Forbes USA-January 03 2018

ŏŏŏđŏĚŏ
SPECIAL ISSUE
2018
ŏ

100
YEARS
ŏČ EST. 1917
ŏ
FOSSIL-FREE OIL
INTEL CEO
GREED IS GREEN BRIAN
BEST VALUE KRZANICH
INVESTMENT:
WOMEN HE’S #1
(ON THE JUST 100 LIST)
BEWARE IMPACT
IMPOSTORS
MANY HAPPY
RETURNS
SURPRISE! WELL-PAID WORKERS PRODUCE BIGGER PROFITS.
WHY COMPETITION IS THE NEW UNION.
INTRODUCING THE JUST 1OO:
AMERICA’S TOP CORPORATE CITIZENS
This is what you get
when you outperform.
Again. And again.
Average Annual Total Returns Life of Fund
as of 09/30/2017 1-year 3-year 5-year 10-year Since 10/15/2002
Gross
Fidelity® Total Bond Fund 1.58% 3.45% 2.85% 5.03% 5.02% Expense Ratio
0.45%
Bloomberg Barclays U.S. Aggregate Bond 0.0 7% 2.71% 2.06% 4.27% 4.33%
Intermediate-Term Bond Category Average 0.83% 2.51% 2.12% 4.26% 4.06%
Performance data shown represents past performance and is no guarantee of future results.
Investment return and principal value will fluctuate, so investors may have a gain or loss when
shares are sold. Current performance may be higher or lower than what is quoted, and
investors should visit Fidelity.com/performance for most recent month-end performance.
Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks,
charges, and expenses. Contact Fidelity for a prospectus, offering circular, or, if available, a summary prospectus
containing this information. Read it carefully.
Past performance is no guarantee of future results.
It is not possible to invest directly in an index. All market indices are unmanaged.
Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Life-of-fund figures are reported as of the
commencement date to the period indicated.
As of 09/30/17, Fidelity Total Bond Fund outperformed the Bloomberg Barclays U.S. Aggregate Bond Index and the Morningstar Intermediate-Term Bond category average
over the 1-year, 3-year, 5-year, 10-year, and life-of-fund periods.
In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is
usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers
and counterparties. Lower-quality fixed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Unlike
individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Foreign securities
are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets.
The fund can invest in securities that may have a leveraging effect (such as derivatives and forward-settling securities) that may increase market exposure, magnify
investment risks, and cause losses to be realized more quickly.
Gross expense ratio is the total annual fund or class operating expense ratio from the most recent prospectus (before waivers or reimbursements) and generally is based
on amounts incurred during the most recent fiscal year.
Expense ratio is the total annual fund operating expense ratio from the fund’s most recent prospectus.
2016 U.S. Fixed-Income
Fund Manager of the Year1
The Fidelity® Total Bond Fund has delivered income and diversification for years through up and
down markets. Which is one of the reasons Morningstar named our team 2016 U.S. Fixed-Income
Fund Manager of the Year and included the Fidelity Total Bond Fund on their most recent Great 38
List.2 As part of one of the largest fixed income teams in the industry, Fund Managers Ford O’Neil,
Matt Conti, Jeff Moore, and Mike Foggin have successfully met their investors’ needs by being
flexible while carefully balancing risk with potential reward.
Learn about Total Bond Fund.
Fidelity.com/morningstar | 800.FIDELITY or call your advisor.
Morningstar Awards © 2017 Morningstar, Inc. All rights reserved. Awarded to Ford O’Neil and Team, FTBFX, for Fixed-Income Fund Manager of the Year (2016), U.S.
1
Morningstar’s award recognizes Ford O’Neil, Matthew Conti, Jeffrey Moore, and Michael Foggin for Fidelity Total Bond Fund (FTBFX). Established in 1988, the Morningstar
Fund Manager of the Year award recognizes portfolio managers who demonstrate excellent investment skill and the courage to differ from the consensus to benefit
investors. To qualify for the award, managers’ funds must have not only posted impressive returns for the year, but the managers also must have a record of delivering
outstanding long-term risk-adjusted performance and of aligning their interests with shareholders’. Nominated funds must be Morningstar Medalists—a fund that has
garnered a Morningstar Analyst Rating™ of Gold, Silver, or Bronze. The Fund Manager of the Year award winners are chosen based on research and in-depth qualitative
evaluation by Morningstar’s Manager Research Group. Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited
to, Morningstar Research Services LLC. Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are
based on Morningstar’s Manager Research Group’s current expectations about future events and therefore involve unknown risks and uncertainties that may cause such
expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund’s or
the fund’s underlying securities’ creditworthiness. The Morningstar Analyst Rating is a subjective, forward-looking evaluation that considers a combination of qualitative
and quantitative factors to rate funds on five key pillars: process, performance, people, parent, and price. Gold is the highest of four Analyst Rating categories. For the full
rating methodology, go to Corporate.Morningstar.com/us/documents/MethodologyDocuments/AnalystRatingforFundsMethodology.pdf.
2
Out of a universe of more than 8,000 funds, only 38 funds passed all the screens (cheapest quintile of category, portfolio managers with at least $1 million invested,
risk below “High” level, analyst rating of “Bronze” or higher, parent rating of “Positive,” and life-of-manager returns above benchmark). Morningstar FundInvestor
June 2017 Issue.
© 2017 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not
be copied or redistributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages
or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund’s current
prospectus for the most up-to-date information concerning applicable loads, fees, and expenses.
Fidelity Brokerage Services LLC, Member NYSE, SIPC. © 2017 FMR LLC. All rights reserved. 789739.6.0
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Contents // DECEMBER 26, 2017 VOLUME 200 NUMBER 7
COVER STORY
56 | COMPETITION IS
THE NEW UNION
American corporations
have spent decades slashing
jobs, cuting benefits and
putting shareholders before
employees. But guess what:
The Just 100 companies that
pay and treat their workers
well outperform those that
don’t. With unemployment
near 4%, the pendulum is
swinging back to the workers.
This time, it should pay off for
investors, too.
BY MAGGIE MCGRATH
WITH LAUREN GENSLER AND
SAMANTHA SHARF
PLUS:
THE JUST 100 RANKING
Spencer Rascoff, CEO

of Zillow Group. His
company is No. 51 on
the Just 100.
TIM PANNELL FOR FORBES
COVER PHOTOGRAPH BY ETHAN PINES FOR FORBES

STYLE DIRECTOR: JOSEPH DEACETIS; STYLIST: REGINA CHEREPINSKY.
WOOL SUIT ($11,500), COTTON SHIRT ($850), SILK TIE ($260).
AND CROCODILE BELT ($2,800) BY STEFANO RICCI.
4 | FORBES DECEMBER 26, 2017
DECEMBER 26, 2017
15 | FACT & COMMENT // STEVE FORBES

The GOP forgot Tax Cutting 101.
Plus: Forbes’ All-Star Eateries in New York.
LEADERBOARD
23 | SEAT OF POWER:
ROBERT KRAFT
Inside the office of the New England Patriots owner.
26 | SPORTSMONEY:
THE NHL’S MOST VALUABLE TEAMS
The Rangers are still No. 1.
Plus: Indiana’s richest man.
28 | 30 UNDER 30:
PROPERTY PROS
41 Twelve young entrepreneurs disrupting your domain.
30 | ATTACK OF THE GAMERS

Mashing the buttons with this year’s
top-earning YouTube celebrities.
32 | NEW BILLIONAIRE: RAZOR’S EDGE

A November IPO lifts this entrepreneur from
Singapore into the three-comma club.
Plus: Billionaires remember the best holiday gifts
they’ve ever gotten.
34 | THE 10-Q: JUDY ESTRIN

The Silicon Valley vet on recruiting women
leaders and saving Disney.
Mixology: How to make a “Warren Buffett.”
36 | FORBES @ 100:
POWER CUT—JULY 15, 1976
America’s long, dangerous dependence on foreign oil.
38 | CONVERSATION
Reactions to Secretary of Commerce Wilbur Ross’ ruse.
ENTREPRENEURS
41 | DREAMING OF A
POLYETHYLENE CHRISTMAS
52 Not your typical Silicon Valley company, Balsam Brands
sells fake Christmas trees and makes real profits.
BY SUSAN ADAMS
TECHNOLOGY
48 | BIG DATA FOR BIG CITIES
Moovit has created the Waze of public transit.
Is this the app that can beat urban congestion?
BY ALAN OHNSMAN
STRATEGIES
52 | BLACKROCK’S EDGE
How do you stay on top when your core business
is a commodity and you measure profits in
hundredths of a percentage point? You build the
best risk-management software on Wall Street.
BY ANTOINE GARA
66

©2017 glacéau. glacéau ®, smartwater ® and label are registered trademarks of glacéau.
electrolytes for taste.

addition.
vapor-distilled for purity,
sparkling
DECEMBER 26, 2017
FEATURES
66 | THE LAST COAL TYCOON
Dark days ahead for coal? Don’t tell that to billionaire Chris Cline,
who’s convinced the dirtiest fuel still has a bright future and
is building what he believes will be the last mine standing.
BY CHRISTOPHER HELMAN
75 | THE WORLD’S 100 MOST POWERFUL WOMEN

Who’s in charge? This year’s lineup includes the icons you
know on a first-name basis: Angela, Melinda, Oprah, Beyoncé.
But we’re introducing a brand-new generation of heads of state,
CEOs, founders, visionaries and leaders.
EDITED BY DOROTHY POMERANTZ AND SAMANTHA SHADDOCK
WITH CAROLINE HOWARD
2018 INVESTMENT GUIDE:

DO GOOD, GET RICH
81 | HIDDEN FIGURES
Female entrepreneurs get short shrift from Silicon Valley’s VC giants.
Jenny Abramson’s Rethink Impact sees that as an opportunity to profit.
BY ASHLEA EBELING
84 | THE FOSSIL-FREE OIL PLAY

MARTIN SCHOELLER
You can get your exposure to rising fuel prices without touching the stuff.
BY WILLIAM BALDWIN
75
88 | MIDDLE MENSCH
Impact outfits like David Fanger’s Swell—and the insurance
giant backing it—are betting low fees, minuscule minimums and
a feel-good focus will lure Millennial investors.
BY ZACK O’MALLEY GREENBURG
96 | GREEN IS GOOD, FOR RETURNS

Do-gooders want to invest sustainably to save the world.
Karina Funk does it to make money.
JAMEL TOPPIN FOR FORBES; CREATIVE STYLE DIRECTOR: JOSEPH DEACETIS;
STYLE EDITOR: JOHN ANTHONY BONILLA; HAIR/MAKEUP: SUZANNA HALLILI
BY JEFF KAUFLIN
100 | PORTFOLIO PLACEBOS

These days, people want to believe their investments are saving the
planet. Fund marketers are more than happy to oblige.
BY JEFF KAUFLIN
FORBES LIFE
102 | AROUND THE WORLD IN ’18 WAYS
From Bogotá to Bali, the hottest new hotels and resorts for 2018.
BY ANN ABEL
112 | THOUGHTS
96 On bosses.
100
YEARS
EST. 1917
102
The vintage Forbes logo on the cover dates from 1978.

