection is soaring. It is not surprising that an increasing number of Americans are searching for new sources of democratic expression and moral leadership to fill the void. And they may be finding it in the unlikeliest of places: corporate America.

Over the last four years, more than 81,000 Americans, on a fully representative basis, have taken part in annual surveys conducted by JUST Capital, in partnership with NORC at the University of Chicago, answering detailed questions about their top priorities when it comes to U.S. corporations and how a ‘just company’ — one that does right by all its stakeholders — should be defined.

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It is some of the most exhaustive polling work ever undertaken on the relationship between Main Street and Corporate America, and strikes to the core of the purpose of business in the 21^st Century. The results are good news for all those who believe we have more that unites us than divides us.

First of all, there is no doubt that Americans have a growing belief that companies can and should be a force for greater good, and that they believe in the power of their vote. Fully 79% of respondents believe that people can be effective in influencing corporate change when they work together, and 63% say that CEOs have a responsibility to take a stance on important social issues.

This is not simply empty rhetoric. Seventy-eight percent said that they had already taken action (like purchasing products, applying for jobs, or investing) to show their support for a company’s positive behavior, and 76% of working Americans say that when considering accepting a job, they would opt to work at a more just company, even if it paid less. Surprisingly, the majority of Americans share this view, regardless of respondent demographic and economic status.

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Perhaps most encouraging is the fact that Americans are in almost complete harmony on precisely what issues they want companies to prioritize, and their order of importance. Across all demographics we looked at — liberal, conservative, high-income, low-income, men, women, millennials, and boomers — Americans want to see improved worker pay and treatment at the heart of business practices.

This has been consistently the case for each of the last four years we surveyed the American public. And it is brought to life this year by the fact that, when we asked respondents for the one message ­— on any topic ­— they would like to send to the CEOs of America’s largest companies, roughly 1,500 of the nearly 3,000 messages we received focused on investing in workers.

“Value your employees. It’s not all about the dollar,” said a White female Republican, 30, from Virginia.

“Treat your workers well. They ARE the company,” said a Black female Democrat, 45, from Maryland.

"Look out for all your employees. They create the backbone and heart of your company," said a Hispanic male Republican, 47, from California.

Make no mistake, not everything in the garden is rosy. Over 80% of Americans said that companies do not share enough of their success with employees, and 38% of those polled believe the behavior of companies is going in the wrong direction. But even here, the trend is positive. Last year’s ‘wrong direction’ response rate was 47%, and from 2017 to 2018, the percentage of Americans who perceived employees as the top priority for corporations more than doubled — from 9% to 20%.

The voice of the American people is reverberating not just in Washington, but also in business. Markets allow people to vote every day, with their wallets, their talents, and their energies, and more and more of us are doing so in ways that align with our values. Good corporate leaders in America already know this. Marc Benioff of Salesforce routinely refers to corporations as platforms for change and many companies are quietly leading the charge, seeing better financial performance as a result.

Martin Whittaker, PhD, is CEO of JUST Capital, a nonprofit that measures and ranks the performance of U.S. companies on the issues Americans care about most.

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• Investors who sit outside the traditional banking sector, some of whom are "quite bright," are "going to get hurt" when the corporate credit cycle turns, according to JPMorgan CEO Jamie Dimon.
• The regulated banking system has much less exposure to the types of leveraged lending that drove billions of dollars in losses during the financial crisis, Dimon said.
• The CEO was speaking on the bank's fourth-quarter conference call after reporting results that missed analyst estimates.

The firms that lurk outside the traditional banking system, known as shadow banks, are first in line for pain when the leveraged-lending cycle eventually turns, according to JPMorgan CEO Jamie Dimon.

Compared to the traditional banking sector, "shadow banks, they do things differently," Dimon said. Dimon was responding to multiple questions from analysts on the firm's fourth-quarter earnings call on Tuesday about its exposure to a corporate-loan market that has shown signs of cracking.

Dimon, the head of the largest US bank and a huge lender to corporations, shrugged off any concern about the traditional banking system. He ticked off a list of reasons why the industry will be more immune to losses than it was in the depths of the financial crisis: Senior lenders have more loss protection from other investors lower down the payment waterfall, more flexibility in the deals, and higher capital levels, Dimon said.

Not so for other market players, such as collateralized-loan managers, he said.

"A lot of those folks are — they're quite bright, they kind of know what they're doing — someone's going to get hurt there," Dimon said.

