Forbes - USA (November 2019)

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Jobcase Cont.



erick Goff, Jobcase’s founder and CEO, after company went under in the 2008 financial crisis,


hearing Contreras’ story. When he founded the he persuaded his partners to back him in new-
Cambridge, Massachusetts-based company in ly formed Percipio Media, a firm that created

2015, he set out to do what LinkedIn hasn’t been no-frills job boards that aggregated listings from
able to accomplish—create a site where the 80% other sites.
48 of working-age Americans without a four-year The company did well, but in 2014, at an HR

college degree can network, find jobs and man- conference in Las Vegas, he realized the peo-
age their careers. (A LinkedIn spokesperson says HOW TO PLAY IT ple searching his job boards needed support.
S

R its mission has always been to support the entire by Jon D. LinkedIn, with its polished, résumé-like profiles,
U

E workforce.) Markman offered nothing for his buddies back in Toledo
N Goff has raised $118.5 million at a valuation toiling away at Kinko’s. Goff moved Percipio’s job


E Helping people
R for Jobcase that Pitchbook has at $445 million. become employ- boards into a subsidiary, reorganized his team
P

E Revenue, which Goff pegs at $100 million over able and dis- and launched Jobcase. He says his priority was
R cover opportuni-
T the past year, comes from 2,000 companies in- ties can improve to build a “community.” Its core is the stream of
N cluding Amazon, Pizza Hut and FedEx. They pay
E society and the posts that gave Sasha Contreras emotional sup-
economy. One

• from $199 for a single job posting to as much as port during her five-month job search.
way to play
N $5,000 for a hiring event organized by Jobcase. this trend is How many members find work through the

A
I Jobcase has already signed up 110 million of ManpowerGroup, site? Of the 31 interviewed for this story (Forbes
R a staffing com-



A the 197 million Americans it’s targeting, and Goff pany that grew contacted all but 2 independently), only 2 land-
R
T plans to take the site global in the next 18 months. from a single ed jobs through Jobcase. But all said they liked

N In the G20 countries, 84% of people don’t have Milwaukee office the community. “It’s been a really good forum

O in 1948. Today the
C college degrees. Tapping that market, he says, will company puts to rant,” says Rhonda Yates, 51, a member who
put his company on a fast track to a billion mem- millions of people found work through another site as a production
bers and a $1 billion valuation. to work through a scheduler at a packaging supplier in Lexington,
network of 2,600
Goff, 52, relates to the challenges his mem- offices in 80 Kentucky.



bers face. His father, a former marine, worked as countries. Units Most members don’t report when they land
provide work-
a transmission repairman at a Chrysler plant in jobs, but Goff estimates 1 million, or 1%, found

force consulting,
Toledo, before becoming a life insurance sales- professional out- work through Jobcase last year. That tiny ra-

man. Goff earned a master’s at Carnegie Mel- sourcing, training tio doesn’t discourage employers. At a time of re-
and career
lon, but he graduated into the 1990 recession management. cord-low unemployment, companies don’t expect
and spent four months washing dishes in Tole- The business listings will lead directly to applications, says JR
do. He worked a stint as an options trader in New generated $22 Keller, a professor of human resource studies at
billion in sales in
York before earning a second master’s, in tech- 2018 and profits Cornell. “Companies are just so desperate to find


nology management, at MIT. He endured an- of $796.7 million. really good people that if you have a community
Shares are up
other recession and took a job he didn’t really of 100 million people, they’re going to post a job
39% in 2019, yet
want as CIO at an Oklahoma City energy com- there is plenty of there because they don’t want to miss out,” he says.

pany before landing at a Cambridge hedge fund, growth ahead as Jobcase was profitable from the get-go, says
companies seek

Percipio Capital Management, as CEO. After the flexibility amid an Goff, but since early 2018 he has been plow-

intense demand ing money into recruiting members. In June
for skilled labor.
he sponsored the Chicago Urban League’s city-
Jon D. Markman wide job fair and walked away with 8,000 new
is president of
The Vault Markman Capital members.
Insight and author Goff dreams of a world where Jobcase has so

POWER USERS of Fast Forward
Investing. much visibility that workers will be able to use
At first LinkedIn also strug- the platform to advocate for better conditions at

gled to make money, trying
to charge consumers a few work. “We want to support capitalism by putting
bucks to use the site. Then it not just shareholder value but worker value at the
discovered the sweet spot. From 2012:
top,” he says. “It starts with the members.” F
Rather than try to wring 20 bucks here and there from
individual users, [CEO Jeff Weiner] refocused the

company on selling a vastly more powerful service to F I NA L T HO U G H T
corporate talent scouts, priced per user at as much
as $8,200 a year. Today thousands of companies use “IT IS HARDLY POSSIBLE TO

LinkedIn’s flagship Recruiter product to hunt for skilled BUILD ANYTHING IF FRUSTRATION, PATRICK WELSH FOR FORBES
achievers. In human resources departments, having BITTERNESS AND A MOOD OF
your own Recruiter account is like being a bond trader
with a Bloomberg terminal—it’s the expensive, must- HELPLESSNESS PREVAIL.”
have tool that denotes you’re a player. —Lech Walesa
F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

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INVESTING RETIREMENT

By Kenneth Rapoza Photograph by Jamel Toppin for Forbes



The Great Wall of Money





50



No matter how much Trump bellows, the Sino-American trade war will eventually pass,
and Asha Mehta and the smart quants at Acadian Asset Management will cash in on China.



























On March 1, 2018,
Asha Mehta’s firm, Boston’s Acadian
Asset Management, announced it would
be launching a new China strategy, fo-
cused on investing directly in mainland
Chinese companies. Her timing could
not have been worse. Three weeks later
President Trump launched an all-out
trade war, vowing to place tariffs on tens
of billions of Chinese imports. It was the
beginning of a nearly continuous stream
of China-bashing from the White House,
which—no surprise—has wreaked havoc
on Chinese equities. In the 18 months
since, MSCI’s China Stock Index is down
16%, while the S&P 500 has gained 11%.
“China has been a hard sell,” says
Mehta, 41, as she stares out over Boston
Harbor from her Franklin Street office,
“but you have to ignore the noise. Chi-
na’s local market is becoming a net capi-
tal importer. You have continued market
liberalization.”
The novel quantitative China-focused
strategy Mehta is charged with lead-
ing has grown from $15 million under
management, in April 2018, to more
than $138 million today. Big investors
are pouring money into Acadian for
two reasons. First, despite the rhetoric,
China’s volatile equity market is finally


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Déjà View
ENTRANCE FEES


“Tariff Man” has plenty of company: The United States and Russian Jewish immigrants.
has been taxing an array of offbeat imports for more

than 200 years. When Mehta was in grade school, she would
sometimes stay with her grandparents in the small

2019: When President Trump’s next tariff round kicks in on
December 15, iPhones made in (where else?) China will face desert town of Bhiwani, west of Delhi, where her
a 15% levy, meaning even the cheapest iPhone 11 model will family was transplanted after India and Pakistan
run an extra $100—assuming Apple doesn’t absorb the cost.
52 were partitioned in 1947. Her grandparents’ three-
1930: The notorious Smoot-Hawley Tariff Act takes aim at

childhood itself, whacking toy dolls with a 90% import fee. room house had intermittent electricity and no
1890: Before he would rise to the presidency in 1897, running water. Sewage ran through the streets. HOW TO PLAY IT
T
N Representative William McKinley pushes a tariff bill “I lived among children begging in the streets, According to
E through Congress that includes a 60% tax on imported
M eyeglasses and lenses. His future veep, the bespectacled in homes with poor sanitation, and was greeted Brendan Ahern
E Teddy Roosevelt (above), surely squints in disapproval. daily with monkeys, pigs and cows meandering
R For those un-

I 1816: The first explicitly protectionist trade measure in into our home,” she says about her summer visits

T able to afford

E U.S. history slaps a 30% tariff on foreign-made umbrellas to India. “I was fascinated by my sameness with Acadian’s high
R (among much else)—bad news for Americans that Septem-

ber, when a tropical storm batters the former colonies. minimums, there’s

• them [the children], yet our differences were so KraneShares

G Sources: St. Louis Federal Reserve; U.S. Trade Representative. big. This intellectual curiosity from childhood fu- Bosera MSCI
N China A (KBA),
I eled my career in emerging markets.”
T a $564 million
S Acadian Asset Management Cont. For college Mehta headed to Stanford thinking ETF geared to
E
V opening up. Until recently, most foreigners could she would pursue medicine, but in 1999 while in retail investors
N invest only in H-shares of select big companies, rural India on a Unicef-funded internship in pub- who believe the
I biggest growth
which were traded on the Hong Kong Exchange. lic health, her funding fell through. market in China
Now non-Chinese investors can directly buy so- “[It] got me thinking that if you really want to is in mainland
Chinese equities.
called A-shares. “All the major benchmarks began support development there, it’s not going to hap- Its chief invest-
adding the A-shares to their emerging markets in- pen through medicine. It had to happen through ment officer,


dices last year,” Mehta says, “so there will be a wall financing,” she says. Brendan Ahern, is

pound-the-table
of money moving in.” After graduating from Stanford in 2000 with a bullish. “Once
The other reason has to do with Mehta’s track degree in biology and anthropology, she became China A-shares
are fully included
record. The China-heavy small-cap emerging mar- an analyst in Goldman Sachs. A few years later she
in the MSCI
kets strategy she also leads, with $2.4 billion un- got her M.B.A. from Wharton, landing at Acadian Emerging Markets
der management, has returned 10.9% on average in 2007 as an analyst. Index, it will be
bigger than South

per year since its inception in 2011, beating its Acadian was founded in 1977 as a research firm Korea,” he says
benchmark by 8.6% points per year on average. by a Putnam Investments alum known for build- of the weight-
Her new China A-shares strategy is down 5.1% ing the world's first international index-matching ing. That index

has around 1,200
amid the current turmoil, but that’s only half as strategy for State Street before getting into money stocks, and China
bad as her benchmark, which is off 10%. management in the 1980s. Today the Ph.D.-heavy accounts for 500

of them. “Passive
“China represents just 5% of global market cap firm has $94 billion under management.