INTRODUCING
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it was the 50th prototype that had the exact fit and feeling to complement
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INSIDE SCOOP
EDITOR-IN-CHIEF
Steve Forbes
FORBES MAGAZINE
EDITOR
Capitalism,
Randall Lane
EXECUTIVE EDITOR
Michael Noer
Built to Last
ART & DESIGN DIRECTOR
Robert Mansfield
FORBES DIGITAL
IN THE TENS OF THOUSANDS OF YEARS of humankind,
VP, DIGITAL CONTENT STRATEGY we are blessed to be enjoying the greatest way ever to spawn
Coates Bateman
VP, DIGITAL EDITOR wealth and happiness: entrepreneurial capitalism. Given our
Mark Coatney feckless government, perhaps it’s the only way right now. But it’s
VP, INVESTING EDITOR
Matt Schifrin not a constant—to keep this system healthy, we must continually
SVP, PRODUCT AND TECHNOLOGY nurture it. At the moment, too many Americans doubt whether
Salah Zalatimo
capitalism delivers what they need, in part because too many
VP, WOMEN’S DIGITAL NETWORK
Christina Vuleta companies have stopped listening to America.
VP, VIDEO That’s where the Just 100 comes in. Last year, we debuted the
Kyle Kramer
ASSISTANT MANAGING EDITORS first-ever ranking of companies based on whether they achieve
Kerry A. Dolan, Luisa Kroll WEALTH what Americans expect from them. This year, we’ve taken the
Frederick E. Allen LEADERSHIP
Loren Feldman ENTREPRENEURS next step: a unified ranking of 877 of the 1,000 largest publicly
Tim W. Ferguson FORBES ASIA
Janet Novack WASHINGTON traded companies, the best of which, regardless of industry,
Miguel Helft SILICON VALLEY
Michael K. Ozanian SPORTSMONEY
earn the Just 100 label. The multimillion-dollar research and
Mark Decker, John Dobosz, Clay Thurmond DEPARTMENT HEADS methodology driving this are un-
Jessica Bohrer VP, EDITORIAL COUNSEL
precedented. We surveyed more than
BUSINESS
Mark Howard CHIEF REVENUE OFFICER 72,000 people to establish a truly rep-
Tom Davis CHIEF MARKETING OFFICER
Jessica Sibley SENIOR VP, SALES, U.S. & EUROPE resentative look at what Americans
Janett Haas SENIOR VP, BRAND SOLUTIONS & STRATEGY want from a just company and then
Ann Marinovich SENIOR VP, CONTENT PARTNERSHIPS & STRATEGY
Achir Kalra SENIOR VP, REVENUE OPERATIONS & STRATEGIC PARTNERSHIPS used seven weighted drivers designed
Alyson Papalia VP, DIGITAL ADVERTISING OPERATIONS & STRATEGY
Penina Littman VP, SALES PLANNING & ANALYTICS to precisely reflect those wants, built
Nina La France SENIOR VP, CONSUMER MARKETING & BUSINESS DEVELOPMENT
with data so granular that it mea-
FORBES MEDIA
Michael S. Perlis CEO & EXECUTIVE CHAIRMAN
sures store-by-store metrics relative
Michael Federle PRESIDENT & COO to the zip code.
Terrence O’Connor CHIEF ADMINISTRATIVE OFFICER
Michael York CHIEF FINANCIAL OFFICER Forbes publishes the Just 100 in
Will Adamopoulos CEO/ASIA FORBES MEDIA
PRESIDENT & PUBLISHER, FORBES ASIA partnership with Just Capital, a non-
Rich Karlgaard EDITOR-AT-LARGE/GLOBAL FUTURIST profit company started by hedge fund
Moira Forbes PRESIDENT, FORBESWOMAN
MariaRosa Cartolano GENERAL COUNSEL billionaire and Robin Hood Foun-
Margy Loftus SENIOR VP, HUMAN RESOURCES Paul Tudor Jones
dation founder Paul Tudor Jones,
FOUNDED IN 1917
B.C. Forbes, Editor-in-Chief (1917-54) one of the keenest capitalists. For him, the Just 100 was born of
Malcolm S. Forbes, Editor-in-Chief (1954-90)
James W. Michaels, Editor (1961-99)
patriotic duty. “There is no bigger threat to our democracy than
William Baldwin, Editor (1999-2010) wealth disparity. It is a story normally reserved for monarchies,
dictatorships and plutocracies,” Jones tells me. “And yet we got in
this pickle because over the past 40 years the corporate focus on
MATTHEW FURMAN FOR FORBES
DECEMBER 26, 2017 — VOLUME 200 NUMBER 7 profits took on manic proportions relative to other stakeholders
such as employees, communities and the planet.
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FACT & COMMENT
“With all thy getting, get understanding”
THE GOP FORGOT

TAX CUTTING 101 BY STEVE FORBES, EDITOR-IN-CHIEF
TWO REMARKABLE things stand out— five years after the first one, Reagan did
for their absence—from the drawn-out, do away with numerous tax shelters, but
convoluted Republican tax-bill exercise. personal tax rates were knocked down.)
One is somewhat arcane but absolutely Contrast their approach to what Re-
critical to effective tax policy (Ronald Rea- publicans did this time to individuals:
gan understood it); the other is astonishing, They got rid of or sharply curtailed nu-
given all the GOP verbiage on the impor- merous deductions but didn’t slash the
tance of investing and the alleged need for tax rates. In fact, for some upper-income
“revenue offsets” for most of their cuts. earners—the people who disproportion-
rMarginal tax rates. This is the tax rate ately supply the savings necessary for
you pay on your next or additional dollar investments that improve the standard of
of income. Ronald Reagan, John Kennedy, living—the marginal rate will go up.
Jack Kemp and other wise tax cutters of the past grasped Unlike the JFK and Reagan efforts, the GOP’s work on the
the significant fact that the marginal tax rate is what matters personal side was pitiful, doing next to nothing to boost the
most to individuals and businesses in their decision making economy. Never in the annals of tax-cutting history has so
on whether to work to earn more or where to invest. Take much effort been expended to achieve so little. Republicans
an extreme example that makes the point: Say someone would have been better off enacting a 10% reduction in rates
makes $50,000 and is taxed at 10%; if she works harder she for everyone. To make sure all workers got higher paychecks,
can boost that income to $60,000. However, if the additional they could have repeated what was done in 2011–12 and
$10,000 will be taxed at 98% instead of 10%, the individual knocked off the first two points of the federal payroll tax.
will either forgo the extra income or consult a tax lawyer or rCapital gains. This is a real stunner for a party that’s sup-
accountant to find some way to shelter it. The same is true of posed to be the champion of promoting economic growth:
a business. Investing is risky enough, but if any extra profit Not once during the months of putting together a tax-cut
is going to be taxed at an exorbitant level, the company will bill was the idea of reducing the levy on capital gains ever
probably not make the investment to expand the enterprise seriously entertained. Cutting this rate is a powerful twofer:
and will instead put the money into tax-free municipals. Revenues always go up immediately, and productive in-
Tax rebates have little impact on expanding an economy, vestment is boosted. The instant extra money could have
because they don’t change marginal tax rates. They are one-shot “financed” extra tax cuts. What’s not to like? Apparently, like
deals. Nice to have, but they won’t really affect what financial cowardly lions, Republicans feared this economy-boosting
decisions are made, the way a lower marginal tax rate would. measure would open them up to the charge that they favor
The same is true of the current Republican obsession with the “rich.” Well, they should have learned long ago that
sharply expanding the child tax credit to show how much the Democrats will hurl this false accusation no matter what.
party loves middle-class and lower-income families. The par- Nonetheless, the GOP is lucky. The economy is gaining
ent or parents will have less of a tax bill, but their marginal tax speed just from the fact that, unlike during the Obama years,
rate won’t change. (The credit is partially “refundable,” which Washington isn’t daily dreaming up new ways to hobble busi-
means the family may get money even if it pays no income tax.) ness. President Trump’s deregulation push is bearing fruit.
To gin up a sluggish American economy, both John Ken- And the good of whacking the corporate tax rate and mean-
nedy and Ronald Reagan slashed personal income tax rates ingfully cutting the tax on partnerships and other so-called
from top to bottom. The cuts weren’t tied to reductions in pass-throughs (whereby profits are passed directly to individual
spending or to the elimination or clawbacks of personal tax owners as personal income) will overcome the other, oft egre-
deductions. (For his second big tax bill, which took place gious shortcomings of what the Republicans have wrought. F
DECEMBER 26, 2017 FORBES | 15

FORBES
FACT & COMMENT STEVE FORBES
THE FORBES 2017 ALL-STAR

EATERIES IN NEW YORK
The only thing hotter than big tech stocks this year has been the New York restaurant scene, with countless—and some
astonishingly creative—eateries opening and so many established ones reaching new heights of excellence. Of course,
no industry is immune to creative destruction, and a number of once outstanding gastronomical meccas have either
slipped or disappeared from our firmament. Our stellar team of ever-discerning tasters—Forbes editor Randall Lane,
Forbes contributor Richard Nalley and preeminent media maven Monie Begley, as well as brothers Bob, Kip and Tim—
herewith unveil their list of where you can enjoy the city’s most savory comestibles.
++++
Aska Daniel The Grill Marea
Atera Del Posto Jean-Georges The Modern
Bâtard Eleven Madison Park La Grenouille Per Se
Blue Hill Gotham Bar and Grill Le Bernardin
Gramercy Tavern Majorelle
Daniel is still stunning and hard to beat in a town of exception- ered the fountain of youth. It’s dinner as theater: superb food
al dining. At Majorelle you will be served—impeccably—one that doubles as outstanding art. Like the musical Hamilton, this
of the best meals you’ve had in ages, traditional French fare with show is expensive—and worth every cent. An additional choice
Moroccan influences and a contemporary flair, in a classically for those who are not cost-conscious is Eleven Madison Park,
appointed dining room with magnificent floral arrangements which has undergone a total renovation. The result is simply
in the Masson family tradition. Forget dieting—desserts here stunning, architecturally and gastronomically. The Modern
are an absolute must. Another new source is another exceptional culinary temple
of a most memorable meal is The Grill, that closed down operations for several
which occupies part of the space of the old
Four Seasons. Walking into this landmark
CLASSICS months for a highly successful renova-
tion. The tasting menus here combine
is like seeing an old friend who’s discov- These enduring epitomes of eat- the artful and the sophisticated.
ing excellence have been crucial in
MAJORELLE establishing New York as the cuisine GOTHAM BAR AND GRILL
capital of the world.