Investors have started looking for causes of the next financial crisis, and leveraged lending is one of its biggest worries. Companies have gotten bloated with cheap debt in the years following the crisis, with low interest rates and yield-hungry investors spurring "covenant-lite" loans to become more commonplace in the market. That's led former Federal Reserve Chair Janet Yellen, the Bank of England, and the Fed, among others, to criticize the market.

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There's about $1.6 trillion in leveraged loans outstanding globally. Investors have grown concerned about the market in recent months, with about $13 billion flowing out of funds tracking the space during the last six weeks of 2018. They're worried, in part, about weakened underwriting standards.

The US government's leveraged-lending guidance, from 2013, capped leverage at six times to avoid excessive risk-taking, but it's now a regular occurrence to see leveraged buyouts at higher leverage levels. For context, nearly 13% of leveraged buyouts in the first nine months of 2018 were financed with debt equating to at least seven times the target company's earnings before interest, taxes, depreciation, and amortization — or EBITDA — according to S&P Global Market Intelligence's LCD.

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For example, KKR's $5.5 billion buyout of Envision Healthcare through a debt financing was one of the largest deals in 2018 and was up to seven times levered. Similarly, a $13.5 billion deal by Blackstone to purchase a 55% stake in Thompson Reuters' financial-data service, now known as Refinitiv, was the largest leveraged buyout since the financial crisis.

Dimon said he's not worried about the largest banks because they tend to invest in the safest part of the market, a category that accounts for about half of all outstanding leveraged loans. Shadow banks hold about 60% to 70% of the more risky part of the market, Dimon said.

And before investors start worrying about banks' indirect exposure to the shadow banks, either through warehouse lines or implicit guarantees, Dimon said there's a lot less of that this time around.

"Remember, most of the major banks don't fund a lot of that," Dimon said. "We aren't taking huge indirect exposure debt by funding some of the nonbanks."

Banks have a fraction of the exposure in their leveraged-lending bridge books, he said, citing figures to suggest it's now about $80 billion, or about one-fifth of the more than $400 billion held by the industry in 2007 when lenders got stuck with loans they couldn't sell and suffered losses.

JPMorgan did show a fourth-quarter increase in the number of loans it was trying to sell. The amount of wholesale loans JPMorgan is holding for sale, a proxy for things like leveraged bridge loans that the bank hasn't yet sold to investors, increased to $15 billion at year-end 2018, compared to $5.6 billion in 2017, according to company materials.

Dimon and Chief Financial Officer Marianne Lake assured analysts that the uptick wasn't a sign that it was becoming harder to sell the loans into the market.

That said, Dimon made clear that he's under no illusion that banks will emerge unscathed from the next recession.

"You will have a recession, it just won't be like you had the last time," Dimon said. "We're a bit canaries in the coal mines. We're not immune to what goes on in the economy, and it won't be anything like you saw last time for much of the large banks."

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• Executives across different sectors of the US economy weighed in with their 2019 outlooks in a new UBS survey.
• The biannual survey of 500 corporations took executives' pulse to gauge expectations on what's driving profits, where they're allocating capital, and the impact they are seeing from policy changes.
• Respondents identified rising costs as a possible threat to profitability this year. Smaller firms, specifically, were most concerned about taxes and labor costs.
• Still, executives were overwhelmingly positive on growth this year. 
• The survey was conducted in the fourth-quarter, a brutal time for financial markets, and was distributed to clients on Wednesday.

In the final months of last year, during one of the S&P 500's worst fourth-quarters on record, executives sounded off on their 2019 outlooks in a biannual survey conducted by UBS.

The results, distributed on Wednesday, paint an uneven portrait of what the CEOs and CFOs at 500 US corporations are expecting for their businesses this year.

While the outlook for growth has remained robust since the prior survey was conducted in May, cost concerns as a possible threat to profitability rose among executives as interest rates were perceived to be less accommodative. Smaller firms were the "most worried" about taxes and labor costs.

In other words, executives became less optimistic about underlying profitability factors like the costs associated with labor, raw materials, commodities, and taxes. The chart below shows the differences between executives' most recent responses compared to the prior survey.

"While broad sales and margin expectations were more positive vs. May, expectations were actually less positive for the detailed drivers of profits with a decline in net positive responses for each of the 7 drivers," the firm's equity strategists wrote. "This suggests more mixed results for '19."

