Business

Tech hub 1871 celebrates its seventh cohort of female start-up founders

By Alexa Adler
Medill Reports

The seventh cohort of WiSTEM, 1871’s pre-accelerator program for female start-up founders, celebrated the completion of its 12-week program and pitched its companies to a crowd of techies and investors.

Photo at top: WiSTEM participant Sara Taylor-Demos showcases her company, Cora, at 1871. (Reporter Name/MEDILL)

Dairy Farmers Struggle With Economic, Health Challenges

By Brian Baker
Medill Reports

Andrews University opened its dairy farm in 1907. For more than a century, the private college in southwest Michigan used the farm for educational purposes and relied on it for financial income. But after three consecutive years of losses, the university’s board voted in early June to close its dairy operations next summer.

“After three bad years you lose heart and say, ‘let’s face reality,’” said Larry Schalk, the university’s vice president for financial administration.

The dairy farm had typically generated about $100,000 in annual profits for the school’s budget, but over the last three years had losses between $750,000 and $900,000 due to low milk prices and rising production costs, Schalk said. The finance committee had been urging the board to close the dairy operations for the past year.

Dairy farmers across the country are facing similar situations as a downturn in milk prices hits its fourth year, leaving most farmers unable to breakeven. The financial difficulties can leave farmers feeling depressed and hopeless, a dangerous combination for an industry with the highest suicide rate in the country, according to a 2016 study by the Centers for Disease Control and Prevention. The rate of suicide for people in the farming, fishing and forestry occupations was 85 individuals per 100,000 people, according to the study.

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Motorola Solutions CEO brings in $15 million pay package

By Sarah Foster
Medill Reports

The head of Motorola Solutions Inc. is reaping the financial benefits of leading a well-performing company, analysts and compensation experts said.

The company’s directors raised CEO Gregory Brown’s salary by 27 percent in 2017, a year when Motorola Solutions grew profits and adjusted income, completed multiple acquisitions and launched 85 new products, according to its most recent proxy statement, which was filed on March 28 with the U.S. Securities and Exchange Commission. Last year, Brown complemented a $1.25 million base salary with additional incentives worth $13.81 million, making his total compensation package $15.06 million, the statement said. The Chicago-based company provides telecommunications equipment for public safety officials.

Brown’s total compensation package has nearly doubled since 2014, when he received $7.61 million, according to the company’s 2014 proxy statement. At the same time, Motorola stock price has nearly doubled over the past three years as well, analysts said.

“He’s benefited just as much as shareholders have,” said Keith Housum, managing director and equity research analyst at Northcoast Research.

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Berkshire Hathaway’s Governance Unique Among Public Companies

By Brian Baker
Medill Reports

Todd Combs, an investment officer at Berkshire Hathaway Inc., received $376,750 in total compensation last year for serving on the board of directors at JPMorgan Chase & Co. That’s nearly 140 times what Bill Gates earned as a director on the board of Berkshire.

“No Berkshire director is in it for the money,” said Charles Munger, vice chairman of Berkshire during the company’s 2017 annual meeting. “It’s a very old-fashioned system.”

Despite Berkshire’s wide following and general admiration for CEO Warren Buffett, its approach to corporate governance remains an anomaly. As the day when Buffett is no longer running Berkshire gets closer, some are beginning to question whether that governance can continue without him.

Brian Tayan, a corporate governance researcher at Stanford University, said Berkshire’s challenge when Buffett is gone will be to shift its governance strategy from being built around Buffett to being built around the company. Although he doesn’t expect immediate changes, Tayan said he expects Berkshire will look more like other businesses in the future.

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Former Athlete Helping Others Find Their Identity

By Nick Mantas
Medill Reports

High school athletes who don’t play sports in college all go through a transitional period of what life is like without a practice schedule.

Chloe Barnes went through that same transition and her experience, like that of thousands other athletes, wasn’t a smooth one.

So she created Elle Grace Consulting in order to help her fellow athletes find who they truly are underneath their jerseys.

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Chicago is stepping up to be a trading hub for crypto

By Jinman Li
Medill Reports

Chicago is becoming a honeypot for cryptocurrency and will attract more and more crypto companies in the future, panelists said Tuesday at a luncheon panel hosted by the Executives’ Club of Chicago.

The birth of stock futures trading in the last century in Chicago demonstrated the city’s innovative spirit, said Sunil Cutinho, the president of CME Clearing. Compared with other metropolitans such as New York and San Francisco, Chicago focuses more on markets and has a unique ecosystem as a financial center, he added.

The different players in the ecosystem such as exchanges, financial institutions and technology companies are entering the cryptocurrency space, forming a concentration of upgrading power in Chicago, said Peter Johnson, vice president at Jump Capital, a Chicago-based venture capital firm.

Johnson said that Kraken, a bitcoin exchange based in San Francisco, is going to open its largest office in Chicago in 12 to 18 months.

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Chicago residents grapple with saving and spending

By Minghe Hu
Medill Reports

As a father of eight children, George Grea works hard at two jobs to pay off debts, his mortgage and to save money. Troubled by spending more than he should with his credit cards, the 47-year-old parent got rid of all of them and decided to build up his credit score slowly, he said.

Going shopping made him feel good and credit cards made expensive products seem affordable to him, so he couldn’t stop himself from overspending on things he didn’t need, Grea said. ​ Continue reading

Relation between money and happiness contingent on an individual’s situation

By Jinman Li
Medill Reports

Whether money can buy happiness varies among individuals, contingent on their backgrounds and situations and how much money the person earns.

A 2017 study from Purdue University using data from the Gallup World Poll, which surveyed more than 1.7 million people from 164 countries, found that earning between $60,000 and $75,000 a year is ideal for what lead author Andrew Jebb called “emotional well-being” in a press release. The finding aligns with a 2010 research from Princeton University, which found that people’s level of happiness rises with their annual income when it is below $75,000, but the correlation does not exist beyond that point.

Nancy Ladd, a financial advisor at Trinity Financial Advisors LLC, said although money is not the driving force of people’s happiness, it does come into play, especially when it is below a certain amount, which, according to the research, is earning $75,000 a year.

“That’s really a minimum point where people basically start to feel that they can keep their head above the water,” Ladd said.
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International Rugby Coming to Chicago

By Nick Mantas
Medill Reports

At a news conference inside Soldier Field it was announced The Rugby Weekend will be held in Chicago once again.
The last time Chicago hosted the event in 2016  sell-out crowds packed the Chicago Bears stadium to see their beloved country-men and women play rugby.

Team members from Italy, New Zealand, Ireland, and the United States all attended Tuesday’s announcement and answered questions on their anticipation of the event.


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People may not inherit parents’ money DNA, experts say

By Roxanne (Yanchun) Liu
Medill Reports

Lori Schwartz’s father, a 74-year-old doctor, only goes to restaurants for dinner where he can use coupons. Raised in a poor family, her father watches how much he spends all the time despite the good paychecks he now earns, embarrassing his daughter.

“I hate it,” she said. “His cheapness is not attractive. I never want to be like that.”

Several adults interviewed for this story said they are comfortable spending more money on themselves than their thrifty parents do, but they are still influenced by their parents’ money habits. These children cherry-pick their parents’ financial behaviors, adopting those that fit with their current economic situation and their expectations of future financial means, said Jean Marie Dillon, a certified financial planner at Freedom Financial Counseling, LLC.
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