Aquavit
Nippon
Nobu Downtown/Nobu 57
One if by Land, Two if by Sea
Peter Luger Steak House
The River Café
Shun Lee Palace
THE GRILL ‘21’ Club THE MODERN
NOBU DOWNTOWN
ERIC LAIGNEL; ADRIAN GAUT

FORBES
ABC Kitchen
+++
Gabriel Kreuther Michael’s
Ai Fiori Il Buco Momofuku Ko
Antonucci Cafe JoJo Monkey Bar
Aretsky’s Patroon Junoon NoMad
Avra Madison Keens Steakhouse Perry St
Café Boulud La Vara Porter House Bar & Grill
Carbone Le Coucou The Simone
CUT by Wolfgang Puck Maialino Union Square Cafe
Fusco Marc Forgione Vaucluse
The Mark Restaurant
After two decades, JoJo UNION SQUARE CAFE VAUCLUSE

closed for a year-long reno-
vation, its antique setting
replaced by a new, spar-
kling, cool, intimate version.
Beloved traditional dishes
have become nightly spe-
cials. The new menu soars,
creating course after course
of American classics with
a masterful mix of ingre-
dients. Fusco is chef Scott
Conant’s tribute to his Ital-
ian grandmother. And what
an homage it is—the room’s
beauty enhanced by softly lit chandeliers and banquettes Steakhouse deservedly remains a magnet for red-meat eaters.
encircling the space. The food is bewitching—the diver The plentiful servings and big-pour cocktails are enhanced
scallops are perfection, the desserts divine. La Vara uniquely by the dark-wood, 1880s-saloon vibe and the famous clay-
and delicately combines Spanish, Sephardic and Moorish pipe-hung ceiling. Il Buco is a cozy, faux-rustic, tin-ceilinged
influences, which make a meal here a must for any who savor artisanal Italian eatery that has been attracting downtown
innovative culinary excellence. Reopened in a big, new and scenesters for years with its flavorful offerings and noteworthy
beautiful location, Union Square Cafe’s take on its classic wine list. Another enduring member of the Three Star firma-
dishes—as well as many new ones—is just as scrumptious as ment is Aretsky’s Patroon with its always enticing American-
ever. Reservations made well in advance are a must. Keens based menu headlined by New York’s tastiest crab cakes. Dark
and sexy, with the aroma of a wood-burning
grill, Marc Forgione may be one of the Big
Apple’s most underrated gems. The selections
from its farm-, ocean-, forest-to-table kitchen
pack in the patrons. Gabriel Kreuther serves
up creative and superb dishes, such as a stur-
geon-and-sauerkraut tart topped with caviar.
EMILY ANDREWS; CONNIE ZHOU; ELLEN SILVERMAN
The setting is an airy room with some delight-

fully eccentric touches. Perry St’s deliciously
diverse menu of new American cuisine is
perfectly complemented by the understated
modern decor and friendly, low-key ser-
vice. Among NoMad’s delectable delights
is the glistening roast chicken for two, with
foie gras and truffles rubbed under the skin.
Created by master chef Daniel Humm, this
MAIALINO
is one of the city’s signature dishes.

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FORBES
SPECIAL
abcV with Jean-Georges—Leonardo himself couldn’t ren- BENOIT
der these vegetarian dishes more vividly and artfully—or
deliciously.
Al Vaporetto—Venetian classics with a flair served in a ro-
mantic, cozy setting. Save room for the perfect crème brûlée
or the Italian version of a floating island.
American Girl Place Cafe—Young girls and their dolls,
perfect together.
BBQ ROUNDUP: Dinosaur Bar-B-Que / Fette Sau /
Hometown Bar-B-Que / John Brown Smokehouse /
Mighty Quinn’s.
Benoit—Beautiful bistro, fantastic fare.
Café Centro—Grand Central location and tip-top food have
made this the perfect place for business breakfasts. Also
busy at lunch and increasingly so at dinner.
Center*Bar—The nearby Christopher Columbus statue is
under assault, but no one can
fault the fine wines, imagina- Il Cantinori—Another Village institution serving first-rate
tive cocktails and delightful Tuscan fare. Patrons anticipate the long list of daily specials.
small-plate fare found here. Italienne—Sensationally and successfully blends northern
Chinese Tuxedo—The jewel Italian and southern French cuisines. Decor combines old-
of Chinatown, set in a for- world charm with a modern aesthetic.
mer opera house. The flavors L’Artusi—Tough to get in. And no wonder, what with its won-
of each dish are amazingly drous wine list and out-of-this-world Italian comfort food.
unique. Maison Pickle—Excels in classic American favorites. Final
Chumley’s—Some of the best excess: heavenly 24-layer chocolate cake.
American bar food on offer at NO-BULL BURGERS: Aureole’s Liberty Room / bar Sar-
this restored speakeasy, which dine / Black Tap / burger joint / Corner Bistro / Ear Inn /
in the 1920s boasted a glittery The Happiest Hour / J.G. Melon / Minetta Tavern / Shake
literary following. CHINESE TUXEDO Shack / The Spotted Pig / Tetsu / Upland.
Cote—Outstanding Korean Nur—Eye-opening newcomer from Tel Aviv’s celebrity chef
steak house KOs the competition. Guests cook meat over in- Meir Adoni. Tantalizingly tasty food exudes high energy.
table grills, but waiters will swoop in quickly if it looks like a Most dishes are served on platters, family-style. Everyone is
beautiful piece of beef might be ruined. soon reaching, passing and spearing.
Cowgirl—Funky, fun West Village spot offering some mouth- PIZZA PERFETTA: Bleecker Street Pizza / Di Fara /
watering Western/Southwestern cooking. Emily / Joe’s / John’s of Bleecker Street / Kesté / Lucali /
Grünauer Bistro—Provides a variety of wondrous Wiener Louie and Ernie’s /Marta / Martina / Pizza Beach / Prince
schnitzels, goulash, red cabbage and other authentic Austrian St. Pizza / Roberta’s / Table 87 / Waldy’s Wood-Fired
classics. Elegant setting, impeccable service. Pizza & Penne.
Hao Noodle—Turns traditionally pedestrian street-food The Polo Bar—Equine artwork is no match for the scene
dishes into fine dining. of people who come to be seen here, and neither can hold a
I Sodi—A Tuscan treasure set in the West Village. candle to the great cocktails and fine fare.
Quality Eats—All offerings are generous and delicious, and,
L'ARTUSI
best of all, the steaks and fish are priced at or below $31. Sides
are not to be missed; desserts are outstanding, especially the
crème brûlée cake.
Sadelle’s—Unbeatable bagels, unsurpassable salmon salad,
PIERRE MONETTA; SARAH VAN LIEFDE
great grilled-cheese sandwiches and fabulous French toast

are among the gems on this matchless menu.
St. Anselm—Outstanding steaks and sumptuous seafood
washed down with unconventional yet high-quality wines and
cocktails are yours to be had at this rustic Williamsburg grill.
White Gold Butchers—This butcher-shop-cum-restaurant
offers the most magnificent meats imaginable.

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LeaderBoard
26
THE NHL’S MOST
30
HIGHEST-EARNING
32
MOGULS’ TOP
34
SHE COINED
36
THE (OIL-BARREN)
VALUABLE TEAMS YOUTUBE STARS XMAS GIFTS “THE CLOUD” SPIRIT OF ’76
SEAT OF POWER
PATRIOT’S
PLACE
AT WORK, New England Patriots
owner and five-time Super Bowl
champ Robert Kraft, 76, is never
far from the NFL dynasty that has
made him a billionaire several
times over. His office sits inside
Gillette Stadium, the Foxborough,
Massachusetts, arena Kraft built
and to which he commutes from
his home in suburban Brookline.
Around the corner a showroom
displays the five Vince Lombardi
and nine conference championship
trophies won by the Patriots. (Kraft
PHOTOGRAPHED BY MARTIN SCHOELLER FOR FORBES
LeaderBoard
SEAT OF POWER Kraft embraces India-
napolis Colts center Jeff
purchased the team in 1994 for $172 million using profits from his paper- Saturday at the end of
and-packaging conglomerate.) A few steps away is a private elevator he takes the four-month NFL
lockout in 2011. Kraft is
to the Pats’ locker room and sidelines on game days. considered to have been
The office, which is next door to his son Jonathan’s, shares the space instrumental in bringing
that serves as headquarters for Kraft’s other ventures, including his Major it to a close just five
days after his wife, Myra,
League Soccer team, the New England Revolution, and one of his paper- died of cancer.
and-packaging manufacturers, International Forest Products.
An Emmy for
outstanding An orchid sent by
achievement in a Shortly after Kraft received his 2005 Super longtime friend
sports series, won in Bowl ring, he visited St. Petersburg, Russia, Elton John and his
2007 for the Patriots at the invitation of then Citigroup chairman family for Kraft’s 76th
All-Access television Sandy Weill. Joining Rupert Murdoch, Weill birthday in June. The
show. and several others, Kraft met with Vladimir card is signed by
Putin at Konstantinovsky Palace. “Sandy John’s family: “Happy
said to me, ‘Show the president your ring,’” birthday, with all our
Kraft says. “So I took it out, and you can love, Elton, David,
Four duplicate Super Bowl rings too
see he’s holding it there.” Zachary & Elijah.”
large to wear sit on Kraft’s shelf. (He
January 1997 included recently added a fifth, marking last
a New England Super season’s Super Bowl win. The five have
Bowl appearance and more than 750 diamonds among them.)
President Bill Clinton’s There are also three rings from AFC
second-term inaugura- Championship games.
tion. Clinton signed a
Patriots hat for Kraft:
“We’ve had good years.”