investments have
and could rise to 20%,” Mehta says. “Our clients The firm rejects the idea of a perfectly efficient, no choice but to



see this as a strategic opportunity to get ahead of perfectly priced market, especially in China, where buy more China
stocks if they

the flow of capital coming to China.” 80% of players are mom-and-pop investors who are following
Mehta and her comanager, Bin Shi, use al- treat the stock market like it’s a Macau casino. “The a benchmark,”
gorithms to screen some 3,500 stocks listed in word for stock market in Mandarin is ‘stir fry,’” Ahern says. The
KraneShares
Shanghai and Shenzhen for 100 fundamental and Mehta says. “There is this notion that it’s hot. It can China A fund
technical parameters ranging from price-to-book move on things people read on WeChat.” launched March
4, 2014. It’s
value and earnings surprises to relative strength “Some of our peers believe China is too senti-
up 41% since
and “abnormalities” in corporate accounting. ment-driven or idiosyncratic for quant to work,” inception ending
Their fund currently has 100 holdings, most- she continues. “But market mispricings exist be- September 30
and 25% year-to-
ly large- and mid-caps. Included among them are cause of behavioral errors. We can generate alpha date.
red chips like Kweichow Moutai and Wuliangye by systematically targeting companies that are at- HOW TO PLAY IT BY KENNETH RAPOZA; BETTMANN/GETTY IMAGES (LEFT)
Yibin, two giant state-owned liquor companies tractive on fundamentals.”
that make grain alcohol known as baijiu. Many
seem recession-proof. Kweichow has gained over
F IN AL T HOU GH T
90% this year. Yibin is up over 150%.
Mehta’s route to global money management “YOU HAVE TO HAVE A STRATEGY
IN A POSITION, STAY TRUE TO
was atypical. She was raised in Gainesville, Flor-
THAT STRATEGY AND NOT PAY
ida, by two research physicians, her father from
ATTENTION TO NOISE.”
India and her mother the daughter of German —John Paulson
F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

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54






























































































F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

BERNARD ARNAULT THE PROFILE











F O R E V E R Y O U N G 55

















A




























































BY WEAVING TOGETHER TRADITION AND TRENDINESS, LVMH’S
BERNARD ARNAULT HAS CREATED THE WORLD’S LARGEST LUXURY EMPIRE
AND A $100 BILLION FORTUNE. NOW HE IS READY TO SCALE UP.







BY SUSAN ADAMS PHOTOGRAPH BY JAMEL TOPPIN FOR FORBES


N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M

→ “Bernard Arnault inspires me,” says Sheron Barber.


56



L T
U
A
N
R
A

D
R
A
N
R
E
B

—

E
L
I
F
O
R
P














The 38-year-old has traveled from Los Angeles Vuitton’s Versailles balustrades lead to a private atelier on the fourth
to the palatial Louis Vuitton store on Paris’ Place The Louis Vuitton floor where six seamstresses create bespoke dress-
store on Paris’ Place
Vendôme during the height of fall Fashion Week Vendôme pays es for celebrities like Lady Gaga and Emma Stone.
to pay tribute to his idol, the head of luxury co- homage to the “I was very involved in the design,” Arnault says.
lossus LVMH. Barber is a spectacular sight. He brand’s founder, who He obsessively tracks his top brands, especial-
opened his first shop
has dyed black dollar signs in his close-cropped nearby in 1854. ly Louis Vuitton, the conglomerate’s cash ma-
fuchsia and yellow hair, a green grill covering his chine, which accounted for nearly a quarter of
teeth and multiple Louis Vuitton luggage locks LVMH’s 2018 revenue of $54 billion and up to
dangling from the stainless-steel chain encir- 47% of profits, according to analysts. (LVMH
cling his neck. “I spent a couple hundred thou- shares financials for its top five divisions but not
sand last year on LV,” he says. He earns a hand- for its individual brands.) Vuitton’s selection of
some living customizing the looks of music acts bags, apparel and accessories, which the com-
like Migos and Post Malone. In his latest video, pany never wholesales or discounts, is an ever-
“Saint-Tropez,” Post Malone wears a chest plate changing mixture of classic and contemporary,
constructed by Barber that is a blend of black like an $8,600 limited-edition twist on its Capu-
leather and a Vuitton bag. Of Arnault, Barber cines purse in turquoise leather with an appliqué
declares: “He has single-handedly defined mod- pattern designed by Tschabalala Self, a 29-year-
ern luxury.” old artist from Harlem. American Virgil Abloh,
“It’s a most exceptional Louis Vuitton maison,” 39, Vuitton’s new menswear designer, created a stir
Arnault says of the Place Vendôme store, in Eng- early this year when he debuted a collection with
lish with a distinct French accent. “You can see the glow-in-the-dark bags that use fiber optics to illu-
entire universe of the brand.” Opened two years minate the LV logo in the colors of the rainbow.
ago, the space feels like a cross between a muse- “Why are brands like Louis Vuitton and Dior LOUIS VUITTON MALLETIER
um and a private club. An array of Vuitton’s wares so successful?” Arnault asks. “They have these
are displayed inside gleaming vitrines and on art- two aspects, which may be contradictory: They
fully placed shelves. Marble staircases with glass are timeless, [and] they are at the utmost level of


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

ALLETIER



modernity. . . . It’s like fire and water.”
That paradox has translated into record sales
and profits at LVMH, whose roster of more than FASHION CIRCLES

70 brands includes Fendi, Bulgari, Dom Péri- LVMH DIVIDES ITS 79 BRANDS INTO FIVE GROUPS. HIGHLIGHTED
gnon and Givenchy. That, in turn, has helped BELOW IS THE BIGGEST BUSINESS WITHIN EACH.
drive up LVMH’s stock price, which has nearly
tripled in less than four years. Arnault, who owns
47% of the company’s shares with his family, is
CHRISTIAN DIOR
58 now worth $102 billion, $68 billion more than $3.2 BIL
he was in 2016. He is the third-richest person on BULGARI
earth, just behind Jeff Bezos ($110 billion) and $3 BIL

L T Bill Gates ($106 billion). PERFUME & COSMETICS
U
A And at 70, Arnault is far from done. In late 13% WATCHES & JEWELRY
N October, LVMH made an unsolicited $14.5
R
A billion bid for the 182-year-old Ameri- 9%

D can jeweler Tiffany. If the deal goes

R
A through, it will be Arnault’s biggest
N acquisition ever. “If you compare SEPHORA
R $10.3 BIL
E us to Microsoft, [we are] small,” he
B LOUIS VUITTON TOTAL REVENUE
says. Indeed, LVMH’s market value
— $12.4 BIL
$54 BIL
E of $214 billion lags far behind the
L
I software giant’s $1.1 trillion. “It’s just
F
O the beginning,” says Arnault.
R
P rnault’s beginnings in SELECTIVE
A   France’s industrial north FASHION & LEATHER RETAILING
& OTHER
were far removed from the
glittering perch he now oc- 39% WINE & SPIRITS

cupies. His first love was mu- 28%
sic, but he didn’t have the talent to make it as a 11%
concert pianist. Instead, after graduating from HENNESSEY
an elite French engineering school in 1971, he $3 BIL
joined his father at the construction firm found-

SOURCES: LVMH; LUCA SOLCA, BERNSTEIN.
ed by his grandfather in the city of Roubaix.
An exchange with a New York cab driver that
same year planted a seed that would grow into genteel French. The media later dubbed Arnault
LVMH. Arnault asked the cabbie if he knew of “the wolf in the cashmere coat.”
France’s president, Georges Pompidou. “No,” re- Arnault’s next prey was Dior’s perfume di-
plied the driver, “but I know Christian Dior.” vision, which had been sold to Louis Vuitton
At age 25, Arnault took charge of the family Moët Hennessy, and a fight between the compa-

business. After socialist François Mitterrand be- ny’s brand heads gave him an opening. First, he
came France’s president in 1981, Arnault moved teamed up with the boss of Vuitton, the leather-
to the States and tried to build a division there. goods company whose founder had made cus-
But his ambitions were bigger than construction. tom trunks for Empress Eugénie, the wife of Na-
He wanted an enterprise he could scale, a busi- poleon III. Arnault helped the head of Vuitton
ness with French roots and international reach. oust Moët’s chief, only to get rid of him, too. By
In 1984, when he learned that Christian Dior 1990, again backed by Lazard and using the cash
was for sale, he pounced. Its parent, a textile and from Boussac, he had taken control of the com-
disposable-diaper company called Boussac, had pany, which included Moët & Chandon, the fa-
gone bankrupt, and the French government was mous French champagne maker, and Hennessy,
looking for a buyer. Arnault put up $15 million of the French cognac producer that dates to 1765.
his family’s money, and Lazard supplied the rest After conquering Louis Vuitton Moët Hen-
of the $80 million purchase price. At the time, nessy, Arnault spent billions to acquire lead-
according to reports, he made a pledge to revive ing European companies in fashion, fragrance,

operations and preserve jobs, but instead he fired jewelry and watches, and fine wines and spirits.

9,000 workers and pocketed $500 million, sell- Since 2008, LVMH has purchased 20, bringing

ing off most of the business. Critics recoiled at his the total to 79 brands. In 2011 it paid nearly $5
brazenness, which seemed more American than billion for the Italian jeweler Bulgari in a most-


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

KEEP GETTING YOUR KICKS










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in bonds involves risk including possible loss of principal.

U   p close, Arnault’s polished appear-

ance is like a suit of armor. On an
overcast Friday morning in late
September, he is attired in a selec-
tion of LVMH brands, including a
pin-striped suit by Celine, a navy tie by Loro Pi-
ana, black leather slip-ons by Berluti and a white
cuff-linked shirt by Dior with his initials em-
60 broidered just below his heart. Slim and 6 foot 1,
he stays fit playing four hours of tennis a week,
sometimes with his friend Roger Federer. “I try
L T not to be fat, as you see, and I do a lot of sports,”
U
A he says.
N Those games are among his only breaks from
R
A a workaholic schedule that starts at 6:30 a.m.