The results come a little more than halfway through the current corporate earnings season, which so far has proved lackluster.

"EPS growth rates are expected to freefall between 3Q18 and 1Q19," Credit Suisse strategists told clients this week, pointing specifically to a tepid 1.6% earnings growth rate (excluding tax impacts) for S&P 500 companies.

And Credit Suisse isn't the only one worried about a slowdown. FactSet projects S&P 500 earnings will fall 0.8% year-over-year drop during the first quarter.

Still, UBS said executives reported "continued confidence" in earnings growth for this year, with 68% expecting profit margins to expand. That's up from 64% in the May survey. 

Read more:Forget earnings season — Wall Street has already moved on, and investing experts are watching these 3 catalysts instead

"Strength in customer demand and pricing power are still the key reasons behind the continued optimism, while concerns around cost drivers, including tariffs, have risen," strategists Keith Parker and Neal Burk wrote.

More granularly, executives' sales- and profit-growth expectations were strongest among financial and technology firms. Healthcare, meanwhile, reported the weakest margin expectations of all the sectors, along with below average sales expectations.

In the way of how executives are deploying capital, merger and acquisition activity, and capital expenditures were the lowest priorities among executives, while reducing debt and/or raising cash were the highest.

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• A strategist at $1 trillion Edward Jones explains why the stock market's recent meltdown was the best possible thing for it — and reveals where you should put your money
• The US trade deficit tumbled to a 5-month low in November

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• Business Insider is planning to publish a list of the top PR experts in crisis management, and we want your nominations.
• We want to hear who are the practitioners and firms on executives and companies' speed dials when they're facing reputational damage, crises, or other difficult situations.
• Submit your nominations through the form here or below by February 14.
• Visit BI's homepage for more stories.

When heavily funded WeWork was on the brink of running out of money last year, the coworking space company hired PR firms including Publicis-owned Kekstto help out.

And that's just one recent prominent example. Crises can hit any company for any number of reasons, and today, bad news can travel around the world in a flash. And with customers' expectations of companies rising, the stakes are higher than ever.

That's where experts come in to help companies and public figures get ahead of and diffuse difficult situations.

Business Insider is planning to publish a list of the top PR experts in crisis management, and we're looking for your nominations here.

We want to hear who are the practitioners and firms on executives and companies' speed dials when they're facing reputational damage, crises, or other situations.

We'll base the list on the nominations we get and our own reporting. It will reflect factors like the caliber of clients represented, size of the crisis management practice and its growth, and the results delivered for clients.

You can also check out our recent list of the 16 rising stars inside top PR agencies.

Submit your nominations for top crisis PR experts here or through the form below by February 14. We plan to publish the list later in February.

Join the conversation about this story »

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• Three black entrepreneurs and professionals with ties to the fashion industry spoke to Business Insider about Prada's settlement with the New York City Commission on Human Rights. 
• As part of the settlement, the commission instructed Prada to work toward diversifying its workforce, in addition to mandating that Prada's Milan-based executives and New York-based employees undergo sensitive and "racial equity" training, The New York Times' Vanessa Friedman reported.
• Stylist and fashion editor Mecca James-Williams told Business Insider that the black community still "need[s] these acts of non-discrimination" in order to ensure they're treated fairly in work environments.
• In addition, entrepreneur, social activist, and Uber Head of Strategy & Leadership Meena Harris said that brands need to prioritize being more inclusive and culturally aware.
• Meanwhile, former Vogue Digital Marketing & Sales Planner Shelby Ivey Christie questioned whether Prada will diversify its executive branch, or if they will only diversify lower-to-mid-level positions.
• Visit Business Insider's homepage for more stories.

In January 2019, civil rights lawyer Chinyere Eziefiled a complaint with the New York City Commission on Human Rights regarding Prada's Pradamalia figurines, which she said resembled the racist blackface caricature Little Black Sambo. On February 4, Vanessa Friedman of The New York Times reported that Prada had reached a settlement.

The commission agreed with Ezie, and as part of the settlement, Prada will appoint a diversity and inclusion officer at a director level, while all New York-based employees will have to undergo sensitivity and "racial equity" training, according to Friedman at the Times. Prada's Milan-based executives will also undergo training, since the commission determined that decisions made at Prada headquarters in Italy have repercussions in the United States. 