Without the Jackson 5, Kraft might
not own the Patriots. The team’s
financially troubled original owners When Gillette Stadium opened in 2002, Kraft remem-
put the stadium in Foxborough up as Growing up in an observant Jewish bers U2’s “Beautiful Day” playing over the loudspeakers
collateral to promote the pop group’s family, Kraft never played football during a sound check while he sat in the stands with his
1984 Victory Tour, with plans to pay in high school because he wasn’t son Jonathan. “I got emotional, and I got tears,” says
back mounting debts. But the deal permitted to travel during the Kraft, who privately financed the stadium’s construc-
ultimately backfired, only worsening Sabbath. As a Columbia Univer- tion. “I mean, we had everything on the line.” Kraft told
the owners’ woes. It was the catalyst sity freshman in 1959, though, he Bono and U2, which has held several concerts at Gil-
Kraft needed to purchase the venue, walked onto the school’s team. lette, about that moment, and the foursome sent him a
bringing him a step closer to scoop- He played halfback and safety for Gretsch electric guitar signed by each of them. The lyr-
ing up the Pats in 1994. three years, wearing No. 20. ics to “Beautiful Day” run along the instrument’s edge.
“It’s gonna be hot “That was the beginning,” The Krafts and the
out there. If you get Kraft says of the Tuck Kennedys go back Known for wearing sneakers no
real hot, here’s a hat,” Rule, a controversial NFL decades. During the 1960s matter the occasion, Kraft has
A “Kraft” ambigram
Kraft remembers decision—involving a Kraft worked a stint in two pairs of Nikes beside his desk.
sent by Da Vinci
telling the Dalai Lama quarterback dropping politics, serving as chair- Nike has even had special-edition
Code author Dan
in May 2009 when the ball midpass—often man of Boston’s Newton sneakers made in his name, like the
Brown, a friend.
the Buddhist leader credited with helping the Democratic City Committee. Air Force 1 Ultra Flyknit Low “RKK”
Kraft says the two
(Kraft’s initials).
PHOTOGRAPHS BY JONATHAN KOZOWYK
spoke to 15,000 Patriots win their AFC (and their wives) He also helped Senator Ted
people at Gillette championship game appeared as extras Kennedy (pictured, right,
Stadium, handing against the Oakland in scenes shot at with Kraft’s family) run his
him a Patriots cap. Raiders in 2002 (and, the Louvre in the reelection campaign. In 1976
“He walked out, and ultimately, their first Super 2006 Da Vinci Code Kraft hosted a campaign
BY MICHELA TINDERA
he put it on.” Bowl). Kraft’s copy of the movie. party for Kennedy at his
photograph sports a note Brookline home.
from Jon Gruden, the
Raiders’ coach at the time:
“It was a fumble.”

LeaderBoard
SPORTSMONEY RICHEST BY STATE
THE MOST
VALUABLE
HOCKEY INDIANA
POPULATION: 6.6 MILLION
TEAMS The Golden Knights’
William Karlsson
2016 GROSS STATE PRODUCT:
$342 BILLION (1.5% GROWTH)
GSP PER CAPITA: $51,546
WITH THE SPEED of a slap GOLDEN RETURNS (RANKS NO. 28 NATIONWIDE)
shot, National Hockey League
The $500 million paid by the Vegas Golden Knights to join NUMBER OF BILLIONAIRES: 3
franchise values have increased the NHL is a good baseline value for hockey franchises— RICHEST:
at 15%, their fastest pace in and illustrates the league’s substantial financial success. CARL COOK
three years; the average club is
The inflation-adjusted price of admission to the NHL has NET WORTH: $8.1 BILLION
now worth $594 million. Profits increased at a 7.4% compound annual rate since 1967
in the NHL—which this season when compared with the Knights’ fee. The next round of FOR OVER 50 years, Cook Group’s
includes a new team, the Vegas expansion (1970) has returned 5.8%, and the most recent catheters, filters and stents have helped
Golden Knights—increased expansions (1992, 1997) have done the best: 7.7%. patients get healthy, and proceeds from
significantly, too, by 20% to Put another way, hockey owners have averaged a 7% their sales make up the bulk of heir
an average of $18 million. For annual return since the NHL’s first major expansion. and CEO Carl Cook’s fortune. Lately,
more, including our list of the The S&P 500, by contrast, has posted an annual price though, the company’s IVC filters, spi-
league’s top-earning players, appreciation of just 2.5% in that time, net of inflation—and der-shaped devices used to prevent
visit forbes.com/nhl-valuations. even if you include dividends, that’s still just a 5.6% return. blood clots, have been at the center of
roughly 3,000 lawsuits from patients al-
leging that they’re faulty. The company
TEAM TEAM won its first trial in November after a
CURRENT VALUE 1-YEAR % CURRENT VALUE 1-YEAR %
($MIL)1 CHANGE VALUE ($MIL)1 CHANGE VALUE jury determined that the plaintiff—a pa-
1 NEW YORK RANGERS 17 ST. LOUIS BLUES tient whose filter got stuck inside her,
$1,500 20% 450 45 causing internal injuries—failed to prove
2 TORONTO MAPLE LEAFS 18 MINNESOTA WILD the filter was defective. But Cook, which
1,400 27 440 10 insists its filters work, will face at least
3 MONTREAL CANADIENS 19 CALGARY FLAMES two more trials in 2018.
1,250 12 430 5 The Cook clan has long kept a low
4 CHICAGO BLACKHAWKS 20 OTTAWA SENATORS profile. Carl’s founder father, Bill, hated
1,000 8 420 18 being on The Forbes 400. “Every nut in
5 BOSTON BRUINS 21 NEW JERSEY DEVILS the book is going to be after me now,” a
890 11 400 25 colleague recalled him saying after join-
6 LOS ANGELES KINGS 22 NEW YORK ISLANDERS ing the list in 1988, according to a 2008
750 25 395 3
biography, The Bill Cook Story: Ready,
SPORTSMONEY BY MICHAEL OZANIAN AND KURT BADENHAUSEN; RICHEST BY STATE BY MICHELA TINDERA
7 PHILADELPHIA FLYERS 23 TAMPA BAY LIGHTNING Fire, Aim! Carl, 55, has a similar attitude.
740 3 390 28
“Whenever [Forbes has] contacted us,
8 VANCOUVER CANUCKS 24 COLORADO AVALANCHE
730 4 385 7 we’ve pretty much told them to go to
hell,” he said in the book. True to form,
9 DETROIT RED WINGS 25 NASHVILLE PREDATORS
700 12 380 41 Cook wouldn’t comment for this story.
10 PITTSBURGH PENGUINS 26 WINNIPEG JETS
650 14 375 10
11 WASHINGTON CAPITALS 27 CAROLINA HURRICANES
625 9 370 61
12 EDMONTON OILERS 28 BUFFALO SABRES
520 17 350 17
13 DALLAS STARS 29 COLUMBUS BLUE JACKETS
ILLUSTRATION BY CHRIS LYONS FOR FORBES; AP
515 3 315 29
14 VEGAS GOLDEN KNIGHTS 30 FLORIDA PANTHERS
500 N/A 305 30
15 SAN JOSE SHARKS 31 ARIZONA COYOTES
490 4 300 25
16 ANAHEIM DUCKS LEAGUE AVERAGE
460 11 594 15
1Enterprise value (equity plus net debt) of team based on current arena
deal (unless new arena is pending).

Wounded Warrior Project
helped me reclaim my life.
WOUNDED WARRIOR
SEAN KARPF
HELP MAKE AN IMPACT AT iamlivingproofwwp.org

©2017 Wounded Warrior Project, Inc. All Rights Reserved.
LeaderBoard
30 UNDER 30
PROPERTY PROS
Keeping the home fires burning with the
Forbes 30 Under 30, in 30 words or less.
DAVID WALKER
Triplemint | 29
The Yale alum’s online
brokerage bypasses
Realtors, using
“predictive analytics”
and other big data
to match buyers and JEMUEL JOSEPH, ALEXIS RIVAS
renters for not-yet- Cover Technologies | 24, 24
listed properties. Rev- Combating L.A.’s housing shortage,
enue for 2017 could Cooper Union grads design, secure per-
hit $6 million. mits for and construct backyard prefab
structures up to 1,200 square feet. They’ve
SUNDEEP KUMAR, HASIER raised $1.6 million from General Catalyst,
SAM BERNSTEIN LARREA Khosla Ventures, others.
LoftSmart | 25, 23 Ori | 29
The graduates of incubator AngelPad Live like the Jetsons BRIAN JONES,
created the first national transactional with this MIT grad’s LUKE SCHOENFELDER
marketplace for off-campus student origami-inspired Latch | 28, 28
housing. Seeded with $5 million, furniture, backed Lost your house keys again? Open Latch’s
LoftSmart has more than 250,000 leases by $6 million from smart locks with your phone, keycard
available for near-instant booking. Khosla Ventures. or PIN code; admit visitors and package
The robotic furnish- deliveries remotely, too. The duo has raised
ings transform from $26 million.
bed to dresser to
desk and back.
AJAY YADAV
Roomi | 30
Party animals and
SHRUTI MERCHANT, early risers alike can
KERRY JONES DAVID MAGID find the perfect pad
30 UNDER 30 BY ALEXANDRA WILSON
YSG Solar | 29
ILLUSTRATIONS BY AARON SACCO
HubHaus | 24, 28 thanks to Yadav’s app,

Jones and Merchant tackle L.A. and The New York City company, founded by which has secured
Bay Area lodging woes with commu- the son of a Peruvian immigrant, designs, $17 million in financ-
nity housing for professionals. So far finances and installs custom solar proj- ing to help all person-
375-plus residents in 66 homes enjoy ects for homeowners. Revenue in 2017 ality types find like-
perks like free Wi-Fi and wine nights. exceeded $3 million. minded housemates.

