The banks are rolling in ca$h after tax reform

Plus: Big paydays at Nucor; Charlotte Magazine finds honest Realtors; Instagram bot threatens influencer jobs?

The Charlotte Ledger

Fresh and real Charlotte business news that makes you smarter. Delivered to your inbox for free three days a week.

Need to subscribe? Sign up here. Like what you see? Forward this email to a friend.

Good morning! Today is Friday, March 22, 2019. Here are today’s big stories in Charlotte-area business news:

Reaping the dividends:

Tax bills are due in a little less than a month, and estimates show most people are going to be paying a little less in taxes because of the new tax reform law.

While personal income taxes were a big part of the law that took effect last year, corporate taxes were an even bigger part. The nominal rate for corporations fell from 35 percent to 21 percent — though a lot of companies pay even less because of deductions and other breaks.

With the data now in for 2018, you might wonder how some of your favorite companies are making out. The answer: they are doing juuuuust fine.

Look, for instance, at an industry that is near and dear to Charlotte: banking. The effective tax rate for the nation’s biggest banks plunged in 2018, according to some quick calculations using publicly disclosed income statements:

Source: Ledger analysis of income statements. 2017 numbers for Citigroup and Goldman Sachs exclude one-time accounting charges related to new federal tax law.

Four out of the five biggest banks reported more cash on hand at the end of 2018 than the end of 2017. The FDIC said last month that largely as a result of the tax law, the aggregate profits at commercial banks and savings institutions more than doubled in the 4Q.

It’s not just banks cashing in, either:

  • Amazon: Tax rate fell from 20.2% in 2017 to 10.6% last year.

  • Starbucks: 33.2% in 2017 —> 21.8% in 2018.

  • Facebook: 22.6% in 2017 —> 12.8% in 2018.

You don’t even have to be the biggest of the big and well-known companies to feel the benefits.

Quotable: “Tax reform has absolutely been a benefit to my corporate clients. Their tax rates were significantly reduced.  They are using their tax savings to invest in their business, make acquisitions and pay down debt.  Some companies have initiated stock buybacks as well.” — Jimmy Greene, tax partner in Charlotte office of law firm Parker Poe, in an interview.

The outlook: Economists tend to credit tax reform with juicing the economy last year, as businesses increased investment — although there is disagreement on exactly how much. There are some signs, though, that the boost is fading. Economic growth is anticipated to slow this year from its high of about 3 percent last year.

Honest Realtors:

Real estate agents are famously bullish on the housing market. Always. To hear them tell it, there’s never a bad time to buy a house.

Charlotte Magazine had a nice feature this week in which it posed questions to local real estate agents. As clickbait headlines say, their answers might surprise you. One even suggested (gasp) not leaping into the Charlotte housing market right now:

Consider renting first. Especially in the current seller’s market, it can relieve the intense pressure they likely feel to select from the “least of the worst” options available in the short timeframe in which they are looking. Also, it lets them get settled in their job and get a feel for what their commute looks like in Charlotte traffic. 

They still recommend that you work with a qualified Realtor, of course, but they also dish on hot neighborhoods and common home-buyer mistakes in a way that seems candid. Full article here.

Tariff cash showers Nucor execs

Nucor’s top brass all got big raises last year, at a time when the Charlotte-based company is almost minting money because of the Trump tariffs on foreign steel. Nucor is one of the country’s biggest steelmakers and has been able to sell its wares at higher-than-usual prices.

John Ferriola, the CEO of the company based in SouthPark, had total compensation of $15.6M last year, up from $12.1M in 2017, according to securities documents filed Friday morning. His top deputies all saw increases of 35% or more, mostly in the form of stock awards. Full details here (at page 37).

For Nucor, revenues rose 24% in 2018. Profits shot up 79%.

Premium airport parking: the new normal?

The Charlotte City Council on Monday is expected to approve a $4.9M contract for the airport to develop a parking reservations system. According the meeting agenda, the council is being asked to approve a five-year contract with a British company called AeroParker to devise and implement a system that will “allow passengers to reserve parking in their chosen parking product prior to their actual trip.”

The airport says it is part of a plan to “enhance the customer experience” — the experience of, uh, parking your car at the airport — and to “promote additional revenue growth.” Naturally.

The bigger picture: As insidious as it sounds to hire a company to improve the “yield management” of airport parking, it could be a smart investment. Nationally, studies are showing that in the age of Uber and Lyft, airport parking might not be the cash cow for airports that it traditionally has been, and simply building more parking might be unwise — to say nothing of what’s possibly a pipe dream of building light rail to the airport. Of course, that means finding ways for more of us to spend more money on airport parking — like on premium services such as reserving spots ahead of time.

Bonus question: Will airport parking of today become the “basic economy” class of tomorrow? Will it be tough to find an airport parking place unless we pay a premium for a reserved spot?