D in his 17th-century mansion in the posh 7th Ar-
R
A rondissement on Paris’s Left Bank. He begins
N each morning listening to classical music, scan-
R
E ning industry news and texting family members
B
and brand chiefs. “What I have in mind every
—

E morning is that the desirability of a brand should
L
I be as strong in ten years,” he says. “It’s really the
F
O key to our success.” By 8 a.m. he’s in his office at
R 22 Avenue Montaigne, where he stays as late as
P
9 p.m. Occasionally he’ll take a 20-to-30-minute
pause to play the Yamaha grand piano in a room
down the hall from his ninth-floor office.
“He works 24 hours,” says Delphine Arnault,
44, Arnault’s oldest child, from his first marriage,
and the executive vice president of Louis Vuitton.
“When he sleeps, he’s dreaming of new ideas.”
Every Saturday, he prowls his retail stores, re-
arranging bag displays and making suggestions
to clerks. He visits as many as 25 stores, includ-
ing the competition, in a single morning. “It’s a
ritual,” says his son Frédéric, 25, who works at
ly stock deal. Two years later it bought the fine- Micromanager LVMH’s top watch brand, TAG Heuer.
wool purveyor Loro Piana for a reported $2.6 Arnault frequently Arnault relays details from his store visits to
visits this Louis Vuitton
billion. Arnault’s most recent acquisition was in location next door to the chiefs of his top brands. He recently alert-
April when LVMH paid $3.2 billion for the Lon- his Paris offices. ed Louis Vuitton CEO Michael Burke that the
don-based hotel group Belmond, whose opulent new “it” bag, the $2,480 Onthego tote, was not in
holdings include the Cipriani hotel in Venice, the stock at the Place Vendôme shop. “He complains
luxury train line Orient Express and three ultra- when too many SKUs are sold out,” says Burke,
luxe safari lodges in Botswana. who has worked with Arnault since 1980.
“Bernard Arnault is a predator, not a creator,” At least once a month, Arnault travels in his
says a banker who was close to the Boussac deal. Bombardier jet to visit some corner of his empire.
Arnault has not succeeded at every conquest. In October, he visited the small town of Keene,
In 2001 he lost what the media called the “hand- Texas, where he and Donald Trump cut the rib-
bag war” for control of fabled Italian fashion bon on the first of two new Louis Vuitton work-
house Gucci, to his French luxury rival, Fran- shops slated to create 1,000 jobs over the next
çois Pinault. Over the next decade, LVMH used five years. (The brand already has two workshops
a stealth tactic common among hedge funds— in California.) “I am not here to judge his types of
cash-settled equity swaps—to secretly acquire policies. I have no political role,” said Arnault to
17% of Hermès, the 182-year-old maker of fine reporters. Still, the event sparked a flash of con-
silk scarves and the iconic Birkin bag. Hermès troversy within his own ranks. Vuitton’s womens- JAMEL TOPPIN FOR FORBES
fought Arnault off in a protracted battle that end- wear artistic director, Nicolas Ghesquière, wrote
ed in 2017 with LVMH relinquishing most of its on Instagram: “I am a fashion designer refusing
Hermès shares. this association #trumpisajoke #homophobia.”


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Interstate Batteries, Inc.
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LxNarVor NA^rU A]Nno N^L City of Mesa Infoblox Quest Diagnostics
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Akron Children’s Hospital Clark Nuber PS Jefferson Parish Government Saint Luke’s Health System
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AlloSource CME Group JMARK Business Solutions, Inc. Healthcare System
American Heart Association CNO Financial Group, Inc. Johnson & Johnson San Diego County
Amgen, Inc. ConnectiCare Jupiter Medical Center Regional Airport Authority
Apex Capital Corp. Constellation Brands, Inc. Kaiser Permanente 1Aa VNTc 4aV NL 1JUcc^ VornVJr
Arthrex, Inc. Cook Children’s Healthcare System Kennebunk Savings 1Aac 41
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AssetMark Core Creative, Inc. Kindred Healthcare SCL Health Good Samaritan
Associated Bank Council on Foreign Relations King Ranch, Inc. Medical Center
Assurance County of Alameda HR Services Dept. KKR SCL Health Lutheran Medical Center
AT&T AaL
csar{ L`VaVornArcn %S JN Lake Land College Sibley Heart Center Cardiology
Atlantic Health System County of Chester LG&E and KU Energy, LLC Singing River Health System
AtlantiCare, a member of Geisinger Creighton University Littleton Public Schools South County Health
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Baird CVS Health Martin’s Famous Pastry Shoppe, Inc. St. Francis Medical Center
Bank of America cxLoyalty Mashburn Construction Company, Inc. St. Joseph’s Health
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Health Plan, Inc. Franciscan Missionaries of Omni Workspace Company University of Richmond
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City of Boulder Hillrom PreferredOne Insurance Company
City of Coconut Creek Hillsborough County’s Well4Life Program Premier Health

ed McCartney, who in 2018 ended a 17-year part-
nership with the Pinault family’s Kering luxury
group (owner of Gucci), to become his “special
advisor.” She accepted, despite LVMH’s decision
to continue to make products with leather and
fur (and glue). Arnault also declined to join the
“Fashion Pact,” led by Kering and signed by 32
apparel makers, including Chanel, Hermès, fast-
64 fashion giant H&M and even McCartney, who all
pledged to lower carbon emissions.
Arnault then made his own series of eco-ges-
L T tures during Fashion Week, when the media
U
A converged on Paris to cover the shows. At Tues-
N day’s Dior show, where models paraded across a
R
A stage decorated with 170 trees in dirt-filled bur-

D lap bags, the press was told that the theme was
R
A sustainability and that the electricity at the event
N was produced with genera-
R
E Arnault didn’t respond to Ghesquière’s dig. tors powered by canola oil.
B
In late October, Arnault, Burke and Dior CEO The next evening, LVMH
—
hosted 50 journalists for a
E Pietro Beccari were set to fly to Seoul to visit
L
I stores, including a new Frank Gehry-designed two-and-a-half-hour event
F
O Vuitton outpost. It’s the sixth Vuitton store to in an auditorium at com-
R include an art gallery that will show selections pany headquarters. Arnault
P
from the extensive collection of the LVMH-fund- and ten LVMH brand chiefs
ed Fondation Louis Vuitton, which also rotates took turns on a brightly lit
through the Fondation’s $135 million Paris mu- stage reciting their com-
seum (also designed by Gehry). mitments to environmental
Even with the conglomerate’s massive foot- stewardship, their presen-
print around the world—4,590 shops in 68 coun- tations interspersed with
tries—store openings and closings often depend slickly produced videos of
as much on Arnault’s gut and a neighborhood’s models strutting down cat-
ambience as on more traditional metrics like walks and cashmere goats
sales per square foot. In China, one of LVMH’s frolicking on the Mongolian
most important markets, he limits the number steppes.
of Louis Vuitton shops to control the pace of ex- Mid-event, Arnault was
pansion. LVMH’s Fresh Faces asked to share his thoughts on young climate ac-
Last year, Louis Vuitton shuttered a store in Arnault regularly tivists like 16-year-old Greta Thunberg. “I’m a nat-
brings in new design-
Fort Lauderdale, Florida, because adjacent shops, ers. Pop singer Ri- ural optimist,” he said, “unlike Greta, who has a
restaurants and parking weren’t ritzy enough. Ar- hanna (top) headlined big problem, and that’s projecting an outrageous
Fenty’s pop-up event
nault visited a property on the Champs-Élysées in Manhattan this past amount of pessimism in her messages without any
multiple times before he approved a new Dior summer while Stella real solutions.”
store near the Arc de Triomphe that opened in McCartney, Arnault’s Not surprising for a corporate titan, he prefers
new sustainability ad-
July, despite data showing the previous tenant visor, drapes herself in not to dwell on problems. “He doesn’t like to hear
had sluggish sales. “He pushes you to really be her own eco-friendly the word ‘no,’” says Anna Wintour, the longtime
design.
sure,” Dior chief Beccari says. “He wants to chal- Vogue editor. “It’s not part of his vocabulary.” Not
lenge you, that’s his tactic.” from rivals, acquisition targets or even environ-
mental champions. LANDON NORDEMAN/TRUNK ARCHIVE (TOP); ERIK MADIGAN HECK/TRUNK ARCHIVE
S    tic. In July, as apparel brands reeled in. In 2017, LVMH launched a cosmetics
McCartney is one of many big names he’s
howing up rivals is another tac-
line, Fenty Beauty, with the pop star Rihanna,
were competing to see who
could be the most eco-con- distributing the products through its retail beau-
scious, he announced a partner- ty chain Sephora’s 2,600 stores. Capitalizing on
ship with the British fashion designer Stella Mc- Fenty’s broad-audience offerings—its foundation
Cartney (daughter of Paul), who has long tout- comes in 40 skin shades—and on its founder’s 77
ed her sustainability efforts (she says she even re- million Instagram followers, the division will hit
fuses to use glue in her sneaker line because it’s $550 million in sales this year, Arnault says. He’s
made from boiled animal parts). Arnault invit- betting that Fenty Fashion, the apparel collection


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

Forbes’ Top-250 Wealth Advisors

Featured in Forbes Sept. 2019 Magazine


Forbes ranks America’s Top Wealth Advisors who manage
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LVMH debuted with Rihanna in May, will meet En Famille 13 months ago, Frédéric Arnault pitched an idea
with similar success. “She brings a different vi- Four of Arnault’s to his father over dinner. To enhance the brand’s
five children work in
sion of fashion,” Arnault says. “For the future, it’s corners of the LVMH smartwatch for golfers, he wanted to acquire a CLOCKWISE FROM TOP LEFT: KARL LAGERFELD, MAZEN SAGGAR, KARL LAGERFELD, JEAN-FRANÇOIS ROBERT
very good for us to be connected to Millennials.” empire. Clockwise French startup, FunGolf, that had built an app
from top left:
Alexandre, Antoine, with detailed terrain data on 39,000 courses.
T    looks to his five children from two from sand traps or greens. “The people in the
Frédéric and Delphine.
Players could use it to measure how far they were
o keep his brands modern, he also
M&A department thought I was crazy,” he says.
marriages, four of whom work at
LVMH: Delphine, 44; Antoine, But once he made the case to his father, says Fré-
42; Alexandre, 27; and Frédéric, déric, “He said, ‘Go for it.’”
25. His youngest child, Jean, 21, will likely join Alexandre Arnault says Bernard was quick to
the company when he finishes school, according green-light tech deals Alexandre spearheaded at
to Alexandre. the family investment vehicle, Groupe Arnault,
Shortly after he started as strategy and digi- including bets on Spotify, Slack, Airbnb, Uber
tal director at the Swiss watch brand TAG Heuer and Lyft. Then, in 2016, he persuaded LVMH


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So what do Arnault’s offspring say about which
one of them is likely to lead the company one day?
CLOSING IN As though reading from the same script, they all

LVMH STOCK HAS BEEN SOARING, MAKING ARNAULT ONE sidestep the question. “Our father is very young,”
OF THREE PEOPLE IN THE WORLD WORTH MORE THAN says Delphine. “He’ll work for 30 more years,” Al-
$100 BILLION. HE’S $4 BILLION BEHIND BILL GATES AND exandre says. “I don’t think he’ll ever stop,” says
LAGS JEFF BEZOS BY JUST $8 BILLION.
Antoine, head of LVMH corporate communica-
$300 tions and chief of Berluti. “This is not a topic we
68 think about,” Frédéric says. “We hope he is going
to stay as long as possible in this role.”
250
LVMH “People ask me all the time,” says Arnault.
L T S&P 500 “What is most important for the group is we find
U
A 200 the best, and we’ll see if it’s in the family or out-
N side the family.” How long will he work? “I have
R
A no end decided.”