LeaderBoard
YOUTUBE STARS
LOGAN PAUL
The video blogger, who sticks to topics like
his dog, has transitioned to clothing design
DUDE PERFECT with a hit brand, Maverick.
Five friends and their
group mascot—a guy
in a panda costume—
perform stunts and
SMOSH
stupid tricks, such as
Anthony Padilla and
wrestling while encased
Ian Hecox (pictured)
in bubble wrap.
were comedy-show
pioneers on YouTube
but split up in June.
RYAN
TOYSREVIEW
EVAN FONG The elementary-
Fong plays school-age Ryan
DANIEL
ultrapopular has every kid’s
MIDDLETON
games like Grand dream “job”:
Since launching
Theft Auto and FELIX KJELLBERG reviewing toys.
his channel in
Call of Duty, and Kjellberg, a.k.a. PewDiePie, once
2012, the British
sponsors shell out topped our list but had a terrible
Minecraft player
up to $450,000 2017: Some advertisers dropped
has amassed
to appear in his the gamer after incidences of racist
over 11 billion
videos. images in his clips. But he still has
views, published
nearly 60 million followers, and his
a graphic novel
ability to draw a crowd has spurred
and embarked on
some brands, such as Razer and
a tour of 50-plus
Origin PC, to crawl back.
shows, including
4 sold-out nights
MARK FISCHBACH
at the Sydney
The gamer’s 19 million
Opera House.
subscribers know him as
Markiplier, and given his JAKE PAUL
reputation for dramatic A video blogger like
play-by-play commentary, his older brother,
it’s no surprise that he Logan (No. 5), the
1. recently did a sketch- ex–Disney Channel
DANIEL comedy tour across the star now has a LILLY SINGH
MIDDLETON 2. U.S. and Europe. talent-management She translated her inspirational
$16.5 MIL EVAN FONG company, too. video diaries into a six-figure
Games $15.5 MIL advance on the New York Times
Games 3.
bestseller How to Be a Bawse.
DUDE
PERFECT
4. 4.
$14 MIL 6.
MARK LOGAN PAUL
Stunts/tricks FELIX 7.
FISCHBACH $12.5 MIL
KJELLBERG JAKE PAUL 8. 8.
$12.5 MIL Video blogs
$12 MIL $11.5 MIL RYAN SMOSH 10.
Games
Games Video blogs TOYSREVIEW $11 MIL LILLY SINGH
$11 MIL Comedy $10.5 MIL
Children’s toys Video blogs
ATTACK OF THE GAMERS

THE HOTTEST stars on YouTube might spend most of their time in pixelated
worlds, but make no mistake: They’re collecting millions of dollars in cold, hard
CNANA RAUSCH / QUICKHONEY.COM
cash. Nearly half of our annual list of the top-earning YouTube celebrities are
gamers, and gamers occupy the top two spots. Viewers flock to their channels
to watch them play the latest titles while delivering funny commentary. Six
BY MADELINE BERG
of the ten celebs ranked here are newcomers, who delight fans with videos of
stunts, gleeful children and Call of Duty battles.

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LeaderBoard
NEW BILLIONAIRE THEIR FAVORITE THINGS
WHAT WAS
RAZER’S EDGE YOUR MOST
MEMORABLE
Min-Liang Tan may be creating Asia’s HOLIDAY GIFT?
next great tech giant. But losses at
Razer are mounting.
FOR AS LONG as he can remember,
Min-Liang Tan hasn’t gotten more than
“Right after World War II, my father was
four hours’ sleep. Most recently, THX saving to buy himself a new suit. Instead
has kept him up at night. Tan bought he bought me a brand-new red tricycle.”
the audio company, founded by George —Ron Baron, founder, Baron Capital
Lucas, last October for an undisclosed
sum. “We’ve got a lot of expectations
to grow into the entertainment space:
movies, music and things like that,” says
Tan, dressed in his usual black shirt and “The Barbie Dream House. It is basically
blue jeans. “That’s something we are where I manifested my adult life!”
really excited about.” —Carolyn Rafaelian, founder, Alex & Ani
Tan, 40, has spent the last few years
expanding the reach of the Singapore-
and San Francisco–based Razer, a
12-year-old company best known for
“A picture of my son’s essay from
gaming laptops and accessories. In July first grade saying that I was his hero
2015 Razer bought the software assets of and that he wanted to be just like
Ouya, an Android gaming console, and me when he grew up.”
in January 2017 it snapped up Nextbit, —Mark Cuban, owner, Dallas Mavericks
an Android phone maker. Right around
the time of Razer’s November IPO—in
which Tan retained a 34% stake worth
some $1.6 billion—the company un-
veiled its first smartphone.
Throughout all this, Razer has swung “My folks didn’t have much money,
but I was very excited when I was
from a $20 million profit in 2014 to a
8 and my dad brought me home a
$20 million loss in 2015 and a $60 mil- cardboard box with holes in it—so
lion loss in 2016. I knew something was alive. There
Tan’s ambitions are undimmed. “Life was a pigeon inside! He worked on
is short,” he says. the railroad, so he had caught it and
brought it home. From that point on,
I have always had pigeons.”
—Frank VanderSloot, founder,
NEW BILLIONAIRE BY JESSICA LOUISE TAN; FAVORITE THINGS: AS TOLD TO MADELINE BERG
Melaleuca health products
DAVID PAUL MORRIS/BLOOMBERG; ILUUSTRATIONS BY DAVID URBAN
“I was about 11 years old and my brother

was 8. We got up particularly early,
went downstairs before my parents
and ripped into our packages. We each
got a pellet gun and proceeded to use
the antique bulbs on the tree for target
practice. It started out as each of us
shooting just one—I don’t remember
who started it—and by the end, when
our parents came down, all the antique
bulbs were destroyed. Of course, the
guns were taken away. I don’t remember
ever seeing them again.”
—Bob Parsons, founder, GoDaddy

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LeaderBoard
THE 10-Q LIQUIDITY
my career in Silicon Valley in a What if a billionaire
very different way, doing start- became a cocktail?
ups. I dealt with it by listening
and finding ways where I could
contribute. I built relationships.
Today, I would have the confi-
dence to make a faster start.
You served on FedEx’s board for
21 years—and on Disney’s for 15.
Disney was a very different
company. Michael Eisner was the
CEO. He and Disney had just got-
ten written up for being the worst
board in America—too insular.
My job was to help Disney under-
stand the internet.
When you were sitting on FedEx and
Disney’s boards, how much time did
you allocate to that work?
I probably spent more hours on
Disney than on FedEx, partly be-
cause there was also more going
on at Disney—the Comcast bid
MOTHER OF THE CLOUD

and the Eisner-to-[Bob] Iger suc-
cession. Board seats are not a full-
time job, but you always have
Silicon Valley veteran Judy Estrin on coining
to be prepared and ready to
the term “cloud computing,” recruiting leaders jump in with both feet anytime.
who are women and saving Disney. What advice do you have for people
What did you have in mind when you wrote your

who want to join boards?
Every company is being impacted by the accel- THE WARREN
famous “Cloud vs. Strings” paper in 2000?
We were advocating for the new converged
erating change of technology. Boardrooms are
crying out for directors who not only under-
BUFFETT
voice/data infrastructure to look more like stand technology but also understand how to CREATOR:
the Internet than traditional telephony. Today navigate through change. Bryan Schneider
“cloud” has an expanded definition. It means Smith & Wollensky
Paradoxically, often the best thing a board can do, New York City
massive computational power available “in the you’ve said, is slow things down. (a regular Buffett haunt)
cloud”—i.e., over the internet. Think of an athlete who may be agile, but you
How should CEOs think about cloud technology? need a strong core. Companies need to be INGREDIENTS:
5–6 mint leaves
CEOs must think about the cloud. The cloud cross-trained. You can’t run after every change.
½ oz. vanilla cherry syrup
accelerates the adoption of new technology, All boards say they want more women. 2 oz. aged rum (12-year El Dorado
which means it also accelerates business evolu- How should they recruit them? recommended)
tion. Your competitors are thinking about it. You’ll end up with better board members if ½ oz. fresh lime juice
You can’t just delegate [it] to your tech people. your approach is, yes, we’re interested in di- 4 oz. Coca-Cola
LIQUIDITY: AS TOLD TO ABRAM BROWN, LEAH BOTTONE AND GREG ANDERSSON
Marasca cherries
Yet even today, most corporate boards ghettoize versity. But we’re also interested in these types
information technology to the audit committee. of capacities or domain expertise, or type of In a 2-ounce glass, muddle the mint
Is that a mistake? leader. You really want to find a great board leaves in the vanilla cherry syrup. Add
Yes. Boards need to consider how technology member first and then work to have diversity. next three ingredients and fill glass with
drives strategic advantage. That’s how Fred crushed ice. Stir briefly. Top with more
Silicon Valley, your home turf, is still pretty hostile crushed ice. Garnish with mint leaves,
Smith and FedEx saw it when I served on Fed- to women on boards. What’s going on? cherries and drizzle of syrup.
Ex’s board. But Fred was ahead of his time. The recruitment pools are too small. Board
Speaking of FedEx, you were its first woman members come from venture firms or they’re INSPIRATION:
director. “Warren Buffett is well-known for
TIMOTHY ARCHIBALD FOR FORBES
former CEOs. The resulting problem is not just

I was 36 when Fred asked me to join. It was his love of Cherry Coke, so we’re
the sexual harassment you read about. It’s an making a boozy riff on his favorite drink.
hard at first. I was the only woman. I had built insularity that hurts agility and dynamism. Like a good Buffett stock, there’s a
venerable aged rum in it. But if you
want to enjoy this cocktail in true
JUDY ESTRIN SPOKE WITH RICH KARLGAARD, OUR EDITOR-AT-LARGE Buffett style—he’s a well-known
AND GLOBAL FUTURIST. THIS INTERVIEW HAS BEEN EDITED AND CONDENSED.
FOR THE EXTENDED CONVERSATION, VISIT FORBES.COM/SITES/RICHKARLGAARD. teetotaler—just omit the rum.”