The brand also established a Diversity and Inclusion Advisory Council, which, per the terms of the agreement, is required to last for at least six years. The council is co-chaired by Ava DuVernay, and its creation was announced in February 2019, shortly after the Pradamalia controversy arose.

This settlement has made waves in the industry and is one of the first major examples of a government intervening in fashion — luxury houses, at least, are typically left to police themselves. Importantly, this settlement has the ability to set a precedent in terms of what might happen to other luxe brands that find themselves embroiled in race-based controversies.

Speaking with Business Insider, three black professionals, entrepreneurs, and fashion gurus gave their thoughts on the Prada settlement and discussed what changes they hope it brings to the luxury sector at large — and why government oversight is still sorely needed in corporate spaces. 

"It's gotten to a point where it has to be [this] way"

Shelby Ivey Christie, former digital marketing and sales planner at Vogue, has worked in corporate fashion for most of her professional life. She told Business Insider that it was "unfortunate" that the government had to step in and tell Prada to diversify their workforce, but that "it has to be that way." 

"That itself speaks to a gaping hole in the industry — that a government agency had to step in and say 'Hey, you need to address this and we have to impose rules and regulations for you to address this,'" she said. "Do I think it should be that way? No. But my goodness, it's gotten to a point where it has to be that way."

Ultimately, Christie hopes that people of color benefit from the Prada settlement — but she is wary of not only what type of working environment these new hires will be heading into, but what positions they will actually hold.

She fears that the new hires will simply be viewed as "diversity hires" brought on to appease a settlement, and that they will be placed and stagnated in lower-to-mid-level ranks in the company, rather than in leadership positions where their voices can have equity.  

"Are they going into an environment like affirmative action, where everyone's treating them like [they're] only here because this agency came in and told us you have to be here?" she said. "[And] what is the level of diversity? Is it going to be entry-level and mid-level, or is it really going to be bringing someone in who will have decision-making [abilities]?"

Christie also noted that settlements shouldn't be the reason people hire diversity in the first place and that bringing in a chief diversity officer — or, in Prada's case, a diversity and inclusion officer — shouldn't just be implemented as a strategy to "mitigate bad press." 

"The culture inside of the company is going to have to be addressed so that [new talent are] going into a workplace where they're really being received and treated as valued members of the team," she said. "Can fashion begin to hire black talent and POC talent proactively instead of as a reaction to some kind of crisis?"

"Racial equity training is not enough"

Meena Harris— who is Uber's head of strategy and leadership, in addition to being a social activist and the founder of the Phenomenal Woman Action Campaign, a non-profit that sells merch to support causes for women of color — pointed out that brands such as Prada and Gucci have been warned before about selling racially insensitive products. In 2019, Gucci was embroiled in a similar controversy and eventually pulled a sweater that many said resembled "blackface."

Harris said that continuous missteps with fashion brands show that the industry is not "prioritizing" being culturally aware, and that it was "unfortunate" Prada needed government intervention in order to become more diverse and inclusive. 

"I think about the fact that if we did not have these things like the Human Rights commission —  and [a commission] that is active enough and has enough power to [implement changes] — then what would happen?" Harris said. "Racial equity training is not enough ... it's about making sure that you are bringing in a multitude of perspectives — and diverse perspectives — to inform the work that you do."

Harris echoed Christie's thoughts that brands need to make more of a commitment toward enacting change, and added that a lack of cultural awareness is no longer acceptable. 

"Adding more black models is not enough," Harris said. "And once these folks are actually at the table, they can't just be table dressing. They need to have decision-making authority. There must be a culture of inclusivity where they feel comfortable to speak up, to voice concerns, and perhaps even rock the boat when necessary."

"We need these acts of non-discrimination"

Mecca James-Williams, a stylist and style editor at The Zoe Report, said that companies need to take responsibility for the choices they make and that settlements and laws like these let them know that certain types of behavior are no longer acceptable. 

"You're setting a standard and you're starting a conversation," she said. "I do think outside of laws, there has to be an ethics committee, a culture committee that really can educate different [people], because we all come from different walks of life. We all have different cultural boundaries that other cultures don't understand. So I think there has to be ethics involved with the law."

James-Williams also addressed concerns, such as those voiced in Friedman's New York Times report, that governments shouldn't have the ability to impede upon "freedom of expression" in the fashion industry. James-James-Williams acknowledged that allowing governments to say what is and what isn't a proper manner of expression can be a "double-edged sword" for an industry that prides itself on creative expression.