D 150 Though he won’t say which of his children he is
R
A most likely to promote, he is eager to talk about
N their talents. He shows off a video on his iPhone
R
E 100 11 of Frédéric playing a Liszt sonata in prepara-
B
tion for a concert he will give at a music festival
—
outside Paris together with his mother. Canadi-
E
L 50
I an-born pianist Hélène Mercier-Arnault, 59, per-
F 12/31/15 01/06/17 01/05/18 01/04/19 10/18/19
O SOURCE: FACTSET. forms regularly as a soloist and chamber musi-
R cian. “Like a professional,” Arnault says about
P NET WORTHS
Frédéric’s skill. “I’m not playing like that.”
131 As for sibling rivalry, Arnault and his children
BERNARD ARNAULT
paint a portrait of family harmony. The siblings
JEFF BEZOS
112 110
BILL GATES 106 often gather for Saturday lunch with their par-
102 $100
97 BIL ents, and they all spend some of August at the
90
86 Arnault compound in Saint-Tropez. Only Fré-
75 73 72 76 déric admits that discord surfaces on the tennis
court. “It can get quite tense,” he says. “Our father
$50 is very competitive. He doesn’t like losing. This is
45 BIL
42 something he’s transmitted to us.” No one close to
34
the family will make an on-the-record prediction
about succession. But one longtime observer says
that when Arnault finally steps down “It will be
03/2016 03/2017 03/2018 03/2018 10/2019 Game of Thrones.”
Arnault sees the future playing out quite differ-
ently, convinced that his tight-knit family’s con-
to pay $719 million for an 80% stake in the trol will give LVMH an edge for years to come. In
121-year-old German luggage maker Rimowa, fa- his own mind, he’s going up against not only his
vored by A-listers like David Beckham and Ange- competitors in the luxury sector but also global
lina Jolie. At Rimowa, Alexandre later led prod- giants. He calls Microsoft a “beautiful company”
uct collaborations with au courant brands like but notes that Gates has held onto only a small
the American skateboarding line Supreme. number of shares. “Long-term he won’t be there,”
Delphine, meanwhile, leads the six-year-old he muses.
LVMH Young Fashion Designer Prize, awarded Before proclaiming his vision for his conglom-
each year to one designer chosen from thousands erate, he catches himself. “In a way, I should not
of applicants. Louis Vuitton’s Virgil Abloh was say that, because you may think I am preten-
a finalist for the 2015 prize (he had interned at tious,” he says. But then he lets loose: “[LVMH]
Fendi in 2009 with his friend Kanye West). And is a French monument. Because it represents
LVMH has launched an accelerator program for France all over the world. People know better
up to 50 promising startups in the luxury goods the name of Louis Vuitton, Christian Dior, Dom
sector at Paris’ Station F, the brainchild of French Pérignon, Cheval Blanc, than anything else. May-
billionaire Xavier Niel, who also happens to be be they know also Napoleon? General de Gaulle?
Delphine’s long-term partner and the father of We think it’s important that this group, for the
the couple’s two children. long term, is controlled by a French family.”


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9



F O R B E S B R A N D V O I C E W I T H i S H A R E S | P A I D P R O G R A M












INVEST WITH A PURPOSE





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necessarily mean it will happen again. Still, the results
in companies committed to positive environmental,
of this bet are worth noting since they illustrate the
social and governance (ESG) business practices. Or
potential of index investing and ETFs.
if you’re looking to invest in the long-term forces
shaping our future, megatrend ETFs offer access to
ETFs generally seek to track an index of stocks, bonds
companies driving advances and shaping our global
or other securities. They can be broad market
economy and society.





N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M

F O R B E S B R A N D V O I C E W I T H i S H A R E S | P A I D P R O G R A M







VALUE Bottom Line: With iShares ETFs, you have a
variety of choices to help you meet your needs,

Investing in actively managed mutual funds can be transparency to give you insight into your exposures
and a way to invest that is convenient for you. But
costly, as professional asset managers need to be
paid for their decision making. there is a larger story here as well. The legendary
investor mentioned earlier gifted the winnings from
72 his bet to Girls Inc. of Omaha. Consider iShares
iShares ETFs are:

/ Ã Ì i « Þ Õ Ài>V Þ ÕÀ w > V > } > Ã >Ã Üi

as fuel your personal passions.
E
S
O the fees of the
P
R
U 1/3 average active
P
6
A mutual fund HELP BUILD

H
T
I
W
A BETTER
T
S the tax cost of the
E
V average active
N 1/2
I FUTURE WITH
mutual fund 7
SUSTAINABLE


Over 10 years, a hypothetical $10,000 investment
in an active open-end mutual fund charging 0.96% ETFs
in fees, with monthly contributions of $1,000 and an
assumed compounded rate of return of 8%, would
8
grow to $190,450 and lead to $11,264 in fees.
Everything else being equal, the same amounts
invested in an ETF charging 0.34% in fees would grow More and more, consumers are changing the
to $197,632 and lead to only $4,081 in fees. 9 world through their buying decisions. According to
Nielsen, 73% of consumers say they would change
their consumption habits to reduce their impact on
ACCESSIBILITY the environment.
11


" i iÞ Li iwÌ v
/ Ã Ã Ì >Ì Þ Õ V> LÕÞ > ` Ãi But did you know you can seek to make an impact
them throughout the day, just like stocks. All you as an investor, too? Sustainable investing, also
need is a brokerage account. Mutual fund shares are commonly referred to as socially responsible
typically bought and redeemed through the fund investing, is an investment strategy for those who
company itself, at the net asset value of the day seek sustainable outcomes while pursuing their
when the order was placed, usually calculated at w > V > } > Ã] > ` ̽Ã
> } v>ÃÌ «À }ÀiÃð
/ Ã
4 p.m. With ETFs, you can place a trade at the are among the fastest-growing types of investment
current market price throughout the day. vehicles to access sustainable investment strategies.


With ETFs, you buy shares, just like stocks of BlackRock projects that global sustainable ETF
individual companies, but there is no minimum assets will grow from $25 billion today to more than
12
amount needed to invest, like there is with some $400 billion by 2028. iShares provides investors
10
mutual funds. As long as you can afford the cost of with a range of options—outlined on the next
the share, you can purchase it. page—for aligning their sustainability goals with
Ì i À w > V > L iVÌ Ûið







N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M

F O R B E S B R A N D V O I C E W I T H i S H A R E S | PA I D P R O G R A M







GO BROAD WITH ESG INVESTING SOURCES:


ESG investing evaluates companies on their 1
Berkshire Hathaway annual report, February 2018.
environmental (E), social (S) and governance (G) 2 Investment Company Institute, ETFGI as of March 2018 (as
business practices. quoted in a BlackRock report titled “Four Big Trends to Drive

ETF Growth.”)
Environmental (“E”) criteria can include a 3 BlackRock, as of 2019. There is no guarantee this projection 73
company’s carbon and toxic emissions, impact will come to pass.
on biodiversity and resource consumption. Social 4 Investment Company Institute, as of 2019. I
(“S”) criteria examine companies’ impact on 5 BlackRock, as of July 2019. N
V
communities, employee treatment and product 6 Morningstar, as of 12/31/18. Comparison is between the E
S
quality. Governance (“G”) criteria can include board average Prospectus Net Expense Ratio for the iShares ETFs T

composition, executive pay and risk controls (0.34%) and active open-end mutual funds (0.96%). W
I
T
for things like corruption, bribery and 7 Morningstar, as of 12/31/18. “Tax Cost Ratio” is a H

accounting malpractice. Morningstar measure of the impact of taxes on capital gains A

P
and income distributions on performance. The average U
As an example, iShares ESG MSCI USA ETF (ESGU) w Ûi Þi>À />Ý
ÃÌ ,>Ì v - >ÀiÃ
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P
provides access to higher ESG-rated companies managed open-end mutual funds available in the U.S. O
S
while seeking similar risk and return to the relevant (excluding municipal bond and money market funds) E
broad market. ESGU is one of seven iShares included in the comparison is 0.68% and 1.50%, respectively.
Sustainable Core funds, which allow investors to 8 Morningstar, as of 12/31/18. Comparison is between the
build a low-cost sustainable portfolio across stocks
average Prospectus Net Expense Ratio for the iShares ETFs
and bonds. (0.34%) and active open-end mutual funds (0.96%).

9 This is a hypothetical example for illustrative purposes only
and does not represent the performance of an iShares ETF.
GET SPECIFIC WITH THEMATIC 10 Some brokers/dealers may have a minimum order.

AND IMPACT INVESTING 11 “Unpacking the Sustainability Landscape,” Nielsen,
Nov. 9, 2018.
Thematic investing focuses on a particular E, S or G 12 BlackRock, as of Oct. 23, 2018. There is no guarantee the
issue, like clean energy. iShares Global Clean Energy projection will come to pass.
ETF (ICLN) provides exposure to companies from
around the world that produce energy from solar,
wind and other renewable sources.

