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<keyword id="19898109" type="General" weightage="100" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>'s parent company, <keyword id="20253123" type="General" weightage="20" keywordseo="One97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One97 Communications" meta.hostid="261" meta.entityid="One97 Communications">One97 Communications</keyword>, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore. Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore. This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis. The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (<keyword id="23641220" type="General" weightage="20" keywordseo="Default-Loss-Guarantee" source="keywords">default loss guarantee</keyword>) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments. "Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today. The company's revenue from its payment business also inched up 9% on a quarterly basis, along with its revenue from <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which also grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter. During the previous quarter, Paytm's <keyword id="20253122" type="General" weightage="20" keywordseo="gross-merchandise-value" source="keywords">gross merchandise value</keyword> (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season. Per its release, Paytm aims to achieve <keyword id="23641219" type="General" weightage="20" keywordseo="EBITDA-profitability" source="keywords">EBITDA profitability</keyword> (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

<ul class="summary-list"><li><keyword id="20781003" type="General" weightage="20" keywordseo="Klarna" source="keywords" meta.keywordsubtype="org" meta.entityname="Klarna" meta.hostid="261" meta.entityid="Klarna">Klarna</keyword> CEO <keyword id="23150803" type="General" weightage="20" keywordseo="Sebastian-Siemiatkowski" source="keywords">Sebastian Siemiatkowski</keyword> said that he plans to reduce the company's workforce by half.</li><li>He said the company can "do much more with less" through <keyword id="19904566" type="General" weightage="20" keywordseo="artificial-intelligence" source="keywords">artificial intelligence</keyword>.</li></ul>Klarna plans to employ half the people it did last year, betting on artificial intelligence to enhance efficiency and cut costs. CEO Sebastian Siemiatkowski said in a statement to the <a href="https://www.ft.com/content/bfd9af3d-d607-4877-9571-078ab82a837e" target="_blank">Financial Times</a> that the company could operate effectively with half its current staff, which numbered about 4,000 at the end of June. Siemiatkowski s<keyword id="19899640" type="General" weightage="20" keywordseo="AI" source="keywords">ai</keyword>d the company can "do much more with less" using AI. The Swedish <keyword id="20050492" type="General" weightage="20" keywordseo="buy-now-pay-later" source="keywords">buy-now-pay-later</keyword> company lost about 24% of its staff in the last year, per its annual report. Spokesman Joel Hedin told Business Insider those losses were "natural attrition" and that with the company's hiring freeze, "headcount is gradually decreasing." Last year, Klarna halted hiring for most positions outside its engineering team as it increasingly relied on AI technology to fill gaps left by departing staff. He added that the marketing team had been more productive, working with half its size compared to the previous year. Last year, Klarna <a target="_blank" href="https://www.businessinsider.com/klarna-ai-chatbot-work-700-people-2024-2">halted</a> hiring for most positions outside its engineering team as it increasingly relied on AI technology to fill gaps left by departing staff. In a February blog <a target="_blank" class="" href="https://www.klarna.com/international/press/klarna-ai-assistant-handles-two-thirds-of-customer-service-chats-in-its-first-month/">post</a>, the company claimed its AI assistant could handle the workload of 700 full-time employees. Klarna said that the chatbot outperformed human agents in "errand resolution" accuracy and matched human employees in customer satisfaction levels. Klarna also projected that this technology could boost the company's profits by $40 million this year. Meanwhile, Klarna competitor Affirm is also doubling down on AI chatbots — but isn't publicly seeking to cut its staff. "No one has yet to lose their job to be replaced by robot at Affirm, so that's not a short-term cost saving," CEO Max Levchin said on a <a target="_blank" class="" href="https://www.businessinsider.com/gen-z-prefers-ai-chatbots-phone-calls-affirm-ceo-bnpl-2024-5">May earnings call</a>, adding that AI could save the company money over the next one to three years. <h2>AI shakes up tech staff</h2>Other tech companies are axing staff as they transition to AI-centric businesses. Earlier this month, <a target="_blank" href="https://www.businessinsider.com/dell-layoffs-ai-strategy-workers-more-effective-jobs-fulfilling-2024-8">Dell</a> announced the significant restructuring of its sales division, resulting in mass layoffs. Tech companies, including Google and Apple, have laid off over 350,000 workers since the beginning of 2023, according to data from online tracker <a target="_blank" href="http://Layoffs.fyi">Layoffs.fyi</a>. While many of these layoffs were attributed to overhiring during the pandemic, the need to reallocate capital for AI investments is also a significant factor for the layoffs. Meta CEO Mark Zuckerberg <a target="_blank" href="https://www.businessinsider.com/ai-job-losses-spending-new-tech-meta-google-amazon-layoffs-2024-7">said</a> in a February earnings call that layoffs were necessary to invest in "long-term, ambitious visions around AI." Google CEO Sundar Pichai also <a target="_blank" href="https://www.businessinsider.com/google-ceo-says-more-layoffs-to-come-2024-1">wrote</a> in a January memo that job cuts were needed to "create the capacity for investment" in AI. Klarna had credited an improvement in its <keyword id="20088085" type="General" weightage="20" keywordseo="financial-performance" source="keywords">financial performance</keyword> to AI, with net losses declining from 854 million Swedish Krona, around $84 million, during the second quarter of 2023, to 10 million Krona, around $900,000, in the most recent quarter. The company also reported a 27% increase in revenue and a 73% increase in revenue per employee over 12 months. Klarna is gearing up for an <keyword id="19913114" type="General" weightage="20" keywordseo="initial-public-offering" source="keywords">initial public offering</keyword> as early as next year, although Siemiatkowski told the FT that the company has not made any IPO decisions yet. Klarna did not respond to a request for comment by BI sent outside standard business hours. Correction: August 28, 2024 — This story has been updated with a more exact headcount change and to specify why Klarna lost staff in the last year. After publication, a Klarna representative told Business Insider that the loss — about 24% of staff — came from natural attrition.