Sometimes, however, that's necessary. 

"[Black people] need these acts of non-discrimination," she said. "We need them or we'll be stifled completely."

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• Racism and diversity are gaining renewed focus after recent protests over the death of George Floyd.
• Corporate America has long struggled with diversity, particularly in the C-suite. There are currently only four Black CEOs of Fortune 500 companies, and none of them are women. 
• The four black CEOs are: Kenneth Frazier of pharmaceutical company Merck & Co., Marvin Ellison of home improvement retailer Lowe's, Jide Zeitlin of fashion holding company Tapestry, and Roger Ferguson, Jr. of insurance company TIAA.
• Meanwhile, only two black women have ever led an S&P 500 company: Ursula Burns, CEO of Xerox from 2009 to 2016, and Mary Winston, the interim CEO of Bed Bath & Beyond for six months in 2019. 
• Visit Business Insider's homepage for more stories.

The recent protests sparked by the death of George Floyd has brought attention to the many other structures of systemic racism within the United States. Corporate America, for example, has long struggled with racial discrimination and diversity problems — evident in the facts that there are only four Black CEOs at Fortune 500 companies, and that none of them are women. 

In fact, only two Black women have ever led a Fortune 500 company. The first was Ursula Burns, who served as CEO of Xerox from 2009 until 2016, and as chairwoman from 2010 to 2017.

The second Black woman on the list was Mary Winston who, in May 2019, became the interim CEO of Bed Bath & Beyond. She only held the position until November of that year, when she was replaced by Mark Tritton, a white man.

The four Black men currently leading Fortune 500 companies are Kenneth Frazier of pharmaceutical company Merck & Co., Marvin Ellison of home improvement retailer Lowe's, Jide Zeitlin of fashion holding company Tapestry, and Roger Ferguson, Jr. of insurance company TIAA. This number is down from seven, reported less than a decade earlier.

The Center for Talent Innovation's "Being Black in Corporate America" report, released in late 2018, found that Black people account for only 3.2% of senior leadership roles at large corporations, and hold just 0.8% of Fortune 500 CEO positions. The study also found an overall lack of mentorship and access to senior leaders.

Keep scrolling to learn about the four Black men currently at the top of the corporate ranks.

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Roger Ferguson Jr.

Company: TIAA (Teachers Insurance and Annuity Association of America).

Year appointed: 2008

Before joining TIAA in April 2008, Ferguson was head of Swiss Re, an insurance company. From 1984 to 1997, he was also an Associate and Partner at the prestigious consulting firm McKinsey. Ferguson was also previously vice chairman of the Board of Governors of the US Federal Reserve System.

Source: TIAA

Kenneth Frazier

Company:Merck & Co., a pharmaceutical company

Year appointed: 2011

Frazier joined Merck & Co. in 1992, and various positions, including general counsel and president. Before joining the company, he had been a partner with Drinker Biddle & Reath, a Philadelphia-based law firm. 

Source: Merck

Marvin Ellison

Company: Lowe's, a retail home improvement store 

Year appointed: 2018

As Áine Cain of Business Insider previously reported, Ellison started his career as a part-time security guard at a Target in Memphis, earning $4.35 an hour. He spent 15 years rising through the ranks, and moved to Home Depot in 2002, ultimately being promoted to executive vice president of US stores in 2008. He held that position until until he became the CEO of JC Penney in 2015. In 2018, he became CEO of Lowe's.

Source:Business Insider

Jide Zeitlin

Company:Tapestry, a luxury fashion holding company that owns Coach New York, Kate Spade New York, and Stuart Weitzman

Year appointed: 2019

Zeitlin is also the founder of private investment firm Keffi Group, which he founded in 2006. Before that, he spent 20 years working at Goldman Sachs, where he held various positions, including global chief operating officer of the investment banking businesses. In 2006, Zeitlin was elected to Tapestry's board of directors, and he has been chairman of the board since 2014. 

Source:Tapestry

• If our government doesn't act now to prevent it, corporate America will swallow our country's small businesses whole when the coronavirus pandemic is over.
• We saw that happen during the financial crisis. The banks that survived were the big banks, which got even bigger, and now we have less competition in the banking industry.
• The $349 billion in government aid to small businesses Congress passed last week is being given out on a first come first served basis, which favors businesses with accountants and lawyers who can advise on the process. 
• Finally, protecting small businesses means not only giving them money now, but also blocking anti-competitive mergers and acquisitions when this is over.
• This is an opinion column. The thoughts expressed are those of the author.
• Visit Business Insider's homepage for more stories.