IMPORTANT INFORMATION ABOUT

«>VÌ ÛiÃÌ } Ãii Ã Ì >V iÛi > ëiV w V]
iSHARES ETFs
measurable and sustainable outcome, like
environmental impact. iShares Global Green
Bond ETF holds bonds that are issued to fund Carefully consider the Funds’ investment
environmental projects. objectives, risk factors, and charges and
expenses before investing. This and

Bottom Line: With sustainable ETFs, you can seek to other information can be found in the

> i >
«>VÌ Ü i «ÕÀÃÕ } Þ ÕÀ w > V > } > ð Funds’ prospectuses or, if available, the
To get started, think about the issues you’re most summary prospectuses, which may be
interested in and your investment objectives. Visit obtained by visiting www.iShares.com or
ishares.com to learn more. www.blackrock.com. Read the prospectus

carefully before investing.


Investing involves risk, including possible loss
of principal.





N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M

F O R B E S B R A N D V O I C E W I T H i S H A R E S | P A I D P R O G R A M








A fund’s environmental, social and governance basket of securities) and stocks (they trade on
(“ESG”) investment strategy limits the types and exchanges intraday at market price, which may be
number of investment opportunities available greater or less than net asset value). However, there
to the fund and, as a result, the fund may are several key differences between active mutual
underperform other funds that do not have an funds and exchange traded funds. First, shares of
ESG focus. A fund’s ESG investment strategy may ETFs are not individually redeemed from the fund,
74
result in the fund investing in securities or industry which insulates investors from other shareholder
sectors that underperform the market as a whole activities. Mutual funds are accessed directly from
E or underperform other funds screened for ESG the fund company or through a select broker that
S
O standards. has an arrangement with the fund company to sell
P
R their funds. Pricing generally occurs once a day and
U International investing involves risks, including investors buy or redeem shares of the mutual fund at
P

A risks related to foreign currency, limited liquidity, the end-of-day net asset value, less any applicable

H less government regulation and the possibility fees. In addition, most ETFs seek to track a market
T
I of substantial volatility due to adverse political, index, before fees and expenses. The structure of
W
economic or other developments. These risks active and index mutual funds is the same, but the
T
S
E often are heightened for investments in emerging/ management strategy differs in that active mutual
V developing markets and in concentrations of single funds seek to outperform their benchmark while
N
I
countries. the goal of index mutual funds is to track their
index. Finally, transactions in shares of ETFs will
Fixed income risks include interest-rate and credit result in brokerage commissions and will generate
risk. Typically, when interest rates rise, there is a tax consequences. Some mutual funds may charge
corresponding decline in bond values. Credit risk sales loads or redemption fees. Both mutual funds
refers to the possibility that the bond issuer will not and ETFs are obliged to distribute portfolio gains to
be able to make principal and interest payments. shareholders. Certain traditional mutual funds can

Li Ì>Ý ivwV i Ì >Ã Üi °
ÛiÀÃ wV>Ì > ` >ÃÃiÌ > V>Ì
>Þ Ì «À ÌiVÌ
against market risk or loss of principal. Buying This information should not be relied upon as
and selling shares of ETFs will result in brokerage research, investment advice or a recommendation
commissions. regarding any products, strategies or any security
in particular. This material is strictly for illustrative,
Õ `Ã Ì >Ì V Vi ÌÀ>Ìi ÛiÃÌ
i Ìà ëiV wV educational or informational purposes and is subject
industries, sectors, markets or asset classes may to change.
underperform or be more volatile than other
industries, sectors, markets or asset classes than the The iShares Funds are distributed by BlackRock
general securities market. ÛiÃÌ
i ÌÃ]
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“BlackRock”). The iShares Funds are not sponsored,
When comparing stocks or bonds and iShares endorsed, issued, sold or promoted by MSCI Inc.,
Funds, it should be remembered that management nor does this company make any representation
fees associated with fund investments, like iShares regarding the advisability of investing in the Funds.
Funds, are not borne by investors in individual >V , V Ã Ì >vw >Ìi` Ü Ì -
V°
stocks or bonds.
iSHARES and BLACKROCK are registered
Investment comparisons are for illustrative purposes trademarks of BlackRock. All other marks are the

only. To better understand the similarities and property of their respective owners.
differences between investments, including
investment objectives, risks, fees and expenses, it is ICRMH1019U-963544
important to read the products’ prospectuses. ETFs
combine features of both mutual funds (they hold a






N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M

SHAPE YOUR





FINANCIAL FUTURE






WHILE SHAPING





THE FUTURE.



From robotics to sustainability, you can build a portfolio
with ETFs that target what matters most to you.



Invest in something bigger.








































Visit www.iShares.com to view a prospectus, which includes investment objectives,
risks, fees, expenses and other information that you should read and consider careful-
ly before investing. Risks include principal loss. BlackRock Investments, LLC, distribu-
tor. ©2019 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered
ı
İı İ
ƁƀƁƉ ŠƉƆƇƃƂƈ

THE LIST — THE JUST 100













76 76

THE HOST










WITH











THE MOST

























WITH HIS ACQUISITION OF STARWOOD THREE YEARS AGO, ARNE SORENSON

CREATED THE WORLD’S LARGEST HOTEL EMPIRE. GLOBALLY, 20% OF
NEW HOTEL ROOMS BEING BUILT ARE NOW MARRIOTT PROPERTIES—AND
SORENSON STILL THINKS HIS COMPANY ISN’T BIG ENOUGH.











ARNE SORENSON WAS EITHER OUT OF HIS MIND OR MAKING THE BEST MOVE OF HIS CAREER WHEN HE picked up
the phone in October 2015 and dialed Bill Marriott. The octogenarian patriarch of the hotel empire had anointed So-
renson as Marriott’s CEO just three years earlier, the first time someone from outside the family had led the 92-year-
old firm. Now Sorenson was going to propose something crazy: Spend $13.6 billion to buy rival Starwood Hotels, which
ran upscale chains like the W, St. Regis and Le Meridien. This at a time when Marriott’s market cap was just $20 bil-
lion and traditional hotels were fighting a furious rearguard action against internet upstarts like Airbnb and Vrbo.
“It was obvious he was thinking, Oh, my God, are you kidding? A $13 billion deal?” Sorenson recalls. “Everything’s going




BY BIZ CARSON PHOTOGRAPH BY AARON KOTOWSKI FOR FORBES


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

77 77



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E

L
I
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N O V E M B E R 3 0 , 2 0 1 9 F O R B E S . C O M

so well already, why would you add this to it?” tional travel to the U.S.
But Sorenson couldn’t shake the idea of add- All those pale next to Sorenson’s most personal
ing Starwood’s 11 brands, including Westin and challenge yet: Stage 2 pancreatic cancer. In late
Sheraton, to Marriott, which would create the August, a week after finishing his chemothera-
largest hotel company in the world. When the py treatments, Sorenson says his hair is a little
former lawyer sat down with Bill Marriott to re- thinner and his form trimmer. “My barber says
view financial models four days later, he was per- don’t shave it because there’s a lot of guys who
suasive. Marriott signed off. do comb-overs,” he says with a laugh. For a man
78 The rise of Airbnb and changing tastes in trav- used to spending 200 days a year in Marriotts on
el among Millennials, favoring Instagram charm the road, one of the biggest changes has been his
over cookie-cutter predictability, risked making decision to stick closer to home, both to protect
0
0 hoteliers irrelevant. Marriott under Sorenson his health following radiation treatment and to
1
has been anything but. The company’s footprint be nearby for surgery in November.
T
S has doubled during his tenure to more than 1.3 “I don’t want to be a cancer CEO. I don’t think
U
J million rooms. Its revenue topped $20 billion in of myself as a cancer CEO,” Sorenson says. “I am

E 2018, up 62% over five years. Postulate that Air- optimistic, but I am also very aware of the signif-
H
T bnb is an industry killer and Sorenson, 61, quick- icance of the diagnosis that I’m confronting.”

— ly points out that Marriott’s revenues per avail- The Minnesota native got into the hotel busi-

T
S ness when John Willard “Bill” Marriott Jr., the
I
L son of the hotel chain’s founder, plucked him

E from a D.C. law firm in 1996 after he represented
H
T the company in a lawsuit. Known as a good lis-
tener who will “quibble” over something if he dis-
agrees, Sorenson proved the perfect understudy,
moving up from head of M&A to chief financial
officer in just two years. By 2003 he was the pres-
ident of Marriott in Europe. Six years later, he
was named president and chief operating officer.
Sorenson was not only a competent executive; he
also shared important values with the devoutly
Mormon Marriott family. Sorenson was born in
Tokyo to Lutheran missionary parents, and faith
was a cornerstone of his upbringing.
That connection was key when Bill Marriott
Bedtime Story
abandoned his first plan, to pass the business
Bill Marriott, seen with sons Stephen, David and John in 2004, built his family
empire on acute attention to detail, like the right way to change a bed. directly to one of his four children. His eldest
son, Stephen, died in 2013 from a health con-
able room have grown in each quarter for the last dition that had left him blind and mostly deaf.
five years. “Is that the death of hotels?” he says, Daughter Deborah Marriott Harrison left Marri-
the corners of his mouth curling into a smile. “I ott to raise a family in the 1990s and rejoined in
don’t think so.” 2006 in its government affairs office; she is now
Investors can also smirk—Marriott’s shares a board member.
are up 226% since Sorenson took over in March Another son, John Marriott III, followed his
2012, besting competitors like Hyatt (up 69%) father’s footsteps into the business, rising from
and Hilton (up 117% since its 2013 IPO) and hotel cook to operations exec. But he also battled
crushing the S&P 500 (up 113%). That market a drug and alcohol problem. By 2005 his father
performance, plus its reputation for job creation had decided he wouldn’t succeed him. David, 12
(it has 730,000 workers), alongside sustainabil- years younger than John and in his 30s when So-
ity efforts like the decision to stop offering sin- renson took charge, is now the chief operations
gle-use plastic toiletries, powered Marriott’s re- officer for the eastern region of the Americas.
turn to Forbes’ Just 100 list of America’s best cor- Bill Marriott trained Sorenson in the family’s
porate citizens this year. ways, including a willingness to take risks and ad-
But despite the plaudits, last year was rocky herence to the family motto, “Success is never fi-
for Sorenson. Marriott discovered a massive nal.” Even now, the 87-year-old board chairman
data breach in Starwood’s systems, leading to a likes to call Sorenson from New Hampshire and
$126 million fine. Strikes in the U.S. over work- talk about the business, particularly after hearing MATT HOUSTON/AP
ers’ wages cut into its 2018 revenue, and Trump’s an earnings report. “I think we’re similarly driven
xenophobic rhetoric caused a slump in interna- toward winning, similarly driven toward making