Klarna only needs half its staff, because AI lets the buy-now-pay-later company 'do much more with less'

<keyword id="19955648" type="General" weightage="20" keywordseo="Adani-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="Adani Group" meta.hostid="261" meta.entityid="Adani Group">Adani Group</keyword> released the composite result and Credit Compendium of Adani Group of <keyword id="20027214" type="General" weightage="20" keywordseo="companies" source="keywords">companies</keyword> for Q1 FY25. The Results Compendium provides a comprehensive overview of the <keyword id="20088085" type="General" weightage="20" keywordseo="financial-performance" source="keywords">financial performance</keyword> of the Adani Portfolio, while the Credit Compendium offers in-depth insights into the portfolio's robust credit strength. According to the results, the strong performance for the quarter was led by <keyword id="20113873" type="General" weightage="20" keywordseo="Adani-Enterprises" source="keywords" meta.keywordsubtype="org" meta.entityname="Adani Enterprises" meta.hostid="261" meta.entityid="Adani Enterprises">Adani Enterprises</keyword>' emerging businesses, including solar and wind manufacturing. In a press release, the company stated that it has emerged as India's largest player in the fully integrated <keyword id="19990484" type="General" weightage="20" keywordseo="green-hydrogen" source="keywords">green hydrogen</keyword> chain, as well as in the airports and roads sectors. The company added that AEL's infrastructure businesses' steadily rising contribution is playing a significant role in this growth, with <keyword id="19957744" type="General" weightage="20" keywordseo="EBITDA" source="keywords">EBITDA</keyword> expanding by 69.98 per cent YoY. These fast-growing businesses now contribute 13.3 per cent to the portfolio-level EBITDA, up from 7.2 per cent a year ago. The overall EBITDA of Adani Group companies surged by 32.87 per cent year-on-year (YoY) to reach Rs 22,570 crore, resulting in a trailing twelve-month (TTM) EBITDA of Rs 79,180 crore, marking a 45.13 per cent increase over the corresponding TTM of the previous year. The Adani Group highlighted that its 'Core Infrastructure' platform comprises AEL's (Adani Enterprises) Infrastructure businesses, Utility (Adani Green Energy, Adani Power, Adani Energy Solutions, and Adani Total Gas), and Transport (Adani Ports &amp; SEZ) businesses. The Solar module manufacturing business of the group saw module sales rise by 125 per cent YoY in the quarter. Furthermore, the operationalization of photovoltaic cell lines lowered costs, resulting in higher profitability. The airport business also continues to see strong growth from rising passenger movement, increasing consumer offerings, and the addition of routes, airlines, and flights across seven operational airports. Adani Enterprises' performance indicates that in airports, the annual passenger movement across 7 airports crossed 90 million for the first time. During the quarter, eight new routes, six new airlines, and 13 new flights were added across all seven airports. Additionally, 25 new brands were introduced at Lucknow airport after the inauguration of Terminal 3. The road business achieved its highest-ever 730 lane-km construction during this quarter. In the Adani Green Energy segment, construction work for a 500 MW hydro pump storage has commenced, with a 31 per cent YoY capacity addition during the quarter. Another 250 MW wind capacity was operationalized in July at Khavda, bringing the total capacity to 11.2 GW. Adani Energy Solutions stated that the Khavda-Bhuj Transmission Line (KBTL) is fully commissioned, enabling 3 GW green power evacuation from Khavda. The 1,765 ckm Warora Kurnool Transmission Line (WKTL) was also fully commissioned, strengthening the national grid by ensuring seamless power flow between the western and southern regions. Adani Ports &amp; SEZ reported that Vizhinjam port, India's first transhipment port equipped with South Asia's most advanced container-handling technology, was formally commissioned in July and will become operational in November. In the Cements segment, the promoters infused Rs 15,000 crore in two tranches in Ambuja Cements in March and April, fully subscribing to the warrant program and infusing a total of Rs 20,000 crore since the acquisition in September 2022. The company also acquired Penna Cement, increasing the total capacity to 89 MTPA. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-9-pro-fold-launched-in-india-at-172999-but-you-cant-get-your-hands-on-it-right-now/articleshow/112517193.cms">Google Pixel 9 Pro Fold launched in India at ₹1,72,999, but you can’t get your hands on it right now</a> <a href="https://www.businessinsider.in/stock-market/news/ipo-scam-two-victims-from-hyderabad-lose-over-11crore-in-fake-ipo-scams/articleshow/112488051.cms">IPO scam – Two victims from Hyderabad lose over ₹11 crore in fake IPO scams</a> <a href="https://www.businessinsider.in/tech/news/indias-wearables-market-decline-for-the-first-time-as-smartwatch-shipments-fall/articleshow/112397246.cms">India’s wearables market decline for the first time as smartwatch shipments fall</a>