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LeaderBoard
FORBES @ 1OO
During our centennial year, we’re unearthing our favorite covers.
POWER CUT: JULY 15, 1976

SIGN OF THE TIMES
Vandemonium
The Big Three automakers were on track to sell 520,000 vans in ’76,
up nearly fivefold in six years. The trend had started “in California
when surfers began using cargo vans as luxury campers. The fad has
spanned Manhattan and [reached] into prim New England.”
AMERICA WAS one of the world’s two superpowers, but

it remained dangerously dependent on foreign oil. The
1973 OPEC embargo—imposed on America in retalia-
tion for weapons sales to Israel during the Yom Kippur
War—had cost the United States between $10 billion
and $20 billion in gross national product (upwards of
$86 billion today) as well as 500,000 jobs. It exposed
the country’s extreme dependence on foreign oil, a
“vulnerability to supply interruptions [that] will get
worse, not better.” Sure enough, another oil shock
would hit in 1979 after the Iranian Revolution.
As America sank into another recession, blocks-
long lines at gas stations nationwide again
became a daily test of endurance.
Despite the warning calls sounded by
Forbes and many others, reliance on foreign
oil worsened in the ensuing decades,
reaching a peak of nearly 3.7 billion im-
ported barrels a year in the mid-2000s.
That figure has declined by 22% since,
as technological advances such as
hydraulic fracking and horizontal
drilling have offered access to new
U.S. oil and gas reserves.
NOTABLE AND NEWSWORTHY

Brighton Beach Millions
Neil Simon didn’t need to blow his own horn:
He was a “one-man entertainment conglomerate”
who earned in the mid–seven figures just for the
film outline of The Odd Couple; he had also written
1976’s Murder by Death (below).
THE EDITOR’S DESK

Their Highnesses
More than 10,000 spectators attended the
second annual gathering of hot-air balloonists,
AMAZING AD hosted by Malcolm Forbes at his Normandy
Yankee Doodle Diesel estate. Each paid $2.20 (roughly $10 today)
Southern Pacific launched a fleet of to see pilots from a dozen countries, all
BY ABRAM BROWN
red, white, blue and gold trains to personally selected by Malcolm, maneuver
mark the country’s bicentennial— their buoyant craft through the skies.
LEFT: ALAMY
freight locomotives that continued

to do “a job we’ve been doing
for 125 of the 200 years we’re
celebrating in 1976.”
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LeaderBoard
CONVERSATION
READERS OF OUR December 12 issue

would’ve been remiss had they swiped
past Clare O’Connor’s cover story on
Forbes 30 Under 30 newcomer Whitney
Wolfe Herd. A cofounder of dating app
Tinder, Herd left the company and sued
it for sexual harassment in 2014, then
started Bumble, a dating app that lets
women securely make the first move. ROSS’ RUSE
O’Connor’s piece gained salience from
The commerce secretary has been fudging
the recent avalanche of workplace-mis- his net worth for years—and readers
conduct claims, noted @SirenofBrixton reveled in taking Wilbur to the woodshed.
on Twitter: “May all victims of sexual
harassment be able to serve revenge cold @ALEXBURNSNYT: “This is both
a revealing story about Wilbur Ross
in the epic way this woman has.” The and admirably honest on Forbes’ part
rest of this year’s talented tyros provoked about how they believe they were duped.”
reader admiration as well—especially
those way under 30. Noted ProPublica
politics reporter Jessica Huseman pi- @JAYROSEN_NYU: “You can’t
make this stuff up. Incredible
quantly, “The youngest on the Forbes story of Trump’s Commerce Secretary
Media #30Under30 list is 12. Just in case just making stuff up. Lies upon lies.”
you need help feeling useless today.”
@SUSAN_HENNESSEY:
THE INTEREST GRAPH “Imagine being the kind of person
with $700 million and being compelled
Youth will be served—with gargantuan page-view totals. This year’s 30 Under 30 drew the to lie about another $2 billion.”
most clicks from our December 12 issue by a factor of nearly 100.
The 2018 Forbes 30 Under 30 21,210,583 views
The Case of Wilbur Ross’ Phantom $2 Billion

@GROSSDM: “Can’t imagine what
233,660
would drive someone to lie about
their wealth to get on the Forbes list.
Maybe that’s why I’m only worth $2 billion.”
The Top-Earning Dead Celebrities of 2017
211,129
@BRIANBEUTLER: “Trump
has put the ethical culture of the
Billion-Dollar Bumble: How Whitney Wolfe Herd Built America’s Fastest-Growing Dating App rich under the world’s most powerful
microscope, and wow is it diseased.”
86,820
“Ross strung us
The Amazon–Whole Foods Deal Could Have Killed along, leading us
Instacart. Instead, the Startup Is Stronger Than Ever
to believe he would @DAVIDCORNDC: “Imagine a
32,364 provide evidence leader of government being a
gigantic and audacious liar. Oh, wait . . . ”
of his assets, but
never did.”
China’s Richest 2017: the Full List of 400 Billionaires “That morning,
CEO Apoorva Mehta
26,918
stood in front @NOLAN_MC: “Gotta think this is a
of Instacart’s 300 firing offense. How can Trump tolerate
Australia’s Richest 2017: How This College Dropout employees and told having a fake billionaire in his cabinet?”
Turned Billionaire Built a Fashion Retail Empire
them it was time
for war.”
ANTHONY KWAN/BLOOMBERG
17,432
“Rather than sulk
BY ALEXANDRA WILSON
about Tinder, Herd @LEVINECARRIE: “So great

Steve Jobs’ BMW Z8 Goes Up for Auction to see how @DanAlexander21
decided to compete
against it by focusing is tapping into the data Forbes has
THE BOMB on the needs of one
been collecting for years. No one else
could have done this.”
914 VIEWS segment: women.”

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Verticals
41
ENTREPRENEURS
48
TECHNOLOGY
52
STRATEGIES
SMA LL GIA N TS
Dreaming
of a
Polyethylene
Christmas
Not your typical Silicon Valley
company, Balsam Brands sells
fake Christmas trees and makes
real profits.
BY SUSAN ADAMS
THOMAS “MAC” HARMAN grabs hold of

the plastic-encased steel trunk of his company’s
7-foot-5-inch Noble Fir and pulls off the top sec-
tion. “This is a flip tree that’s really cool,” he says,
as he turns the bottom two thirds upside down.
The branches flatten over the metal base, which
rests on four wheels, ready to be bagged and
stowed in a closet until next year. One of Balsam
Hill’s most popular designs despite a $1,349 price
tag, the fake Christmas tree comes “pre-lit,” fes-
tooned with more than 1,000 LED bulbs.

Verticals ENTREPRENEURS
Based in Redwood City, California, where struggling wire-product manufacturing plant.

it’s surrounded by venture-backed tech startups For the next seven years he juggled work, busi-
like the cloud-storage company Box and the mu- ness school, the early days of Balsam and flights
sic-identification app developer Shazam, Balsam to Cleveland, until he finally sold the 30-employ-
Hill’s parent, Balsam Brands, stands out like Ru- ee company in 2007. The proceeds went to his
dolph the Red-Nosed Reindeer. The 11-year-old mother, but Harman says the experience gave
company has raised no venture capital, has few him confidence. He’d manufactured steel-wire
recurring customers and sells the most season- products and used the internet to find new cus-
al of products. “From a business standpoint,” says tomers, and he believed he could do the same
Harman, 41, “this is a stupid, stupid idea.” with Christmas trees.
But the Stanford M.B.A. has made it work. After graduating from Stanford in the spring
Launched in late 2006, Balsam is expected to of 2005, Harman spent six months kicking
reach $120 million in revenue this year. Of the around business ideas. Over coffee with Stan-
100 million U.S. households that put up Christ- ford friends at the Coupa Café in Palo Alto, he
mas trees, according to a Nielsen survey, 81% put joked about selling Christmas trees online. His
up fake ones. While 90% of the $1.2 billion fake- friends laughed, but when he searched,
tree market is captured by mass retailers (like he found only a handful of rudimentary
Wal-Mart and Home Depot) that sell trees made sites offering a limited selection. Since
by multiple vendors—most at less than half the it would be a seasonal business, he fig-
price of Balsam’s—Balsam targets people who ured he could run it part-time while
Balsam Hill’s 7-foot Silverado Slim Flip Tree, priced at $899, arrives in two pieces. Flip the lower portion up and the branches spread. Fit the top portion into the
trunk, plug in an extension cord, and it’s Christmas.
want to invest in a higher-quality tree. pursuing other projects.

To make them, Harman uses five factories In June 2006, after connecting with a Stanford
in China, with some specializing in specific tree business school alum whose family ran a Chinese
types or parts, like boxwood topiaries that have factory that manufactured artificial Christmas
fake leaves instead of needles. For needle trees, he trees for the U.S. market, he traveled to Dongguan
trademarked the phrase “true needle” to describe with a stack of photos and several guides showing
the polyethylene spikes that surround each hand- the kind of detail he wanted to produce on 16 va-
painted stem. Miss the smell of a fresh-cut tree? rieties of fake pine trees. With $120,000 he raised
Balsam sells a $99 fragrance machine. from friends and family, combined with savings
Harman traces Balsam’s origins to 1999, from his McKinsey days, he ordered 15,800 trees,
when he paid his first holiday visit to his Ko- staggering delivery from the Chinese factory so
rean-immigrant in-laws in Beaver, Pennsylva- he could pay for them in increments. He sold the
JAMEL TOPPIN FOR FORBES; MODEL: LUNA TOPPIN, AGE 3
nia. Remembering the live trees he grew up with trees from a website with descriptions he wrote
in Cleveland, he cringed when he saw their fake himself and from a pop-up store at the Stanford
one. “It was just a really sad, cheapo tree,” he re- mall. Maxing out his personal credit cards, he
calls. “The needles looked like green plastic spent $300,000 on marketing. He hired a search-
sheets that had been put through a shredder and engine-optimization consultant but poured most
attached with wire.” of the money into pay-per-click ads, which drove
At the time, he was 23 and working as a con- Balsam’s first-season sales to $2.9 million.
sultant in the Cleveland office of McKinsey. Two Early on, hiring was tough, with nearby tech
years later his father died of lung cancer at age startups offering fat salaries, nap pods and mas-
59. An only child, Harman took over his dad’s sage rooms. Harman’s selling point was his com-