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9



sound decisions,” Sorenson says.
The Starwood deal proved to be a game changer, deci-
sively vaulting the company past Hilton. Just over half of
Marriott’s 7,100 hotels are franchised, meaning owners pay
4% to 6% of each hotel’s room revenue (plus an extra 2% to JUST 100
3% of food and beverage sales) to use the Marriott name,
loyalty program and customer service. The remainder of its
hotels pay extra for the privilege of having Marriott manage
80 their property. If the managed properties outperform, Mar-
riott takes another cut. For hotels in Asia and Latin Amer- SHAREHOLDER RETURNS MEAN NOTHING
ica, that amounts to around 7% to 9% of profit. For U.S. IF A COMPANY’S WORKERS, CUSTOMERS,
0 COMMUNITIES AND ENVIRONMENTS AREN’T
0 properties it manages, Marriott pays a guaranteed sum to
1 CONSIDERED TOO. THAT’S THE REASONING
the hotel owner first and then takes as much as 25% of its
T UNDERLYING THE THIRD ANNUAL JUST 100,
S remaining cash flow. (Marriott avoids the pitfalls of taking OUR RANKING OF AMERICA’S BEST CORPORATE
U
J on too much real estate: It owns only 14 properties world- CITIZENS WITH OUR RESEARCH PARTNER JUST

E wide and leases another 49.) CAPITAL. OF THE 922 LARGEST PUBLICLY TRADED
H COMPANIES IN THE U.S., THESE NAMES SET THE
T “The deep dark secret is he is a deal junkie. He loves deals,
STANDARD IN STAKEHOLDER TREATMENT.
— and he loves winning competitive deals,” says Tony Capua-

T EDITED BY MAGGIE MCGRATH
S no, Marriott’s chief global development officer. “Two thou-
I
L sand eighteen was the seventh straight year of record deal

E production for the company, and I don’t think it’s any co-
H
T incidence that that sort of lines up with the time that Arne
TREATMENT
has been CEO.” ENVIRONMENTAL SHAREHOLDER
Sorenson’s best idea to tie it all together so far is Marriott WORKER TREATMENT CUSTOMER TREATMENT COMMUNITY TREATMENT TREATMENT
Bonvoy, a loyalty program, meant to draw in frequent trav-
elers and reward them for staying at Marriott’s 30 brands.
Company CEO = INDUSTRY LEADER
The program is popular: Bonvoy members booked around
50% of Marriott’s hotel nights last year. “The rewards pro- 1. Microsoft SATYA NADELLA
gram, based on dollars spent, already delivers about a 6%- 3 3 13 9 38
to-7% return when the points are redeemed, better than a
lot of credit card returns,” Sorenson says. 2. Nvidia JENSEN HUANG
The more customers stay at Marriott chains like Aloft 1 312 158 15 58
Hotels—or use their reward points on other stuff like rental 3. Apple TIM COOK
cars or a soon-to-launch Ritz-Carlton cruise line—the more
78 1 6 2 347
property developers want to put the Marriott name on their
hotels. Today around 20% of new hotel rooms being built 4. Intel ROBERT SWAN
around the globe are Marriott. “It just keeps feeding on it- 37 5 19 4 36
self. The bigger you are, the better your opportunity is going 5. Salesforce MARC BENIOFF
to be,” says Wes Golladay, an analyst with RBC. 2 213 111 49 221
One ongoing concern: Travelers who book stays through
Expedia or Kayak generate less revenue for Marriott and 6. Alphabet LARRY PAGE
don’t feed its Bonvoy flywheel. So far, these booking-site chal- 9 15 27 8 480
lenges have been manageable, but Sorenson is wary about
7. Anthem GAIL BOUDREAUX
what will happen if Google or Amazon gets into the game.
33 141 36 101 2
“When Amazon surfaced, what I convinced myself was
that we’re in a different place from retail, generally, because 8. PayPal DAN SCHULMAN
you can’t ship a night’s stay to somebody in a box,” Sorenson 6 12 225 92 219
says. But now “it’s clear that it’s not enough of a defense.”
9. P&G DAVID TAYLOR
His strategy is to bulk up: “I want to be as big as possible.”
19 13 155 44 23
As Sorenson deals with his cancer treatments, his team
has taken some meetings off his calendar. But that’s only 10. VMware PAT GELSINGER
freed up time for the master dealmaker to make his next 4 71 304 10 610
move. On a sticky summer morning in Washington, D.C.,
11. Cisco CHUCK ROBBINS
Sorenson surveys the nation’s capital from the rooftop
lounge of the W Hotel on 15th Street. He points out the 13 116 106 48 220
Washington Monument and the White House. Asked how 12. Intuit SASAN GOODARZI
many Marriotts he can count in the city skyline as he looks 7 418 125 28 311
out, Sorenson simply grins and says: “Not enough.”


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

SEE WHERE FIRST RESPONDERS

NEED TO RESPOND FIRST.


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relief organizations turn to Esri location technology to
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Worker Treatment
TREATMENT
For the third year in a row, Nvidia has outpaced the ENVIRONMENTAL SHAREHOLDER
rest of the Just 100 in how it treats its employees, WORKER TREATMENT CUSTOMER TREATMENT COMMUNITY TREATMENT TREATMENT
thanks to programs like same-sex health insurance
coverage in every country where it operates (and is
legal) and unlimited adoption coverage for all em-
ployees. “We wanted an equitable approach,” says 13. The Hartford CHRISTOPHER SWIFT
Beau Davidson, the semiconductor producer’s VP
of employee experience. “We didn’t want to make 34 245 122 109 4
Jensen Huang an unintended value statement that one way of 14. Workday ANEEL BHUSRI
CEO, Nvidia building your family is better than another.”
82 5 313 257 1 660

15. Edwards MICHAEL MUSSALLEM
0
0 20 26 256 98 76
1

T 16. Keysight RON NERSESIAN
S
U Spotlight 31 164 53 47 169
J

E 17. Hewlett Packard Enterprise ANTONIO NERI
H
T 135 7 58 20 127
WHY AMD IS BETTING ITS CHIPS ON EFFICIENCY.
—
18. GM MARY BARRA
T
S
I 57 131 38 482 3
L

E 19. Verizon HANS VESTBERG
H
T 43 322 18 192 103
20. IBM GINNI ROMETTY
80 59 37 65 213

21. Symantec RICHARD S. HILL
30 36 75 54 742

22. Adobe SHANTANU NARAYEN
16 31 346 37 670
23. AT&T RANDALL STEPHENSON

194 75 12 382 30
24. Agilent MIKE MCMULLEN
60 78 116 51 329

25. Accenture JULIE SWEET
46 498 333 25 27

26. Eversource JAMES JUDGE
90 43 154 137 153
27. Exelon CHRISTOPHER M. CRANE

48 546 119 253 31
28. Boston Scientific MICHAEL MAHONEY
24 863 146 57 107

Chipmaker AMD has been gaining ground in its fight against 29. Xylem PATRICK DECKER
Intel for market share, and a key weapon is its new Ryzen proces-
253 143 152 16 10
sor. Early reviews say the chip has been beating Intel core proces-
sors in recent tests and, crucially, is 25 times more efficient than 30. Biogen MICHEL VOUNATSOS
its other processors. “At AMD, we’re all about building great prod- 41 282 202 94 392
ucts that can change the world for the better,” says CEO Lisa Su,
who has tasked engineers with improving the energy efficiency of 31. Kimberly-Clark MICHAEL D. HSU
all products. That’s an environmental commitment that has helped 171 58 76 241 67 ILLUSTRATIONS BY CRANIO DSGN FOR FORBES
the chipmaker rise in the Just 100 rankings, from No. 89 two years
ago to No. 65 this year. “It’s equally important that we as a com- METHODOLOGY: Forbes partnered with Just Capital to rigorously evaluate
922 of the nation’s largest publicly traded companies (the Russell 1000 minus
pany have a positive impact on the communities in which we op- REITs and pending mergers). Just Capital pulls data from public reports, com-
erate and on the world in which we live,” Su says. “It’s important to pany surveys and crowdsourced repositories and, using a team of data sci-
entists and statisticians, weighs that data based on what a survey of 95,000
me as CEO, and I know it’s important to AMD employees around Americans indicate are the most important aspects of business behavior:
worker treatment (35% weighting), customer treatment (24%), community
the world.” support (18%), environmental impact (11%) and leadership behavior (11%).


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

“First Republic really helped us

navigate the financial waters of a new business.”



PELOTON

John Foley, Co-Founder and CEO (seated left); Graham Stanton, Co-Founder (seated right)

Tom Cortese, Co-Founder (standing left); Yony Feng, Co-Founder (standing right)





















(855) 886-4824 | Ŕrstrepublic.com | New York Stock Exchange symbol: FRC

MEMBER FDIC AND EQUAL HOUSING LENDER

TREATMENT
TREATMENT
TREATMENT
5
487
120
240
190
WORKER TREATMENT CUSTOMER TREATMENT COMMUNITY ENVIRONMENTAL SHAREHOLDER 41. Lockheed Martin MARILLYN HEWSON 292
42. Sempra Energy JEFFREY MARTIN
67
318
156
142
32. CBRE BOB SULENTIC 43. Freeport-McMoRan RICHARD ADKERSON
184 298 74 125 22 115 274 96 514 20
33. Akamai TOM LEIGHTON 44. NetApp GEORGE KURIAN
84 Tim Cook
44 62 399 68 410 CEO, Apple 69 14 447 264 234
34. Juniper Networks RAMI RAHIM Customer Treatment 45. Prudential CHARLES LOWREY
0
0 18 79 189 305 744 With many of its Sil- 119 344 103 164 111
1
icon Valley peers
T 35. Pure Storage CHARLES GIANCARLO under fire for pri- 46. Baxter JOSÉ ALMEIDA
S
U vacy breaches and
J 22 9 457 416 573 plummeting consum- 319 21 59 29 285
er trust, Apple has
E 47. Synchrony Financial MARGARET KEANE
H 36. Autodesk ANDREW ANAGNOST taken a different tack,
T strengthening what
15 191 686 12 646 was already an im- 68 246 376 391 19
—
pressive approach to
T 37. Principal DAN HOUSTON 48. Texas Instruments RICH TEMPLETON
S data security. It pub-
I 160 234 186 31 73 lishes biannual reports 124 236 211 128 72
L
on the volume of cus-
E tomer-data requests
H 38. Visa ALFRED KELLY, JR. received from gov- 49. T-Mobile JOHN LEGERE
T
52 707 226 108 61 ernments around the 89 319 29 153 741
world, and a recent
39. Varian DOW R. WILSON update to its mobile 50. Raytheon THOMAS KENNEDY
software added a pri-
50 169 327 95 316 vacy icon—two people 26 283 590 110 206
shaking hands—to in-
40. Merck KEN FRAZIER dicate when an app is 51. Travelers ALAN SCHNITZER
collecting personal in-
86 512 145 76 135 54 157 140 448 346
formation.