EBITDA of Adani Group companies surged by 32.87% year-on-year to ₹22,570 crore

The rapid acceleration of change in the workplace — from the boom of generative AI to shifting work models — means leaving behind old ideas of what C-suite leadership looks like.For Business Insider's third Workforce Innovation virtual roundtable, we asked board members how C-suite leaders might have previously led their businesses and how old approaches are giving way to a distinctly new way of executive leadership.Several board members said change needed to happen at every level of an organization, not just on a single team. Now it's up to leaders to harness the potential of their workforce and prepare employees for how they can play an active role in transformations across the business."The reset message here is that no function is exempt," Maggie Hulce, the chief revenue officer at Indeed, said. "Every function can change and should be changing and needs to take accountability and ownership for driving that, versus waiting for a central team to figure everything out."With evolving workplace priorities, the Workforce Innovation board also predicted which new roles might emerge in the C-suite, including "chief transformation officer" and "chief experience officer."The following has been edited for length and clarity.Julia Hood: What's the old way of C-suite leadership, and what's the new way? What is changing for those leading the workforce during this time of transformation?<h2 id="0c6ca21f-d8b4-40db-bb90-e9fb8d56ff2b">Alicia Pittman, chair of global people team, Boston Consulting Group</h2>One of the biggest differences we're seeing and we'll continue to see is that the concept of apprenticeship is becoming truly a two-way street. An old version of apprenticeship is learning the craft step-by-step — like the "Karate Kid" and Mr. Miyagi, based on wisdom and time.Now leaders are also seeing from younger generations how to embrace technology and AI, specifically, how to lead inclusive teams that maybe don't look so much like you, and how to support employees through mental-health challenges and general wellness.I'm seeing that happening in very powerful ways, truly two ways, and up and down. Organizations that embrace that — which are flatter, less formal, and allow for more of that cross-connectivity — are going to benefit as that becomes more the norm in how we craft leadership.<h2 id="f242fb98-9c94-4e5b-8135-1f191d2cb6f3">Neil Murray, CEO, Work Dynamics at JLL</h2>I like the idea that's been coined about leading from behind. The notion is that the old way was about leading leaders top-down, personally owning strategy, P&amp;L, innovation, and culture.Leading from behind has been likened to a shepherd coordinating from behind and creating an environment where people who are willing and able can take initiative and lead innovation. That company culture becomes owned collectively rather than the singular responsibility of the CEO.I don't think that's about a CEO stepping back and allowing mob rule, but rather, it's about harnessing collective genius in the organization.I think the reason for this is that the psychological contract between companies and employees has changed quite dramatically and continues to change. We know that people are looking for more meaning and purpose in their working lives. They expect to be seen. They expect to be valued for who they are and, ultimately, want to be part of and coauthor a company purpose and culture.It also applies to innovation. It's no longer about incremental innovation from a centralized chief product officer. Breakthrough innovation will be key, with consistent breakthrough innovation to sustain competitiveness. From a leadership perspective, that's about creating an environment where those closest to issues and most nimble can lean in and innovate, rather than trying to centralize it.<h2 id="d012677b-737d-445d-84a4-5d9f7a363a82">Kenon Chen, executive vice president of strategy and growth, Clear Capital</h2>When I first saw the GitHub Copilot demo before it was launched, I was struck by the idea of someone with a business use case and business knowledge being able to execute and create a technical solution without going through our typical translation layers, which are business analysts and scrum masters and technical project managers.We now have this huge layer of translators between the business, especially from the C-suite to the people who are creating the innovations or products.What gen AI is leading us to is a world in which we don't need so many translators because there are fewer hops from the idea to the value that we want to create to the execution. When you have all these translators, it's like the telephone game.As a leader, you need to be able to communicate much more precisely and clearly the outcome that you're trying to create in terms of value. You have to be your own translator, in a way, so that every stakeholder involved can take action on what's being communicated.<h2 id="df0e2c1a-ee63-46c5-b1e1-3cca22a63036">Anant Adya, executive vice president, service-offering head, and head of Americas delivery, Infosys</h2>At Infosys, one of the things we are focusing on is employee well-being. We want to be a hybrid work environment where we give flexibility to our employees to choose the way they want to work.There is obviously great value in coming to the office, collaborating with team members, and working to do innovative stuff. But this also ties back to DEI initiatives in the company. As we improve our gender diversity, especially as we go to the top, we want to make sure we give flexibility to our employees.Also very important is how we embrace innovation. We continuously upskill, retrain, and reskill our employees. How do we make sure that we embrace the culture of learning in the company? It's very critical that we have to constantly learn and upskill ourselves with all the new technologies that are coming and with all the new lingo that is being spoken. We don't want to get stuck in the old world of still talking old technology.Finally, we balance risk and focus from a long-term standpoint. Of course, everybody's focused on the quarter results and numbers, but we want to have a very long-term focus and plan at the same time.<h2 id="ef9e6c96-6d4a-4af5-a150-163cc530eada">Justina Nixon-Saintil, vice president and chief impact officer, IBM</h2>There is such a focus on employee voice across everything that we do. When you think about AI, we're asking employees, no matter where they are across the business, to come up with use cases and ways that AI can make a difference in their function.In the past, this would be the limit of just one entity, one function to come up with the right use cases. Maybe it was the software team, CIO team, or CTO.Now we're looking across the entire business and saying, "Come up with the right use cases that can help your function, your programs, your organization."Even in the area that I lead around corporate responsibility and ESG, we're deploying AI technology to create better learning pathways for our users or to look at ESG and data analytics. So this is an area we're leading within the organization and not necessarily waiting for another function to help us lead.<h2 id="b9d6a0b9-97d7-4bef-b44c-1a0b1ebba35e">Maggie Hulce, chief revenue officer, Indeed</h2>We are moving towards AI-enabled transformation being a companywide expectation, as opposed to just a few teams working on it and incubating it. That requires, as others have said, cross-team learning and development, and we are acknowledging we need both centrally driven, top-down things and a lot of bottom-up things.That's a parallel concept to DEI. We've gone through the transition of separate DEI organizations to having it be the expectation that equity is every leader's responsibility.Having a separate team that's supposed to make everybody behave with equity just doesn't work.With well-being, we've been on this track that, of course, physical and mental health, employee engagement, and employee voice are really important. Right now, there's more focus on training managers for the challenges of the multigenerational workforce and the mix of in person and remote.The speed of change is getting more and more rapid. How do we equip the managers up and down to help navigate this? And that's a big part of employee buy-in and navigating change. In the C-suite itself, you have more roles that have to think cross-functionally and be cross-functionally trained. Because as you think about how AI can change processes, it blurs and breaks old functional lines.That will make people uncomfortable. But if you let the functional lines be blockers, it will definitely slow you down. So our expectation is that we're going to see more and different types of roles that are enabling transformation.<h2 id="9b14003d-0c96-46b6-9c44-0515cc2393cf">Lucrecia Borgonovo, chief talent and organizational-effectiveness officer, Mastercard</h2>One of the biggest shifts is around decision-making — the move from siloed decision-making, where each member of the C-suite has a defined set of decisions they're accountable for, to a C-suite that acts more as a collective leadership body. It acts more cross-functionally, and there are more shared responsibilities and more joint decision-making that becomes part of the norm.There's much more fluidity and interdependency across different roles and functions. C-suite leaders are wearing multiple hats and creating roles that are much more versatile in nature.Tim Paradis: We've seen new C-suite roles emerge in recent years, like chief AI officer and chief ethics officer. The C-suite itself is getting larger in some cases. What new C-suite offices might emerge next?Nixon-Saintil: I'm seeing a lot of new roles, especially in corporate social responsibility and ESG. More "chief impact officers" are focused on social impact across the business. Those roles sometimes oversee environmental affairs and sustainability initiatives.The "chief sustainability officer" role has increased significantly over the last two years. Many large companies had them, but now smaller or midsize companies are adding that role to the C-suite, especially as they prepare for regulation around sustainability and all of the mandatory disclosure that is occurring."Chief ESG officer" is a new role that we are seeing as well, with a focus on ESG, regulation, controls, and accountability.Adya: The common thing that will happen across roles is the use of data and AI across every role.There are two roles that we are seeing in some of our bigger customers. One is chief experience officer, who is focused on what we call "human experience." It's not just about the experience of users but also of the stakeholders, business users, and customers of the enterprise.For example, if you go to a company and ask a finance person, "What does experience look like for you?" He or she will say that I would want to close my books on time. That's the experience. They don't care about whether they're using X, Y, or Z vendor. For them, closing the books on time is their experience. So this is about looking at the experience of the stakeholders, the users, and their customers.Then, while there is a "chief AI officer" role that's picking up, there is also a lot of focus on automation. How do we use automation in a business process? So the "chief automation officer," cutting across the enterprise, is looking at areas where we could potentially drive automation in a big way.Borgonovo: One that is on my mind is what you might call a "chief optimization officer," focused on how do you extract the most value across your products, your services, and all the different investments that you make, identifying items that aren't necessarily scaling.The other one that we have seen at Mastercard is the "chief risk officer," a new role created in response to the environment getting incredibly complex and the importance of embedding risk management into the organization.Roles like chief transformation officer will continue to be relevant. It all depends on the maturity of the different capabilities that you have in the organization.Pittman: I think that a lot of these roles — whether it's chief diversity officer, chief risk officer, chief digital officer — are really about building new competencies that are not widely spread. Where it's working best, you see companies standing up leadership for these capabilities and then pushing it down the line. It's got to be everybody's accountability.The number of companies naming chief transformation officers grew about 140% over the last couple of years. It's one of those roles where the impact is most measurable. You can see with a chief transformation officer, from the time they're appointed to the next two years, on average, that the company is going to improve its shareholder return performance versus its peers.That's pretty remarkable in terms of impact, so we'll keep seeing that. With the pace of change, the half-life of market leadership keeps getting shorter and shorter. We're going to see the role of the chief transformation officer being critical to enable C-suites to keep up with the pace of change and drive cross-functional initiatives.Hulce: I was just pitching this idea of a transformation leader, not necessarily reporting to the CEO but one across internal functions to help drive the next 18 months given how fast we intend to stand up totally different ways of working.When we think about transformation for external products versus transformation for internal processes, it is a bit different. So when we think about the work we're trying to do for external products, making sure the scope is clear — those are long-standing, typical questions for how you stay competitive and innovate.But rapid cross-functional, internal transformation is different. Can you make a successful role to drive a complete rethink of process and workflow across many functions with technology and AI being a critical enabler?In the past, it wasn't as important to do cross-functionally as it is now, with what gen AI can do. It's a big opportunity to radically rethink how this work gets done.Murray: Business-unit leaders now have an explicit responsibility to look at everything within their business line and think about on a 2-by-2 matrix the feasibility versus the impact of transforming end-to-end process.Chen: I do like this idea of a chief transformation officer, but the risk there is if every leader isn't equipped with thinking about how to proactively get value from tools that are around the organization and the data that is available. Everyone is going to have to be reskilled to learn how to do that, with AI as one of the new accelerator tools.