Johnny Harris unplugged

Could Amazon have taken root in North Carolina? Could we have had a Silicon Valley filled with tech giants around here? Lincoln Harris CEO Johnny Harris, one of Charlotte’s biggest developers, says yes … if it weren’t for short-sighted leadership in Raleigh, Durham and Chapel Hill.

Harris spoke this week to Business North Carolina, and this passage caught our eye:

“the single dumbest thing that has happened in North Carolina” [is] the Triangle’s failure to develop commuter rail between Durham, Raleigh and Chapel Hill. “The Triangle could have been the Silicon Valley of the East and nobody could have touched them. … You would have had Amazon in the Triangle.”

Not a real help desk

A Charlotte man pleaded guilty this week to participating in a $3M conspiracy to trick computer users into paying for unneeded tech support from a call center in New Delhi, India. Bishap Mittal helped run a company called Capstone Technologies out of a house in Mallard Creek.

According to his indictment, Mittal and others purchased pop-up ads through Google and Bing that “misrepresented various computer infirmities to delude victims into purchasing unnecessary tech-support services”:

A script for the call center employees encouraged them to misleadingly tell victims who had two antivirus applications that the two applications were “contradicting each other.” The script also suggested that the employees misleadingly tell victims that the identification of foreign addresses “may to [sic] show computer compromising.” Furthermore, the script told employees to use Command Prompt tools to generate outputs that would purportedly indicate a “virus found or network infection.”

It’s hard to imagine falling for a scheme like this, in which you would actually reach out to an Indian call center with employees who apparently speak broken English because an ad on your computer told you to. But when you reach a lot of people through internet advertising, some are going to take the bait. Victims’ purchases ranged from $200 to more than $2,400 each. That’s a lot of duped people to get to $3M.


  • Poor house: BB&T CEO Kelly King’s compensation fell 32 percent to $8.6M last year, according to the Winston-Salem Journal. That should still be adequate to buy a house in Myers Park or Eastover when his bank merges with SunTrust and moves its HQ here.

  • Good payday: Duke Energy CEO Lynn Good’s 2018 compensation fell to just under $14M in 2018, a drop from $21.4M a year earlier, the Biz Journal reports. A Duke spokesman told the publication that the truth of the matter is that most of her 2018 compensation ($9.9M) is in the form of stock awards that haven’t vested and are “at risk.” The unstated corollary, of course, is that the stock value could also rise, resulting in a bigger payday than the $14M. (Full exec pay tables here, page 52.)

  • International relations: The Charlotte City Council will vote Monday to appoint a new member to the Charlotte International Cabinet. One of two candidates is Paula Broadwell, the David Petraeus biographer-turned-paramour who now heads a Charlotte media consulting firm. The other option is Gina Esquivel, a nonprofit board member whose biography says she “leads a passionate career for social justice.”

  • SouthPark pay cut: EnPro Industries’ CEO Stephen Macadam took a cut in total compensation to $4.6M last year, down from $5.6M in 2017, according to an SEC filings this week. The industrial products company is based in SouthPark.

  • Grounded: Worldwide Flight Services Express is closing its Charlotte airport facility and laying off 127 workers after losing a contract. It’s the sixth mass layoff in Mecklenburg County this year, according to N.C. Business News Wire.

Food and booze news

A weekly wrap-up of the week’s eating and drinking developments:

Loves me some internet

Being an influencer, we are often told, is hard work. You have to negotiate with all those fashion companies or restaurants, then slave for hours to find the right lighting and filter for an Instagram shot that looks spontaneous and whimsical to your 100,000 followers.

But what if you could avoid all that tedium? That’s what one guy in New York did by creating a bot that reposts stylish photos, then cashing in the inevitable offers for free meals. Here’s Buzzfeed:

[Chris] Buetti, a data scientist by trade, decided to use his actual skills and automate the hard work of influencing by writing a program that recruited an audience of 25,000 (by autofollowing their accounts in hopes of getting a follow back), and reposted photographers’ eye-catching photos of New York City for his growing entourage to engage with (“😍great shot💕,” one person commented).

Poof: @beautiful.newyorkcity was born — an active, popular, and 100% artificial Instagram account. For Buetti, it’s the perfect solution if you don’t want to actually dedicate time to curating an online following, but still want to score free spaghetti from restaurants seeking publicity. His program even finds restaurant accounts in New York, and sends them direct messages offering to promote them to followers in exchange for a comped meal.

That’s some automation we can all rally behind.

Got a news tip? Think we missed something? Drop me a line at and let me know.

Like what we are doing? Feel free to forward this along and to tell a friend.

The Charlotte Ledger is an e-newsletter and web site publishing timely, informative, and interesting local business news and analysis Mondays, Wednesdays, and Fridays, except holidays and as noted. We strive for fairness and accuracy and will correct all known errors. The content reflects the independent editorial judgment of The Charlotte Ledger. Any advertising, paid marketing, or sponsored content will be clearly labeled.

The Charlotte Ledger is published by Tony Mecia, an award-winning former Charlotte Observer business reporter and editor. He lives in Charlotte with his wife and three children.