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Verticals ENTREPRENEURS
mitment to being an atypical Silicon Valley start- site repeatedly but wait five years to buy a tree,”
MARGIN
up. He encourages parents on staff to leave early Harman says. PROPHET
to pick up kids and to work remotely as need- Selling on Amazon is also a challenge. “I call
ed. He and his wife, Stephanie, a physician, have Amazon a frenemy,” Harman says. The site takes
three children, aged 8, 6 and 2, and he helps a 15% cut and requires vendors to communi-
coach a Little League team. In 2010, on the rec- cate with customers through Amazon, which
ommendation of a Stanford friend, he start- precludes Balsam from sending special product
ed hiring in the Philippines, initially just to han- offers and from collecting data on Amazon pur-
dle online marketing. He soon discovered that his chases. But Harman has learned that Balsam has
Filipino staffers, who cost 30% less than their U.S. to be there because, according to a 2016 study
counterparts, were skilled at customer service, by the cloud-marketing company BloomReach,
graphic design, copywriting and operations, and more than half of all consumers start their prod-
he expanded the head count there to 75. uct searches on Amazon. His strategy is to offer RETAIL’S
As sales rose, Harman and his staff strug- a limited selection on Amazon but focus on Bal- SAVIOR?
gled to manage a crushing workload for the six- sam’s own site, which accounts for more than 95% The apps of Toronto-
week period when Balsam collects two thirds of of the company’s sales. based startup Tulip help
its annual revenue. That requires a temporary Last year, on the Monday before Thanksgiv- physical stores by enabling
staff to access product
army of 600 customer-service reps, up from Bal- ing, Amazon shut down sales of Balsam prod- and customer informa-
sam’s usual 20. He would prefer to stay busy year- ucts after a spike in orders tripped a fraud fil- tion instantly and close a
round, but his attempts to diversify have failed: ter. Harman says Amazon was unresponsive sale on the spot. Clients
include Saks and Toys “R”
He has tried selling $139 pet beds, an assortment until he called a well-placed friend at the com- Us. CEO Ali Asaria thinks
pany who pulled strings. Bal- Tulip—whose 2017 revenue
sam’s products suddenly reap- Forbes estimates at $15
HOW TO PLAY IT BY MARC GERSTEIN million—might help rescue
peared just as the company’s brick-and-mortar retail.
There is an old saying on Wall Street: “Don’t fight the float was making its way in
Give us an example of
tape.” And in retailing, the tape clearly favors Balsam’s the Macy’s Thanksgiving Day Tulip in action.
frenemy Amazon, which has provided lucky stock- parade. (An Amazon spokes- We saw three main
holders a 30% average annual total return since 2002. pain points with moms
woman declined to comment
Another option would be to buy Amplify Online Retail shopping for strollers at
ETF, which is stuffed with the likes of Stamps.com, Etsy,
on the incident, except to say Toys “R” Us. One: “Is this
that sellers “have access to the right model for me?”
Overstock.com and 36 other e-tailers. For those who really want to
Two: “What if you don’t
step on brick-and-mortar’s throat, invest in ProShares Decline of the 24/7 e-mail, phone and chat
have the right model in-
Retail Store ETF, which provides short exposure (daily return times support.”) store—can I get it shipped
minus one) to an index of 56 traditional retail stocks. Harman also spends mil- home?” Three: “Is it cheap-
er at a competitor?” Sales
Marc Gerstein is director of research at Portfolio123.com. lions on cable and network associates can now pull up
TV ads and on product place- prices from Amazon and a
ment, including decorating bunch of others.
of lighting fixtures and $300 above-ground plas- the sets for the CMA Country Christmas special Do stores really want to tell
customers they can get a
tic swimming pools manufactured by the facto- in Nashville. He relies on software that estimates product cheaper elsewhere?
ries that produce Balsam’s trees. He also bought the number of orders that come when the ads air, Toys “R” Us wanted to
a maker of low-priced Catholic items like plas- but the data have been inconclusive: “It’s all ex- say, “If you’re worried it’s
tic rosaries that sold for less than $1. Total loss- tremely messy and inaccurate.” Nevertheless, he cheaper at Amazon, I can
match that price for you.”
es: more than $1 million. Today non-Christmas says, the company has turned a profit every year
What about retailers that
merchandise still makes up less than 5% of Bal- since 2008. can’t match?
sam’s sales. Fluorescently lit and cluttered with artificial They can turn that part off.
Meanwhile, reaching Christmas customers trees, wreaths and flowers, Balsam’s headquarters One day you’d like to be in
through online ads has grown more expensive. is upstairs from a bank in a two-story 1970s of- industries such as medicine.
How big can Tulip be?
When Balsam started, Google AdWords delivered fice building. Harman says his Valley friends have
We’re focused on an even-
clicks for as little as ten cents each. Today the cost made fun of him for trying to sign a 14-year lease tual $100 billion market
to appear at the top of a search for a term like “ar- (the best he could do was 9). “My friends will be size, so we’re thinking very,
tificial Christmas tree” can run as high as $10 a on their fourth company in 20 years, and I still very big. The theme: What
will the future of work and
MARGIN PROPHET BY PETER CARBONARA
click, and only a tiny fraction of people who click plan to be doing this,” he says. “That’s the weirdest software look like when
wind up buying. “Some people come to our web- thing in Silicon Valley.” every worker has a tablet
or phone in their hand?
FINAL THOUGHT
“The Christmas tree is a symbol of love, not money. There’s a kind of glory to them when
they’re all lit up that exceeds anything that all the money in the world could buy.” —ANDY ROONEY

1,261 novelty gift items.
83 credit card transactions daily.
3 sliding ladders to reach the top shelves.
1 fully stocked gift shop.
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PROMOTION
NICHOLAS AIR:
MAKING PRIVATE AIR TRAVEL PERSONAL
Velocci: Private-aviation services, from charter
to jet cards, is an extraordinarily crowded market segment,
with low barriers to entry. How does Nicholas Air
differentiate itself?
Correnti: Think of Nicholas Air as a boutique provider with
a selective base of several hundred members. We’re not the
most expensive provider, but we’re not the cheapest, either. If
all someone wants is transportation from point A to point B at
the lowest possible cost, that’s OK, but that’s not Nicholas Air.
We’re in the business of providing a consistently superior travel
experience.
Our clients know that when they arrive at the airport for their
flight, the aircraft they requested will be waiting for them, and it will
have the Nicholas Air livery. They also know all of their preferred
amenities—from the magazines they like to read to the snacks and
beverages they prefer—will always be on board. It’s all about pro-
viding a highly personalized service.
NJ Correnti pictured with the Citation Latitude
Nicholas Air started out as an aircraft management
BY TONY VELOCCI company, correct?
That was in 1997, and our business has since evolved into a full-
service provider of jet cards, fractional ownership and lease
Choosing a private-aviation services provider shares. Today our most popular program is the jet card; we’ve seen
substantial growth in this area over the years. Also differentiating
can be a daunting task, with thousands of
Nicholas Air is that our business model is not predicated on using
such companies competing within a growing someone else’s aircraft to service its customers.
Unlike many jet card companies, we own and operate our own
market. Nicholas Air, while far from the fleet. We employ no intermediaries whose aircraft are put out to
largest, believes it offers a compelling bid based on their availability. Clients know they are buying ser-
vices directly from a company that maintains, dispatches and
value proposition that refined travelers operates its own aircraft, and that are flown by full-time Nicholas
Air pilots. We believe this level of control translates into a much
can embrace: a best-in-class product that smoother, safer and more reassuring travel experience. It’s an
guarantees a superior flight experience. important distinction from, say, 95 percent of jet card providers,
who are only brokers and own no aircraft of their own.
Founder and CEO Nicholas J. (NJ) Correnti
You obviously have strong feelings about this part
explains his company’s vision. of Nicholas Air’s business.
Yes. I believe it’s a very important distinction when comparing
companies. Owning our fleet and maintaining full operational
control at all times ensures a safer, more reliable private air travel
experience. Our pilots are assigned and dedicated to a specific
aircraft type, which greatly improves the crew’s awareness
and knowledge of the aircraft. All aircraft are maintained only
by the manufacturer’s authorized service centers, ensuring
all maintenance is properly complied with. The commitment
we make to our members is that they will enjoy a Nicholas Air
experience when they book their travel with us, and the biggest
part of that is the airplane and the crew. We know—because
For more information on the Nicholas Air advantage and its we own and fly them—that our airplanes are going to meet the
various programs, visit www.nicholasair.com. expectations our members have of us.
1 Business Aviation
PROMOTION
Citation CJ3 Phenom 300 Citation Latitude
Nicholas Air continues to manage aircraft for owners, The biggest appeal of the PC-12 is that it can land at many
does it not? smaller airports that otherwise would be inaccessible. It’s a
Yes, and we’re seeing that part of our business grow, because the private-aviation workhorse. Based on comparable cabin size, the
business jet market segment is on the upswing again. In addition Phenom 300 would be a good apples-to-apples comparison. On
to maintaining aircraft for corporations and individuals, Nicholas a 45-minute trip, the PC-12 would take about 10 minutes longer—
Air can help owners generate revenue by leasing them back to us not a huge difference—but cost about $1,500 less.
to supplement our core fleet, thus helping the owner offset the
costs of ownership. We also can help owners operate their aircraft Do you have any plans to expand the size of your fleet or
more cost-effectively by allowing them to piggyback on network add additional aircraft types?
savings for everything from fuel to scheduled maintenance and We try to add a minimum of two aircraft per year. Currently on
training. In addition, owners have access to our fleet when their our radar is the longer-range Longitude. Our decision whether to
airplane is out of service or when multiple aircraft are needed, incorporate it into the fleet will be based on members’ demand.
ensuring they always have access to an aircraft.
Exactly who are your customers or members?
You refer to your clients as members. Is there a membership Sixty percent are leisure travelers; 30 percent are business
fee associated with purchasing flight hours from Nicholas Air? travelers and companies, including large corporations that
There are no recurring annual fees, initiation fees or membership need to supplement their corporate lift; and the remainder are
dues like many other private-aviation companies charge. Our individuals and retired couples who sold their business or aircraft
members simply pay for a block of hours up front when using and still want to continue utilizing private air travel. As much as
the jet card, which grants them acceptance into our program 80 percent of all new business comes from referrals.
and access to our fleet. It’s very straightforward and transparent.
But we do not allow just anyone to join. We vet each prospect to Where does digital fit into your business strategy?
ensure they are a good fit for our program, which is why we refer We’ve had a lot of conversation internally about that. Our concern
to our client base as members. is the potential for social media to take away from person-to-
person interaction with our members. We assign a 24/7 personal
You described Nicholas Air’s jet card as the company’s core travel representative to every member. There’s no calling a
business. What makes it so popular? general number or going through prompts to reach a live person
First, it’s ideal for introducing people to private aviation and or leave a message. It’s direct communication using a personal
for anyone planning to travel between 15 and 60 hours a year. mobile phone number, and the representative will respond to
Second, there is no expiration date of the hours or aircraft whatever the member needs—from booking a flight to a special
repositioning fees. And third, the jet card gains the member catering request to purchasing an anniversary gift. We don’t want
access to our fleet, which averages 5 years old and newer. That’s to risk losing the human touch.
huge with our membership base, and there are not many in the Our biggest concern is the millennial generation, since they’re all
industry that can say this. With many other aviation companies, about digital communication, so it remains to be seen how impor-
people may not realize they’re dealing with a service provider that tant personal attention is to them. A large part of the Nicholas Air
claims it owns 1,000 airplanes, but in reality, doesn’t. experience for our members is knowing that a dedicated represen-
tative is there and available to provide that high level of personal-
What’s the cost of purchasing a jet card? ized service to them. That’s a layer to the Nicholas Air culture of
The lowest price point is listed as $4,298 an hour. hospitality that technology cannot replace.
Your core fleet comprises a mix of jets and turboprops; I was You currently serve more than 9,000 airports throughout
under the impression that air travelers, given a choice, would the Americas and the Caribbean. Do you have any near-term
prefer to travel on a jet. What’s the rationale for turboprops in plans to expand your network?
your fleet planning? Nicholas Air is family-owned and operated, not private equity
We own and operate five PC-12s. In addition, we have a fleet or funded by investors; no one dictates how we should or must
of CJ3s, Phenom 300s and Phenom 100 jets, and the Citation run our business model, except for our members. We invest in
Latitudes, which enable our members to fly coast-to-coast our members, so where we fly and the aircraft we purchase all
nonstop. The Pilatus is a great offering, with seating for up to depends on what they have to say and need. Nicholas Air is not
eight people. Furthermore, we are the only company to offer your run-of-the-mill private-aviation services provider; we listen
a PC-12 in a jet card format, which appeals to cost-conscious and respond to our members’ wishes.
individuals and corporate members.
Business Aviation 2
Verticals TECHNOLOGY
vit aggregates Monkowski’s