The C-suite is evolving — and new roles may join to drive innovation, say execs from IBM, JLL, Clear Capital, and more

<ul class="summary-list"><li>Companies from United to Nestlé have talked about a sales slowdown due to the presidential election.</li><li>Experts say some shoppers are holding back until after November 5 — but not everyone.</li></ul>Companies are bracing for people to shop, travel, and drink less around <a target="_blank" class="" href="https://www.businessinsider.com/what-is-going-on-with-economy-jobs-inflation-election-voting-2024-10">Election Day</a>.Executives at some major brands have said on earnings calls in recent weeks that they expect their <a target="_blank" class="" href="https://www.businessinsider.com/election-impact-companies-trump-harris-2024-10">financial results to take a hit</a> around the time voters will decide between Vice President Kamala Harris and former President Donald Trump. They range from Constellation Brands, the maker of Modelo, which expects fewer people to go out drinking around the election, to airlines like United and Delta, which often see passenger counts dip around Election Day.Some companies already have seen political news distract customers. When a gunman died after injuring Trump at a rally in Butler, Pennsylvania in July, for instance, Amazon saw some people put off making purchases on the website, CFO Brian Olsavsky said in August."A lot of times, purchases will defer and people will come back and buy what they were going to buy," Olsavsky said on a call with reporters. "And other times — that won't happen."Other companies have invoked the election but not provided details about the dynamics leading consumers to pull back. Anna Manz, CFO of Nestlé, said on the company's earnings call last week that it's facing a slowdown in the US and "concerns around the elections are playing out." Nestlé did not immediately respond to a request for more details from Business Insider.Research suggests that some consumers — though not all — do indeed reduce purchases around the event.Some shoppers are holding off on making purchases until after November 5, according to a September survey of 400 Kroger shoppers by 84.51, the grocer's marketing subsidiary. Eighteen percent of those surveyed said they were holding off on buying big-ticket items such as electronics or appliances. Slightly smaller percentages said they were holding off on an investment decision or buying a car.Consumers might be holding off on big purchases because they need loans and hope that interest rates will fall more in the months after the election, said Alex Trott, director of insights at 84.51. But some might not actually care as much about the election as the seasonal promotions that tend to follow in November and December, she added. "We are also bumping up against a holiday season where there are always sales," Trott said.People under 34 were also more likely than older consumers to put off a major financial commitment until after the election, 84.51 found.Older consumers, such as Baby Boomers and members of Gen X, "can make some of these bigger decisions," said Trott. "Younger people don't have that spending power. They are sensitive to these smaller price changes."Most people — 53%, according to 84.51 — said they weren't delaying any big purchases as a result.This US election is taking place after years of inflation have squeezed consumers. <a target="_blank" class="" href="https://www.businessinsider.com/pennsylvania-grocery-store-voters-talk-economy-inflation-harris-trump-2024-10">The economy is a top concern</a>, voters told BI this week. Deutsche Bank said <a target="_blank" class="" href="https://www.businessinsider.com/sticky-inflation-outlook-risk-cpi-fed-rate-cuts-geopolitics-recession-2024-10">inflation will remain stickier than expected</a>.Many companies are also forecasting that demand will return after either Trump or Harris wins the election. Modelo maker Constellation, for instance, said it expects beer demand to pick up again.Ron Hill, a professor at American University's Kogod School of Business, said consumers' retreat could last longer if determining who won takes weeks.Polls show that the <a target="_blank" class="" href="https://www.businessinsider.com/harris-trump-presidential-election-swing-state-polls-sun-belt-2024-10">race between Trump and Harris</a> is close to a toss-up just over a week ahead of Election Day. If the race comes down to a single evenly divided state, as it did in 2000, when it took five weeks beyond election day to determine that George W. Bush had won the White House, shoppers might spend more time focused on that news and less time making discretionary purchases, Hill said."That's going to be hell to pay" if that happens, he said.