Let me remind you what happened during the financial crisis as our banking system started swirling down the drain.

Not just small banks went bust, but also big brand names like Washington Mutual and Bear Stearns. Banks of all sizes were swallowed by even bigger banks — which got huge — and now instead of having 14,500 banks like we did in the 1980s, we now have around 5,500.

This is story of consolidation and near-monopoly building, and if we aren't careful, after the coronavirus pandemic it could happen all over the economy.

Small- and medium-sized retailers could get swallowed by Amazon and Walmart — companies that have the resources and cushion to get through disaster. Pharmacies will continue to get devoured by CVS and (to a lesser extent) Walgreens. According to US Chamber of Commerce poll, one in four small businesses says that they're two months or less away from closing forever.

This isn't the way capitalism is supposed to work. We're supposed to have competition and choice. And in a perfect world, that problem would fix itself in the market. But this isn't a perfect world in the best of times. And a perfect world certainly wouldn't include the coronavirus.

On Friday the government started disbursing $349 billion in aid for small businesses. Basically the deal is the government will loan you payroll for you for a few months. If you don't fire people, that loan turns into a grant — basically a cash infusion like the $1,200 check a majority of American households are getting.

But there are already problems. Right before the program was about to roll out, JPMorgan — the most giant of all the giant banks that won the financial crisis — admitted that it simply wasn't ready to process and service these loans. And if the house of Morgan was having problems, it's not hard to imagine everyone else was having them as well.

On Friday the program opened to a chaotic first day, according to reports.Bank of America said that by mid-day, 58,000 businesses had asked for $6 billion in loans.

These loans are being given out on a first-come, first-served basis, which means the companies with the time and resources — meaning accountants and lawyers — to understand how to apply will get their first. Smaller businesses with fewer employees will have a harder time. It's also likely that they'll have less time to wait before things go south than bigger companies too.

All that said, this bill is just where the work starts. After the pandemic is over policymakers will need to consider how to keep small business that may be still struggling from getting consumed by big businesses that have recovered faster.

A fighting chance

What this means is what I've been advocating from the beginning — more money for small businesses faster— but that's just part of the story.

Once the dust settles companies that had to wait longer for money, or are located in parts of the country hardest hit by the pandemic, will be weaker. And that will undoubtedly give big corporations that want to get bigger the opportunity to pounce.

We could argue about this until the cows come home, but there are obvious parts of our economy where corporate consolidation has led to poorer outcomes for customers.

The airline industry is the perfect example. 20 years ago there were around 10 major carriers. Now there are four. These mergers were supposed to making things more efficient, but what they've really done is left customers with fewer choices, forcing them to put up with mediocre service and borderline collusive fee increases. 

At the same time, as you've probably heard, instead of using their money and power to invest in improving their services, the four airlines that remained mostly bought back their own stock to made their shareholders (and consequently their executives) richer.

Consolidation has made it harder to fight the coronavirus too. This week the New York Times reported the story of the US government's failed attempt to building a cheaper, easier-to-use ventilator to build its stockpile.

It started back in 2006, when the government hired California-based Newport Medical Instruments to build a better ventilator. The effort stalled when a larger competitor, Covidien, bought Newport in 2012 and scrapped the project. Covidien claimed the US was asking too much, but it's more likely they simply didn't want to make a product that competed with the more lucrative ventilator it already had in the market.

The US has the tools to block anti-competitive mergers like this, we just haven't sharpened or used them in decades. It's one of the reasons why companies like Facebook and Google have gotten so big.

This issue was already starting to gain steam in Washington because of anger at the tech giants coming from both sides of the aisle.

Now, in the face of coronavirus, it's even more important that we use antitrust regulation to protect not just individual small businesses, but also the existence of competition in our markets entirely.

Join the conversation about this story »

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• The only four black CEOs of Fortune 500 companies have each addressed the recent death of George Floyd.
• Nearly all say that to them, everything going on feels personal. 
• Merck & Co. CEO Kenneth Frazier spoke with CNBC on June 1 and said that Floyd "could be me."
• Lowe's CEO Marvin Ellison said he has a "personal understanding of the fear and frustration" many people are feeling during this time. 
• Meanwhile, TIAA CEO Roger Ferguson Jr. said he was "outraged" by the recent events, and Tapestry CEO Jide Zeitlin spoke about how irreplaceable human life is. 
• Visit Business Insider's homepage for more stories.