Spotlight
WAY TO GROW


WITH ITS PROSPERITY
HUBS, INTUIT EMPOWERS
UNDERSERVED COMMUNITIES.

Intuit has been investing in what it calls
“prosperity hubs” in small towns in West
Virginia, Kentucky, Tennessee and else-
where. The company trains workers there
in supporting QuickBooks, TurboTax and
Mint, creating a virtuous cycle: The work-
ers get paid above market-rate salaries
and spur economic growth in rural Amer-
ica. “We’re on a mission to power pros-
perity around the world, especially for
those who need it most,” says CEO Sasan
Goodarzi. “We can create a profound
ripple effect that inspires even great-
er impact on the world around us.” The
program has already created 1,500 jobs,
and the company says it will create 1,500
more as it expands to new places and
new underrepresented groups, including
military families.



F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

YOUR CARE AND COMPASSION MAKE THIS RESCUE HAPPEN.

HEALING

HOPE
























































Mediterranean Sea 2017 © Maud Veith/SOS Méditerranée


South Sudan 2017 © Frederic NOY/COSMOS



















Bangladesh 2018 © Vincenzo Livieri






OUR TEAMS ARE SAVING LIVES EVERY DAY.


GIVE AT DOCTORSWITHOUTBORDERS.ORG

TREATMENT
TREATMENT
TREATMENT
WORKER TREATMENT CUSTOMER TREATMENT COMMUNITY ENVIRONMENTAL SHAREHOLDER Spotlight
SEEING IT THROUGH
BOSTON SCIENTIFIC EMPHASIZES DIVERSITY AND
SUSTAINABILITY—WITH TRANSPARENCY.
52. BlackRock LARRY FINK
25 230 440 282 323

53. Etsy JOSH SILVERMAN
86 85 27 312 55 710

54. Clorox BENNO DORER
0 147 247 216 70 123
0
1
55. Amgen ROBERT BRADWAY
T
S
U 99 427 201 40 341
J

E 56. Hasbro BRIAN GOLDNER
H
T 438 77 50 6 83

—
57. PepsiCo RAMON LAGUARTA
T
S 277 432 11 286 185
I
L

E 58. Northrop Grumman KATHY WARDEN
H
T 133 509 94 179 114
59. Dominion Energy THOMAS FARRELL
127 271 79 627 29
60. BD VINCENT FORLENZA
316 92 93 60 84

61. HP ENRIQUE LORES
678 4 81 13 11

62. T. Rowe Price WILLIAM STROMBERG
151 165 354 181 45
In recent years, Boston Scientific has made a big push to increase
63. Analog Devices VINCENT ROCHE
transparency about its efforts at diversity and inclusion and en-
143 220 176 53 431 vironmental protection—and that transparency is key to its high
debut on the 2020 Just 100. The medical device company has pub-
64. Rockwell Automation BLAKE MORET
licly committed to using 100% renewable electricity by 2024 and
131 486 86 121 338
having 40% of its supervisors and managers women by 2020 (at
65. AMD LISA SU 38% as of 2018, it’s ahead of schedule). “By consistently report-
ing on our progress toward those targets, we’re putting a stake in
211 129 269 27 215
the ground. It’s a way to say, ‘Yes, this issue is a priority, and we’re
66. Lincoln Financial Group DENNIS GLASS accountable for the behavior change needed to deliver on this
195 109 101 111 400 promise,’ ” says CEO Michael Mahoney. “We believe in pushing
ourselves further year over year.”
67. Ford JIM HACKETT
246 332 26 140 387

68. Maxim Integrated TUNÇ DOLUCA
258 291 135 34 129
Community treatment:
69. Capital One RICHARD FAIRBANK
As the global population booms and cities grow
83 633 219 5 704
more congested, making quick deliveries gets hard-
er for UPS. The logistics giant’s solution? Data anal-
70. JPMorgan Chase JAMIE DIMON
ysis to reduce drivers’ mileage on the road and the
75 889 65 67 224 replacement of trucks with Tuk Tuk-like bikes that
have already debuted in Dublin and Hamburg. These
71. Bank of America BRIAN MOYNIHAN ideas “started with city officials in Europe choosing
to impose access restrictions because of air quali-
81 899 39 26 383
ty,” says Peter Harris, UPS’s international sustainabili- JEFF WHEELER/NEWSCOM
72. Regeneron LEONARD SCHLEIFER David Abney ty director. But, he adds, these programs do far more
CEO, UPS for UPS: “The public connects with it—they see the
182 355 223 190 47 benefits from getting vehicles off the road.”



F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

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Spotlight
CRAFT

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INSIDE ETSY’S DIY
STANDARDS FOR GOOD
CORPORATE GOVERNANCE.

Etsy gave up its chance to be a certi-
88 fied B Corp (meaning one that meets
the highest standards in environmen-
tal and social good) so as not to lose
0 freedom and flexibility in what it does,
0
1 but it’s a new member of the Just 100

T anyway. It got there because it has a
S
U carbon-offset program at checkout for
J
customers and because women make
E
H up 87% of its merchants and 33% of
T
its engineering team, among other
—
reasons. “We’re working hard to prove
T
S that we can be a great citizen and be
I
L a great company at the same time,”

E says Etsy CEO Josh Silverman. “And
H candidly, if you can’t do both, where
T
are we as a society? It’s a pretty fatal-
istic thought that you can’t be a profit-
able and good company.”










TREATMENT
TREATMENT
TREATMENT
202
77
348
WORKER TREATMENT CUSTOMER TREATMENT COMMUNITY ENVIRONMENTAL SHAREHOLDER 82. ADP CARLOS RODRIGUEZ 172 256
83. Ciena GARY SMITH
91 174 368 173 444
73. Vertex JEFFREY LEIDEN 84. American Express STEPHEN SQUERI
110 232 393 160 147 Gail Boudreaux 137 751 237 35 183
CEO, Anthem
74. PSEG RALPH IZZO 85. General Mills JEFF HARMENING
150 292 132 281 182 Shareholder 307 140 247 200 14
treatment:
75. Amazon JEFF BEZOS Since health insur- 86. Hershey MICHELE BUCK
ance industry vet Gail
273 28 98 235 278 172 44 465 252 69
Boudreaux took over
as Anthem’s chief
76. Apache JOHN CHRISTMANN IV 87. First Horizon BRYAN JORDAN
executive in 2017, the
62 747 316 574 18 stock has popped 72 467 360 577 50
20%. With experi-
77. Twilio JEFF LAWSON ence turning around 88. Humana BRUCE BROUSSARD
United Healthcare’s
12 34 648 669 743 core business—under 261 128 114 151 231
her time as its CEO
78. Illumina FRANCIS DESOUZA she took enrollments 89. Equinix CHARLES J. MEYERS
from a 4% decline to
27 251 575 346 366 4% growth—she’s got- 40 406 761 30 481
ten plaudits from Wall
79. Nielsen DAVID KENNY 90. Con Edison JOHN MCAVOY
Street and her peers
alike. “Gail has a
252 122 245 156 54 84 114 481 510 128
passion for improving
healthcare outcomes
80. Deere SAMUEL R. ALLEN 91. UPS DAVID ABNEY
while lowering the DAVID PAUL MORRIS/BLOOMBERG
98 29 620 215 283 cost of care and 816 6 3 103 57
making it more acces-
81. CDW CHRISTINE LEAHY sible,” says Elizabeth 92. JLL CHRISTIAN ULBRICH
Tallett, the chair of
207 33 222 262 248 Anthem’s board. 157 602 179 90 214



F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9



Spotlight
TREATMENT
TREATMENT
TREATMENT
RAISING THE BAR TREATMENT CUSTOMER TREATMENT COMMUNITY ENVIRONMENTAL SHAREHOLDER
HOW PLANTING MORE TREES WORKER
IS A SWEET VICTORY FOR HERSHEY.

93. Starbucks KEVIN JOHNSON
481 382 35 19 74
94. UnitedHealth DAVID WICHMANN
90 284 715 15 260 197

95. Citrix DAVID HENSHALL
0
0 107 167 166 331 596
1

T 96. HubSpot BRIAN HALLIGAN
S
U 10 212 792 677 560
J

E 97. GE LARRY CULP, JR.
H
T 191 24 47 881 186

—
98. Cummins TOM LINEBARGER
T
S
I 299 549 57 74 155
L

E 99. Whirlpool MARC BITZER
H
T 251 18 395 178 222
100. Marriott ARNE SORENSON
Without fruitful cocoa farms, Hershey’s product lines would run
dry, so the confectionary giant has committed to having no new 291 395 14 130 698
deforestation in its supply chain and spearheading cocoa-for-
est protection efforts in Ghana and Côte d’Ivoire, the two largest
Environmental treatment:
chocolate producers in West Africa. Hershey also plans to give out
Human resources software provider Workday
nearly 1 million trees and 2.5 million cocoa seedlings to the region.
has reached a net-zero carbon emissions rate
“Planting trees not only helps repopulate deforested areas, it also at its offices and data centers, but its environ-
provides direct benefits to farmers through nutrient recycling and mental efforts extend beyond its own walls.
Its 2,800 corporate customers include 40%
moisture conservation,” says CEO Michele Buck. “As a company
of the 500 largest companies in America that
dependent on agricultural ingredients for our iconic products, we
have their own climate impact goals. “We are
know that climate change is an important issue.” helping our customers meet their sustainabili-
Aneel Bhusri ty commitments,” says Erik Hansen, Workday’s
CEO, Workday sustainability director, “by providing them
with a carbon-neutral cloud.”