Election Day stress is affecting some companies' sales

<ul class="summary-list"><li>A group of researchers asked whether OpenAI's GPT-4 could effectively perform financial analysis.</li><li>The researchers found that, in some cases, the tool could perform better than a human.</li></ul>A study found that OpenAI's <a target="_blank" href="https://www.businessinsider.com/openai-launch-better-gpt-5-chatbot-2024-3">GPT-4</a> could perform financial statement analysis and, in some cases, predict a company's future performance <a target="_blank" href="https://www.businessinsider.com/chatgpt-jobs-at-risk-replacement-artificial-intelligence-ai-labor-trends-2023-02">better than a human analyst</a>.Three researchers from the University of Chicago Booth School of Business — Alex Kim, Maximilian Muhn, and Valeri Nikolaev — conducted a <a target="_blank" href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4835311">study</a> to find out whether <a target="_blank" href="https://www.businessinsider.com/chatgpt-openai-lazy-again-users-defecting-rivals-anthropic-claude-2024-3">GPT-4</a> could analyze financial statements purely with numbers, meaning the researchers didn't provide the <a target="_blank" href="https://www.businessinsider.com/google-gemini-rare-breed-of-huge-ai-model-2023-9">large language model</a> any textual context.The analysis didn't include text typically accompanied in quarterly earnings reports, such as the Management Discussion and Analysis (MD&amp;A) section, the study said. "While textual information is easy to integrate, our primary interest lies in understanding the <a target="_blank" href="https://www.businessinsider.com/how-ai-chatbots-like-chatgpt-work-explainer-2023-7">LLMs'</a> ability to analyze and synthesize purely financial numbers."The researchers examined over 150,000 firm-year observations — or data collected on a firm in one year — from about 15,000 companies between 1968 and 2021.With the <a target="_blank" href="https://www.businessinsider.com/ai-giants-openai-anthropic-running-out-of-good-training-data-2024-4">data</a>, Muhn told Business Insider that he and his colleagues could grade how financial analysts performed in their forecasts.For example, the study found that analysts achieved a 53% accuracy in one-month forecasts of the direction of future earnings.According to the study, the researchers then fed GPT-4 financial statements without any textual information and anonymized the data so that the model wouldn't know which companies' data it was analyzing.When GPT was given a "simple" prompt that does not use "chain-of-thought command" — meaning the researchers asked the model to answer without breaking up the request into step-by-step instructions — the model scored slightly worse than analysts with a 52% accuracy, the study said.However, the model's performance changed when the researchers used a chain-of-thought command prompt. According to the study, by giving GPT more instruction and guidance, the model achieved a 60% accuracy.The results showed that when GPT is given more instruction, approaching analysis like a human, the model "can outperform human analysts" even without key text information typically found in financial reports, the study said,The researchers also noted in their study that financial analysis and prediction are highly complex tasks that require judgment, common sense, and intuition, which can stump humans and machines. This may explain why neither group is churning out anything near 100% accuracy in their analysis.<h2 id="93e47370-01b8-4757-8009-fd1379eafba3">Will analysts be replaced by AI?</h2>One anecdotal observation Muhn noted to BI that is not shown in the study is that GPT appeared to be better at analyzing larger companies. Think places like Apple, he said."For larger firms like Apple, for example, it seems to do relatively better, which could be related to the fact that generally — and this is shown in prior literature — larger firms or more mature firms are essentially less idiosyncratic," Muhn said.At a small biotech firm, for example, the company's profitability in the next year can be highly variable on factors like a successful clinical trial, the researcher said, making prediction harder for GPT based solely on financial statements.The study also noted that GPT-4 could be more effective in analysis since humans can be biased in cases like incorporating information rationally.Kim acknowledged to BI that <a target="_blank" href="https://www.businessinsider.com/chatgpt-acting-weird-ai-researcher-says-users-could-be-blame-2024-2">LLMs also have biases</a>. But defining biases can be tricky, he said, since people can be talking about political biases in a model or a positive bias."But if the LLM had a very strong bias in making some earnings-related predictions, it would've been very bad in predicting the outcomes," Kim said in an interview. "But it seems like it's doing, on average, pretty well."So, the <a target="_blank" href="https://www.fortunebusinessinsights.com/financial-analytics-market-107948">multibillion-dollar</a> question: Can LLMs replace human financial analysts?"At this moment, I would say no," Kim told BI. "It's still complimentary. The technology is going to develop over time, and then, who knows? Two years before, we didn't even think about this kind of technology coming out."Kim emphasized that the research doesn't suggest that analysts will be replaced by machines and that, for now, there are areas where human experts can do better and vice versa.Still, the research provides a glimpse of the tools that may soon be available to a financial analyst to determine a company's health more accurately.OpenAI and Apple did not immediately respond to a request for comment.

AI could help predict the financial earnings of companies as large as Apple, researchers say 