There are only four black professionals among the leaders of America's largest 500 companies. Now, they're speaking out about systemic racism and inequality following the killing of George Floyd.

Merck & Co. CEO Kenneth Frazier, Lowe's CEO Marvin Ellison, and Tapestry CEO Jide Zeitlin spoke about how "personal" the recent events have felt to them as black men, while TIAA CEO Roger Ferguson Jr. said he was "outraged" by the recent events of police brutality against black Americans. 

Here's exactly how each responded to Floyd's death and the growing civil unrest in America.

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Roger Ferguson Jr., CEO of TIAA (Teachers Insurance and Annuity Association of America)

In a statement given to CNN, Roger Ferguson said he was "outraged by the recent incidents of racism, violence, and police brutality against members of the African American community."

"The haunting video of Mr. Floyd's last breaths is a sobering reflection of this national crisis," he continued. "No group should ever be targeted for racism, harassment, or other forms of discrimination.

"Particularly with the pandemic issues we are confronting in 2020, this is a time when we must embrace our differences and become more inclusive," he told CNN.

Ferguson joined TIAA in 2008, Business Insider previously reported. 

On May 29, Ferguson and TIAA's Executive Committee also sent a letter to employees that said the deaths of Floyd, Ahmaud Arbery, and Breonna Taylor "bring to the light the fear, inequality, and concerns of racism that still pose a threat to our humanity." 

Source: CNN

Kenneth Frazier, CEO of pharmaceutical company Merck & Co.

Kenneth Frazier is the CEO of the $190 billion pharmaceutical company Merck & Co., Business Insider previously reported. 

On June 1, Frazier spoke to CNBC about the death of George Floyd and said Floyd "could be me."

"What the African American community sees in that videotape is that this African American man, who could be me or any other African American man, is being treated as less than human," he said.

"Even though we don't have laws that separate people on the basis of race anymore, we still have customs, we still have beliefs, we still have policies and practices that lead to inequities," he added. 

Frazier joined Merck & Co. in 1992. He held various positions, including general counsel and president, before being appointed CEO in 2011.

"I know for sure that what put my life on a different trajectory was that someone intervened to give me an opportunity, to close that opportunity gap," he said. "And that opportunity gap is still there."

Source: Business Insider

Marvin Ellison, CEO of retail home improvement chain Lowe's

On May 30, Marvin Ellison wrote an open letter to his team, in which he recalled growing up in the segregated South. In the letter, he said he has "personal understanding of the fear and frustration" many people are feeling during this time. 

Ellison was appointed CEO of Lowe's in 2018 and was previously the CEO of  J. C. Penney, Business Insider previously reported.

Ellison also encouraged people to join together to combat and solve racism, and vowed that Lowe's would provide its team leaders with resources to support employees and their communities.

"To overcome the challenges that we all face, we must use our voices and demand that ignorance and racism must come to an end," he said. "This is a time to come together, to support one another and, through partnership, begin to heal."

Ellison shared the letter on Twitter. Read it in full here:

Jide Zeitlin, CEO of luxury fashion holding company Tapestry

Jide Zeitlin has been the CEO of the luxury fashion holding company Tapestry, which owns Coach, Kate Spade, and Stuart Weitzman, since 2019. On June 1, he released a LinkedIn statement addressed to employees where he called the current racial tension in the United States "personal," before going on to recount his own experiences with discrimination and racism. 

"We can replace our windows and handbags, but we cannot bring back George Floyd, Ahmaud Arbery, Breonna Taylor, Eric Garner, Trayvon Martin, Emmett Till, and too many others," he wrote, referring to the Tapestry-owned stores that had been looted amid the protests. Each of these black lives matter."

Zeitlin also highlighted the importance of diverse and inclusive hiring and shared that the company's senior leadership was convening to come up with "a longer-term plan for addressing systemic inequality."

"As brands whose core values are powerfully informed by the creative tension that cannot exist without diversity and inclusion, we cannot succeed if the ideal that is America does not succeed, including in different and diverse ways globally," he said.

Source: LinkedIn