BOTTOM OF THE BARREL

THIS IS THE OTHER END OF THE “JUST” SPECTRUM: THE BOTTOM 10% OF THE 922 COMPANIES ANALYZED.
HERE ARE THE BUSINESSES THAT COULD LEARN A THING OR TWO FROM THE FOLKS AT THE TOP.

Acadia Healthcare Casey’s General Stores Extended Stay America Kemper Corp. Ollie’s Bargain Outlet TCF Financial Corp.
Altice USA Chemed Corp. Five Below Kirby Corp. O’Reilly Auto Parts Tempur-Pedic
AMERCO Chipotle Mexican Grill FleetCor Technologies Lennar PacWest Bancorp Tesla
American Campus Choice Hotels Floor & Decor Holdings Life Storage Pilgrim’s TransDigm Group
Communities International
Foot Locker Lionsgate Planet Fitness Transocean
American National Cincinnati Financial Frontdoor Entertainment
Insurance Prosperity Bank Trinity Industries
Cinemark Holdings Lyft
Aramark Gaming and Leisure Qurate Retail Group Twenty-First Century
Colfax Properties Match Group Fox
AXIS Capital Ross Stores
CoreLogic Gardner Denver McDonald’s Uber
Beyond Meat Holdings Royal Gold
Diamondback Energy Mednax Wendy’s
BGC Partners GrafTech International ServiceMaster
DISH Network Monster Beverage White Mountains
Bright Horizons Hain Celestial Group Silgan Holdings Insurance Group
Dollar General MSG Networks
Bruker Hawaiian Electric Sinclair Broadcast Williams-Sonoma
Dollar Tree Industries Mylan Group
Burlington Stores W.R. Grace & Co.
Domino’s Pizza New York Community Six Flags Entertainment
Cabot Oil & Gas Herbalife Bank
EchoStar Skechers USA
Cantel Medical Corp. Hospitality Properties Newell Brands
Element Solutions Trust Spectrum Brands RICHARD DREW-AP
Capri Holdings Nexstar Media Group Holdings
Empire State Realty ICU Medical
Carnival Old Republic Sprouts Farmers Market
Euronet Worldwide IAC
International Corp.
F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9



THE TREND














92 O

I
O O
I I O I I
O O

I I

O I O $ O I O

I I
O O

I I O I I
O O
I

O






D A W N O F T H E



N E O B A N K S








P R E T T Y M U C H A N YO N E W I T H

H A L F A M I L L I O N B U C K S A N D A

H I G H - S P E E D C O N N E C T I O N C A N

S TA R T A B A N K T H E S E D AY S .
D O Z E N S O F D I G I TA L B A N K S A R E

A L R E A DY O P E N F O R B U S I N E S S —

A N D V C S A R E B E T T I N G B I L L I O N S

T H AT T H E Y ’ L L R E P L A C E YO U R

C O R N E R B R A N C H .














BY JEFF KAUFLIN PHOTOGRAPH BY MICHAEL PRINCE FOR FORBES

93














































































Man for All Seasons
MoneyLion founder Dee
Choubey in his Manhattan
offices. “We’ve built one piece
of technology that’s part
CREDIT
bank, part personal-finance
manager, part broker-dealer
and part lender.”

→ “The sky is the limit,” gushes



MoneyLion founder and CEO


94
Dee Choubey as he strolls into


0
5
Manhattan’s Madison Square Park,
H
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N the oak and ash trees turning color in
I
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•
the October sunshine.
D
N
E
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T Choubey, 38, is taking a midday constitutional from MoneyLion’s cramped offices in the Flatiron Dis-

E trict, where 65 people labor to reinvent retail banking for the app generation. He ticks off a couple
H
T businesses he looks up to—ones that have fundamentally changed the way money flows around the
world—putting his ambitions for his six-year-old startup into sharp relief. “PayPal,” he says. “Square.”
Two companies worth a combined $150 billion.


“The promise of MoneyLion is to be the wealth manager, traditional financial services, up from 2,000 just three years
the private bank for the $50,000 household,” Choubey says. ago. In the first nine months of 2019, venture capitalists
At last count, MoneyLion’s app had 5.7 million users, up poured $2.9 billion into neobanks, compared with $2.3 bil-
from 3 million a year ago, and a million of those are paying lion in all of 2018, reports CB Insights.
customers. Those people, many from places like Texas and Underlying this explosion is new infrastructure that
Ohio, fork over $20 per month to maintain a MoneyLion makes starting a neobank cheap and easy, plus a rising
checking account, monitor their credit score or get a small generation that prefers to do everything from their phones.
low-interest loan. In all, MoneyLion offers seven financial While it can take years and millions in legal and other costs
products, including unexpected ones like paycheck advanc- to launch a real bank, new plug-and-play applications en-
es and, soon, brokerage services. Choubey expects revenue able a startup to hook up to products supplied by traditional
of $90 million this year, triple last year’s $30 million. His banks and launch with as little as $500,000 in capital.
last round of financing, when he raised $100 million from “Now you can get your [fintech] company off the ground
investors including Princeton, New Jersey-based Edison in a matter of a few months versus a few years,” says Angela
Partners and McLean, Virginia-based Capital One, valued Strange, a general partner at Andreessen Horowitz, who sits
the company at nearly $700 million. By mid-2020, he pre- on the board of Synapse, a San Francisco-based startup whose
dicts, MoneyLion will be breaking even. An FDIC-insured technology makes it easier for other startups to offer bank
high-yield savings account will be rolled out soon, while products.
credit cards are on the schedule for later in 2020. To retain Using such middleman platforms, tiny neobanks can offer
customers, he says, “we have to be a product factory.” big-bank products: savings accounts insured by the FDIC,
Like most other entrepreneurs, Choubey thinks his com- checking accounts with debit cards, ATM access, credit
pany’s potential is essentially unlimited. But having spent a cards, currency transactions and even paper checks. That
decade as an itinerant investment banker at Citi, Goldman, frees fintech entrepreneurs to concentrate on cultivating
Citadel and Barclays, he’s also a guy who knows how far a their niche, no matter how small or quirky.
horizon can realistically stretch. And he is far from the only Take “Dave.” Dave (yep, that’s its real name) is a little app
one to see the opportunity for upstart digital-only banks— that rescues folks from the pain of chronic bank overdraft
so-called neobanks—to transform retail banking and create fees. Created by a 34-year-old serial entrepreneur named
a new generation of Morgans and Mellons. “I just heard a Jason Wilk who had no prior experience in financial servic-
rumor that Chime is getting another round at a $5 billion es, Dave charges its users $1 a month and, if they seem likely
valuation,” he says. to overdraw, instantly deposits up to $75 as an advance. Nice
Globally, a vast army of neobanks are targeting all sorts little business, but nothing to give Bank of America jitters.
of consumer and small-business niches—from Millennial But then Wilk decided to turn Dave into a neobank. In
investors to dentists and franchise owners. McKinsey esti- June, using Synapse, Dave rolled out its own checking ac-
mates there are 5,000 startups worldwide offering new and count and debit card. Now it can make money on “inter-


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9

Numbers tell



only half the



story.







Your investments


deserve the full story.





















































1
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to examine opportunities fi rsthand—like how e-commerce growth is spurring demand for more innovative
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All funds are subject to market risk, including possible loss of principal.
T. Rowe Price Investment Services, Inc., Distributor.

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Bandwagon
Betterment cofounder Jon Stein at his New York City startup. It took a decade to get 420,000 clients for its robo-advisor business managing stocks and
bonds; as a neobank newcomer, Betterment already has 120,000 on a waiting list for a checking account.


change,” the 1% to 2% fees that retailers get charged when- Morris, a managing partner at QED Investors, an Alexandria,
ever a debit card gets swiped. These fees are split between Virginia-based VC firm specializing in fintech. “[Traditional
banks and debit-card issuers like Dave. Wilk optimistically banks] are really complicated businesses, with complex reg-
predicts Dave will bring in $100 million in revenue this year ulatory issues and consumers who are relatively inert.” But,
from its 4.5 million users—up from $19 million in 2018, the he adds, “If [neobanks] can get people to bundle, [they] can
year before it transformed itself into a neobank. Dave was get more of a share of a wallet of a consumer. [The] econom-
recently valued at $1 billion. ics can move dramatically. It changes the game.”
Established fintech companies that didn’t start out in
banking are getting into the game too. New York-based Bet- iwakar (Dee) Choubey was supposed to
terment, which manages $18 billion in customers’ stock D    be an engineer, not an investment banker.
and bond investments using computer algorithms, recently Born in Ranchi, India, he came to the U.S.
rolled out a high-yield savings account. It pulled in $1 bil- at 4 when his father was finishing a gradu-
lion in deposits in two weeks. “The success has been unprec- ate degree in engineering at Syracuse Uni-
edented. In our history we’ve never grown this fast,” marvels versity. The family ended up in New Jersey. Choubey’s mom
Betterment CEO and cofounder Jon Stein. Now he’s launch- taught autistic children, while his dad worked as an engineer
ing a no-fee checking account with a debit card, and credit at Cisco—and plotted his son’s future.
cards and mortgages might be next, he says. When Choubey started at the University of Chicago in
Neobanks are swiftly emerging as a huge threat to tradi- 1999, he signed up for a bunch of computer science classes
tional banks. McKinsey estimates that by 2025 up to 40% of picked by his dad. But after earning a couple of B-minus-
banks’ collective revenue could be at risk from new digital es, “I cried uncle,” Choubey says. He became an economics FRANCO VOGT FOR FORBES
competition. “I don’t believe there’s going to be a Netflix mo- major, strengthening his grades and job prospects by taking
ment—where Netflix basically leapfrogs Blockbuster—where corporate finance and accounting courses at the business
fintechs basically put the banks out of business,” says Nigel school. After graduating with honors, he went into invest-


F O R B E S . C O M N O V E M B E R 3 0 , 2 0 1 9