Counted as it is among the world’s fastest growing economies, an unfathomable amount of money flows in and out of the Indian economic system. But there are cracks in said system, and ever so often, a fraudulent mastermind uses them to slip some cash out for their advantage. From <keyword id="19964851" type="General" weightage="20" keywordseo="ponzi" source="keywords">Ponzi</keyword> schemes to bank frauds, the Indian government and investors have fallen victim to many financial scandals — some of which were so sordid that they can be recounted like they happened yesterday. Here’s a rundown of the most infamous scams in Indian financial history: <h2><keyword id="20713434" type="General" weightage="20" keywordseo="harshad-mehta" source="keywords">Harshad Mehta</keyword> Scam (1992) – ₹4,000 Crore </h2>Perhaps the most iconic of all Indian financial scams, Harshad Mehta was known as the "Big Bull" of the stock market. He manipulated stock prices using illegal loopholes in the banking system. By obtaining unsecured loans from banks and investing them in the stock market, Mehta artificially inflated stock prices. His bubble burst when banks demanded their money back, revealing the massive fraud. This scandal led to a major reform in India's financial markets. Mehta died in jail before full legal accountability was reached, but the scam caused a significant loss to investors and led to tighter regulation in the Indian stock market. <h2><keyword id="23122396" type="General" weightage="20" keywordseo="satyam-scam" source="keywords">Satyam Scam</keyword> (2009) – ₹14,000 Crore </h2>Dubbed as India’s Enron, the Satyam scandal involved its founder, <keyword id="23122397" type="General" weightage="20" keywordseo="ramalinga-raju" source="keywords">Ramalinga Raju</keyword>, admitting to falsifying the company's accounts to the tune of ₹14,000 crore. Satyam Computer Services, once considered a blue-chip company, was found guilty of inflating profits and revenues. Raju admitted to the scam after a failed attempt to buy two Maytas firms owned by his family. This case brought corporate governance issues in India to the forefront. Raju was convicted, but the legal processes have allowed him temporary freedom through bail. But this incident called for improved transparency and stricter corporate governance norms. <h2>Punjab National Bank Scam (2018) – ₹13,700 Crore </h2>Diamond merchant Nirav Modi and his uncle Mehul Choksi orchestrated one of the largest frauds in Indian banking history by obtaining fraudulent Letters of Undertaking (LoUs) from Punjab National Bank (PNB). These LoUs allowed them to obtain loans from foreign branches of Indian banks without providing any collateral. The scam involved over ₹13,700 crore, and Modi fled the country, causing significant reputational damage to India’s banking sector. Nirav Modi’s extradition is still pending, and Mehul Choksi remains out of India’s legal jurisdiction. The scam, however, resulted in strengthened banking regulations regarding LoUs and SWIFT transactions. <h2><keyword id="23122399" type="General" weightage="20" keywordseo="vijay-mallya-scam" source="keywords">Vijay Mallya Scam</keyword> (2016) – ₹9,000 Crore</h2>The "King of Good Times" was living large while his airline, Kingfisher, was drowning in debt. Vijay Mallya allegedly defaulted on loans amounting to ₹9,000 crore from various banks. He fled to the UK in 2016, leaving creditors, employees, and stakeholders in financial distress. His lavish lifestyle amidst the collapse of his airline made this scandal a high-profile case. Mallya’s extradition process is ongoing, but he remains out of reach of Indian authorities. The main impact was enhanced scrutiny of loan defaults and triggered legal reforms on extradition. <h2>Saradha Chit Fund Scam (2013) – ₹2,500 Crore </h2>The Saradha Group, operating a ponzi scheme disguised as a chit fund, promised unrealistically high returns to its investors, mostly in West Bengal and Odisha. The scam collapsed, leaving over 1.7 million people, many of whom were low-income investors, without their life savings. Politicians and celebrities were also implicated in the case. While Sudipta Sen is behind bars, not all the accomplices have been held accountable. But this Ponzi scheme resulted in reform of chit funds and greater regulatory oversight on such investment schemes. <div type="Article" hostid="261" msid="112337071" title="Noida woman invests in stock market via an app, loses over Rs 69 lakh as it turns out to be a scam" mstype="2" mssubtype="0"></div> <h2><keyword id="6560832" type="General" weightage="20" keywordseo="2g-spectrum-scam" source="Orion">2G Spectrum Scam</keyword> (2008) – ₹1,76,000 Crore </h2>The 2G spectrum allocation scandal involved the underpricing of telecom licences to select companies in exchange for bribes. Telecom minister A. Raja was at the centre of this controversy, which allegedly caused a loss of ₹1.76 lakh crore to the exchequer. The case was seen as a massive blow to public trust in India’s telecom sector and led to significant political fallout. Sadly, all key figures involved were acquitted despite the Supreme Court’s intervention and cancellation of 122 telecom licences. <h2><keyword id="455134" type="General" weightage="20" keywordseo="coal-allocation-scam" source="Orion">Coal Allocation Scam</keyword> (Coalgate) (2012) – ₹1,86,000 Crore </h2>The coal allocation scam, or "Coalgate," involved the illegal allocation of coal blocks to private companies between 2004 and 2009. The CAG of India estimated a loss of ₹1.86 lakh crore to the exchequer due to non-competitive bidding. Many high-profile politicians and industrialists were implicated, making this one of the largest political scandals in India. While some officials faced legal consequences, many key players were not prosecuted. But it did trigger policy reforms in the allocation of natural resources. <h2>DHFL Scam (2019) – ₹34,615 Crore </h2>Dewan Housing Finance Corporation Limited (DHFL) was accused of syphoning off over ₹34,000 crore through a series of shell companies and fraudulent loans. Investigations revealed that the promoters used these funds for personal enrichment and illegal political donations. The case came to light after an investigation by investigative journalists and was later confirmed by a report from KPMG. The case is ongoing, and the main accused are in custody. For now, regulations governing non-banking financial companies (NBFCs) have been strengthened. <h2>Yes Bank Crisis (2020) – ₹3,788 Crore </h2>Yes Bank, under its founder <keyword id="19899935" type="General" weightage="20" keywordseo="rana-kapoor" source="keywords">Rana Kapoor</keyword>, was involved in questionable lending practices. The bank made high-risk loans to companies already in financial trouble, which eventually turned into non-performing assets (NPAs). Kapoor was arrested, and the Reserve Bank of India had to step in to stabilise the bank. The case highlighted serious lapses in corporate governance and risk management. As of now, Rana Kapoor is facing trial, and legal proceedings are active. The RBI has also introduced new measures to monitor the health of banks more rigorously. <h2>Commonwealth Games Scam (2010) – ₹70,000 Crore </h2>The 2010 Commonwealth Games held in New Delhi were overshadowed by corruption allegations involving inflated contracts and kickbacks. <keyword id="23122398" type="General" weightage="20" keywordseo="suresh-kalmadi" source="keywords">Suresh Kalmadi</keyword>, the head of the organising committee, was arrested for awarding contracts at exorbitant rates. The estimated loss to the exchequer was around ₹70,000 crore. This scam tarnished India’s image on the global stage. Kalmadi was arrested but the case has not resulted in major convictions or recoveries, except for stricter oversight on large public projects and international event planning. These scams not only caused financial damage but also eroded public trust in India’s institutions. In response, India has tightened regulatory frameworks, improved corporate governance, and adopted stricter banking standards, although challenges persist in tackling large-scale fraud. <div type="Article" hostid="261" msid="112896255" title="I was scammed out of $300K in a 3-month-long government impersonation scam" mstype="2" mssubtype="0"></div>

10 financial scams that shook India: A dive into deception

<ul class="summary-list"><li>Norfolk Southern fired CEO Alan Shaw for a previously undisclosed relationship with an employee.</li><li>Alan Shaw had been in a consensual relationship with the company corporate secretary, Nabanita Nag.</li></ul>Railroad company Norfolk Southern ousted CEO Alan Shaw after an internal probe uncovered his relationship with the company's top lawyer, the company said in a Wednesday <a target="_blank" href="https://norfolksouthern.mediaroom.com/2024-09-11-Norfolk-Southern-Board-of-Directors-Appoints-Mark-R-George-President-and-Chief-Executive-Officer-Through-Unanimous-Vote-of-Independent-Directors">statement</a>.An internal investigation into Shaw uncovered his consensual relationship with the company's chief legal officer, Nabanita Nag. Norfolk Southern said that both people were fired.The company <a target="_blank" class="" href="https://norfolksouthern.investorroom.com/2024-09-08-Statement-regarding-investigation-of-alleged-misconduct">said</a> earlier this month it had started investigating Shaw for violating unspecified company policy.Shaw's departure comes just over two years into his tenure as CEO. His leadership was already under pressure following a series of challenges, including two train <a target="_blank" href="https://www.businessinsider.com/another-norfolk-southern-train-derails-this-time-in-alabama-2023-4#:~:text=Norfolk%20Southern%20told%20Insider%20in,public%2C%22%20the%20statement%20said.">derailments</a> in Ohio and Alabama last year."Shaw's departure is unrelated to the company's performance, financial reporting and results of operations," said the company in the statement.Nag joined Norfolk Southern in 2020 as general counsel. In 2022, she became senior vice president and, later, corporate secretary. At the time of the investigation, Nag oversaw departments including government relations, communications, and compliance, CNBC reported.Shaw will be succeeded by Mark George, the company's chief financial officer, the company said in the statement.George had served as CFO for nearly five years and played a key role in the company's efforts to fend off a recent activist investor campaign led by Ancora Holdings Group. The group had advocated for Shaw's resignation following the derailments.Nag will be replaced by Jason Morris, who will take over her former role as corporate secretary, the company said in the statement.Norfolk Southern chairman Claude Mongeau said in the statement that he was confident in George's leadership.Shaw joins several high-profile company leaders, including <a target="_blank" href="https://www.businessinsider.com/bp-bernard-looney-ex-wife-said-he-ended-marriage-text-2023-9">Bernard Looney</a>, former CEO of BP, and <a target="_blank" href="https://www.businessinsider.com/cnn-president-jeff-zucker-resigns-over-relationship-with-colleague-2022-2">Jeff Zucker</a>, former CNN chief, who lost their positions after failing to disclose personal relationships with their employees, Business Insider <a target="_blank" class="" href="https://www.businessinsider.com/ceo-dating-employees-boss-relationship-2023-9">reported</a> last year.Shaw and Nag did not respond to requests for comments sent by BI outside business hours. Norfolk Southern declined further comment.

Railroad company Norfolk Southern fired its CEO over his relationship with the company's top lawyer

<ul class="summary-list"><li>Private equity is sharing profits with employees to boost returns.</li><li>Earlier this year, <keyword id="20144468" type="General" weightage="100" keywordseo="blackstone" source="keywords">Blackstone</keyword> rolled out an ownership plan for employees of HVAC company <keyword id="23252568" type="General" weightage="20" keywordseo="copeland" source="keywords">Copeland</keyword>.</li></ul>The <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/private-equity-investment">private-equity industry</a> is famous for taking control of companies to maximize returns for investors. But when a firm exits a deal, employees are often left with nothing but a new owner. The newest rage in <a target="_blank" class="" href="https://www.businessinsider.com/wall-street-private-equity-woes-debt-stock-market-interest-rates-2023-12">private equity</a> seeks to flip that model on its head by offering employees equity on top of their regular salaries. By giving employees a share of potential profits, the thinking goes, everyone is incentivized to meet the goals required to sell the company or take it public through an IPO, which could lead to a larger return faster. But how do these programs work? Which employees stand to gain? How much money might they make? <a target="_blank" class="" href="https://www.businessinsider.com/how-to-succeed-at-blackstone-schwarzman-gray-career-advice-2024-8">Blackstone</a> discussed these and other questions at a September event at its New York City headquarters, and Business Insider was on hand to take notes. The topic of discussion was an employee-ownership program <a target="_blank" class="" href="https://www.businessinsider.com/blackstone-stock-price-private-equity-steve-schwarzman-kkr-apollo-2024-5">Blackstone recently rolled out at Copeland</a>, one of the largest manufacturers of compressors used in heating and cooling applications like HVAC and refrigeration. Copeland's CEO said that the program, which doled out stock to some 18,000 employees, was one of the largest for any private-equity-owned company and that it had already helpedboost employee engagement. Here's a look at Blackstone's employee-ownership program at Copeland, including how it works and why employee ownership isspreading like wildfire at private-equity-owned companies. <h2>The rollout</h2>Blackstone acquired Copeland in May 2023 in a deal that valued it at $14 billion. Copeland had previously been a unit of publicly traded Emerson Climate Technology but was spun out as part of the sale to Blackstone. In May 2024, Blackstone rolled out an employee-ownership program to Copeland's 18,000 employees — the first of a larger initiative to start offering stock to employees of any new US-based company controls, according to a Blackstone memo to investors obtained by BI. At a careers event at Blackstone's headquarters in September, Copeland's CEO, <keyword id="23618352" type="General" weightage="20" keywordseo="ross-shuster" source="keywords">Ross Shuster</keyword>, said the HVAC company's employee-ownership program's 18,000 employees are spread across 43 countries, creating logistical challenges. "So as we were looking at deploying this, we were stewarding the team, talking to unions and works councils, and making sure we didn't inadvertently trigger a tax consequence for someone with a grant," he said. <div type="image" title="Many employees sitting in a cafeteria, with a sign that says Copeland Cafe, as they are spoken to by a man on the stage." height="432" width="768" msid="114324041" hostid="261"></div><h2>Inside the plan</h2>The biggest challenge, <keyword id="23618349" type="General" weightage="20" keywordseo="shuster" source="keywords">Shuster</keyword> said, was making sure that all 18,000 employees understood the model. To do that, Copeland shut down all of its plants one day so that every employee could watch a roughly half-hour video explaining the program, dubbed in eight languages, followed by additional communications to employees. Copeland's employees learned that they stand to receive a cash bonus payment or stock grant from the company when Blackstone sells the company or brings it public — as long as they're still employed at the firm. The size of any individual employee's stake will depend on several factors, including their rank, their tenure at the company, and most importantly, the overall success of the deal. Success in<a target="_blank" class="" href="https://www.businessinsider.com/more-startups-get-bought-up-by-private-equity-vc-2024-8"> private equity</a> is often evaluated by how much money a deal generates compared to the initial investment. The higher the multiple on invested capital, the higher the payout. The video, Shuster said, explained how to value a company and technical concepts like EBITDA, valuation, and cash flow. It also spoke to employees about how they, personally, might play a role in generating a bigger return. "How do you impact those things if you're in procurement? How do you impact cost and cashflow through contractual terms," Shuster said. "If you're on the production floor, how do you have an impact on customer satisfaction and productivity." Copeland's Chief Human Resources Officer <keyword id="23618351" type="General" weightage="20" keywordseo="stuart-dalgleish" source="keywords">Stuart Dalgleish</keyword> said that after the rollout, 56% of the firm's employees said they understood the program — a number that Shuster said was "as expected for a program of this nature," and that they are focused on increasing it over time. <div type="image" title="Three men in business suits sit on a couch with an audience in the foreground and text in the back that reads Blackstone Career Pathways 2024 Summit" height="5760" width="8640" msid="114324040" hostid="261"></div><h2>Early signs of success</h2>Despite the program's recent launch, Copeland is already seeing results. The company's employee engagement results went from the 25th percentile at the time Copeland was carved out from Emerson Electric to the 90th percentile in the span of a year, which Dalgleish said is "an incredibly rare feat to which this program contributed." Speaking at the Blackstone event in Manhattan, Shuster said that a supervisor told him that the program had completely changed his conversations with direct reports. The supervisor said conversations are now more of "an open discussion." He went on to explain: "These are the great things we're doing in the business to make a better company, and we're all going to win from this. These are the things that aren't going so well, and we've got to improve on." "The discussion is different when you're talking to individuals who don't have a financial stake," Shuster added. Employees are also starting to ask more financial questions, Shuster said. "I got questions at the level that I would expect to get from the board coming from production," Shuster said. "That's the culture you want to build." <h2>Why now?</h2>This wasn't Blackstone's first employee-ownership deal. The firm has implemented employee ownership at <a target="_blank" href="http://Ancestry.com">Ancestry.com</a> and <a target="_blank" class="" href="https://www.businessinsider.com/theme-parks-dynamic-pricing-legoland-madame-tussauds-merlin-entertainments-2024-3">theme-park operator</a> Merlin Entertainment, among others. The 2005 Merlin Entertainment initiative created 2,000 employee-owners when Blackstone took the company public in 2012, a number that's since grown to 5,000. But Joe Baratta, global head of private equity at Blackstone, said the time had come to be much more "intentional and systematic" across the private-equity group's operations. <div type="image" title="Man in suit in front of brown background" height="3510" width="2700" msid="114324038" hostid="261"></div>Across the industry, high interest rates have squeezed returns and exit opportunities. As a result, firms have been searching for novel ways to create more value by <a target="_blank" href="https://www.businessinsider.com/portfolio-operations-jobs-rising-stars-of-private-equity-2024-8">drilling down on company operations</a>. Employee ownership offers yet another way to create value by aligning investors, employees, and the portfolio company. "This is the right thing to do for our 18,000 colleagues, but it is also an investment for business," Copeland's Shuster said. "And with any investment, there is also an expected return on that investment." Blackstone's current initiative, which grew out of a talent development and employee engagement program called<a target="_blank" href="https://www.businessinsider.com/blackstone-career-pathways-training-internships-data-center-talent-portfolio-companies-2024-9"> Career Pathways</a>, comes amid an industry-wide push led by <keyword id="19924483" type="General" weightage="20" keywordseo="kkr" source="keywords">KKR</keyword>. KKR drastically expanded its <a target="_blank" href="https://www.businessinsider.com/top-wall-street-executives-rising-stars-investing-trading-2024#alissa-song-31-kkr-1">employee-ownership program</a> after seeing outsized returns at garage-door manufacturer CHI Overhead Doors in 2015. The firm has since awarded billions of dollars of equity to over 120,000 nonsenior management employees across more than 55 portfolio companies. KKR's global cohead of private equity, Pete Stavros, also helped found the nonprofit Organizing Works to encourage the adoption of this model across the private equity industry and beyond. A KKR spokesperson said the company's portfolio currently boasts nearly 100,000 employee-owners, and its single-largest program has 20,000 people enrolled. "This has become an industry-wide movement," the spokesperson said. <h2>The payouts</h2>Blackstone didn't specify the size of the stakes granted to Copeland's employees, but payouts have been substantial in some well-publicized deals at other firms. When <a target="_blank" class="" href="https://www.businessinsider.com/top-wall-street-executives-rising-stars-investing-trading-2024#alissa-song-31-kkr-1">KKR launched its employee-ownership program</a> at CHI, the firm told employees that if KKR hit its goals, employees could earn about a year's salary, KKR's Stavros recently told NPR's "<keyword id="23618350" type="General" weightage="20" keywordseo="ted-radio-hour" source="keywords">Ted Radio Hour</keyword>." The CHI deal eventually led to a return of 10 times the firm's initial investment, one of KKR's best-performing deals of all time, resulting in average payouts of $175,000 for "frontline" factory workers. The longest-tenured employees ended up with much more, or six and a half times their annual income. "We had factory floor workers make half a million dollars," Stavros said. "Some truck drivers made $800,000." One factory worker, Josh Ryan, told NPR that he was able to start college funds for all four of his children, renovate his family's house, and pay down some of his mortgage. KKR's September sale of GeoStabilization International to Leonard Green &amp; Partners led to a five times return on investment, resulting in a <a target="_blank" class="" href="https://www.businessinsider.com/workers-kkr-company-geostabilization-payouts-private-equity-ownership-works-2024-9">$75 million equity payout</a> being shared among the company's non-management employees. The company's longest-tenured hourly employees will receive at least $325,000 in cash payouts when the deal is finalized. Such payouts may prove the exception, however. The amount any one employee might receive is determined by far more than the size of the return, including how much equity is put aside for workers and the number of employees splitting that money. A KKR spokesperson told BI that payouts across their portfolio so far have averaged about a year's worth of pay, with more tenured employees earning more than that. When setting up an employee-ownership plan, the firm typically aims for payouts equal to nine months' salary with a minimum goal of six-months' worth of pay. Copeland executives are hopeful that its program will have a major impact on the firm's 18,000 employees. "I really want to get to a point where, through the benefits of the program, people can maybe put their kids through school, or they might put a deposit on a house purchase," Dalgleish said. KKR has a stake in Business Insider's parent company, Axel Springer. Correction: October 18, 2024 — An earlier version of this article said Copeland was the largest employee-shareholder program for a private-equity-owned company. It is one of the largest.

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