location data with that of
other nearby users to pre-
dict the most efficient pub-
lic-transit trip between two
locations. “Transit users
have an even bigger prob-
lem than drivers,” says Nir
Erez, a 52-year-old Israe-
li serial entrepreneur who
cofounded Moovit in 2012.
Most commuters don’t know
when a bus might arrive—
let alone how it might con-
nect with another transit
service—or when walking
or bicycling might be faster,
Erez says, speaking from his
home in Tel Aviv: “Informa-
tion is usually bad.”
So bad that Moovit has
become the world’s most
downloaded transit app. In
just five years it has racked
up 100 million users—
roughly the same num-
ber as Waze, which Google
S M ART TR ANS P OR TATI O N
bought for $1.1 billion in
Big Data for Big Cities

2013. Moovit is available in
44 languages and 78 coun-
tries, and commuters in
Moovit has created the Waze of public transit. 1,500 cities, from Lexington,
Is this the app that can beat urban congestion? Kentucky, to London, Mos-
cow and Hanoi, rely on it to
BY ALAN OHNSMAN get to and from work. In Los
Angeles, 40% of its users ac-
L
ike most suburbanites, Janice Monkow- cess it in Spanish. In 2016 Moovit became the of-
ski, a piano teacher who lives in Danville, ficial transit app for the Summer Olympics in Rio
California, some 30 miles east of San de Janeiro, beating out Apple and Google, accord-
Francisco, gets around mainly by car. For ing to the company. When public transit doesn’t
much of her life, public transit was not even an af- get a user all the way to her destination, Moov-
terthought. it may connect her to bike-share programs or ser-
That changed recently when Monkowski, a vices like Uber.
self-described technophobe, discovered Moovit. Moovit’s popularity has helped it attract a
When she goes to San Francisco to meet friends string of marquee investors. The company, which
or catch the symphony with her husband, the launched with $500,000 from Erez, has raised
smartphone app lets her plan bus and train trips nearly $84 million from the likes of Sequoia Cap-
down to the minute. “Moovit tells me where to ital, Ashton Kutcher’s Sound Ventures and BMW
walk and how long it might take to catch a bus to i Ventures. Its valuation reached $450 million, ac-
get to the train station,” Monkowski says. “It had cording to PitchBook. The investors have been
probably been 10 or 15 years since I’d ridden a lured by the potential to monetize Moovit’s real-
RONEN GOLDMAN FOR FORBES
transit bus.” time transit information, which includes more

Nir Erez (left) and Roy Bick
founded Moovit to help In exchange for the free service, Monkowski than 500 million data points generated daily.
bus and train commuters, lets Moovit track her trips. Much like the navi- Now Moovit must prove it can convert that
encourage residents to
ditch their cars and make gation app Waze, which follows its users on the data into cash. The company says it is just now
cities more livable. road to determine optimal driving routes, Moo- turning to monetization and won’t disclose reve-

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Verticals TECHNOLOGY
nue, which remains negligible, according to Forbes site he’d made for the local transit authority with
estimates. But Erez and his investors say that it a young computer scientist named Roy Bick. FOLLOW-
won’t be hard to ramp up sales, and they believe An avowed transit nerd, Bick had taken it THROUGH
the company is in the right place at the right time. upon himself to help local commuters. Tel Aviv
Cities everywhere are battling congestion and pol- had recently reconfigured its bus system to ac-
lution. This has fueled a frenzy around the con- commodate a new rail line, changing routes and
cept of “smart cities,” a somewhat amorphous idea stops to feed more riders onto trains. Public in-
that data from all forms of sensors, along with ar- formation about new locations was poor. So Bick
tificial intelligence and cloud-connected technolo- walked the city to log stops into a database he
gies, will help manage increasingly complex urban had built. He also tapped into transit-bus GPS
systems. Moovit’s plan is to feed cities’ appetite for information to turn his database into a real-time
transit data. “Urban mobility is a global concern,” route-planning website.
says Sequoia partner Gili Raanan, adding that Bick’s work clearly had the potential to be use-
Moovit’s transit data could “dramatically improve ful well beyond Tel Aviv. And Erez, who had con-
the quality of life of our cities.” sidered investing in Waze—also founded in Is-
Buenos Aires and Madrid have signed up to be rael—understood that crowdsourced location WHITMAN’S
early customers of Moovit’s Smart Transit Suite, a data flowing from users’ smartphones could pro- WAR
data portal with precise, real-time information on vide the basis for creating comprehensive transit-
When billionaire Meg
bus and train locations and usage, passenger wait trip planners everywhere. Erez, Bick and Evron Whitman, the former
founded Moovit the follow- eBay chief and onetime
ing year, with Erez becom- California gubernatorial
HOW TO PLAY IT BY JON D. MARKMAN candidate, joined
ing CEO and Bick oversee- Hewlett-Packard as CEO
Moovit represents a key, consumer-focused step in the ing operations. Evron never in late 2011, she walked
digital transformation of cities. But at the next level of took a formal role. “I had into a tough spot: Its
abstraction, governments need to provide underlying tech- a nice seven-month retire- stock had cratered 42%
nology that allows buses, trains, taxis and cars to achieve in the year prior. As
ment, and then it was back Forbes observed on our
total awareness of each other and the terrain. Into this
to work in another startup,” June 10, 2013, cover,
breach comes tech-services firms like PTC, which develops
Erez says. Whitman was going to
software overlays that help make the connections seamless. Municipali- war—and she expected
ties and companies use its ThingWorx platform to quickly build, analyze As Moovit has grown to it would take five years
and manage transportation networks. Vodafone is using PTC’s Smart City 100 employees, with head- to secure the venerable
solutions to help reduce traffic congestion already. Soon the firm will also quarters near Tel Aviv and Silicon Valley pioneer.
provide smart lighting, parking and air-monitoring services. The $7.2 bil- offices in cities such as San She went in, guns
lion Boston company logged $144 million in bookings in the latest quarter. blazing—most notably,
Francisco, Athens and Rio, in 2015, splitting the
PTC shares are up 40% this year and 225% over the past five years.
Erez and Bick are con- company and remaining
Jon D. Markman is president of Markman Capital Insight. vinced they can help cities in charge of Hewlett-
Packard Enterprise,
be more efficient in myriad
its services unit. Last
ways. If demand surges on month she announced
times, optimal routes and more. “They have very a specific route, for example, Moovit could sug- she will step down in
granular data as to how people move around cit- gest deploying more buses to serve it. “We look February; HPE’s stock is
up 30% since it began
ies,” said Andreas Mai, an executive vice presi- at the demand and the actual movement infor- trading in the wake of
dent for Keolis, a French transportation-manage- mation, then look at the system infrastructure, the company’s split. HPE
ment company that works with transit services all the routes and the timetables to understand president Antonio Neri
around the world. Keolis has invested in Moovit whether it’s optimized or not,” says Bick, 37. Cit- will then take control.
Whitman has ruled
and will incorporate its data in pilot programs in ies spend millions of dollars to survey residents out another political
certain cities that Mai wouldn’t identify. about their use of public transit, and Moovit can run, and though briefly
Moovit began taking shape in 2011, when provide better, more up-to-date information at reported to be up for
Uber’s top job, she says
Erez had just left a startup he’d cofounded and a lower cost, he adds. Best of all: It’s all built one she’ll take another CEO
was training for a marathon. He had planned data point at a time by people like Monkows- spot only if it’s a perfect
on a leisurely semiretirement of investing a bit ki. “When I go to San Francisco, I don’t want to fit. Her new battle plans,
in early-stage startups and competing in triath- drive,” she says, noting the city’s “terrible” park- in other words, are
pending.
FOLLOW-THROUGH BY MADELINE BERG
lons. But on long training runs around Tel Aviv, ing and traffic. Moovit has given her another op-
his friend Yaron Evron kept talking about a web- tion: “It’s very simple.”
FINAL THOUGHT
“Cities have the capability of providing something for everybody, only because,
and only when, they are created by everybody.” —JANE JACOBS

Active Matters
in taking care
of the ones who
matter most.
Life isn’t a passive activity. Investing shouldn’t be either.
Whether it’s navigating your career, raising kids, or planning for retirement,
being actively involved matters in achieving better results.
When it comes to managing our funds, we share the same active philosophy.
Our investment teams navigate down markets and help manage risk so you
can stay on track in reaching your goals.
Over 80% of T. Rowe Price mutual funds beat their 10-year Lipper average as of 9/30/17.*
Put our active investment approach to work for you today.
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Request a prospectus or summary prospectus; each includes investment objectives, risks, fees, expenses, and
other information that you should read and consider carefully before investing.
*158 of our 332 mutual funds had a 10-year track record as of 9/30/17 (includes all share classes and excludes funds used in insurance products).
133 of these 158 funds (84%) beat their Lipper averages for the 10-year period. 214 of 319 (67%), 186 of 230 (81%), and 155 of 185 (84%) of T. Rowe Price
funds outperformed their Lipper average for the 1-, 3-, and 5-year periods ended 9/30/17, respectively. Calculations are based on cumulative total return.
Not all funds outperformed for all periods. (Source for data: Lipper Inc.)
T. Rowe Price Investment Services, Inc., Distributor.
Verticals STRATEGIES
BlackRock’s reveals BlackRock’s activity on

secret weapon,
chief operating this quiet pre-Thanksgiving day:
officer Robert There are some 25,000 trade or-
Goldstein
ders in the market, 77,000 trades
and thousands of collateral calls. A wider view
colorfully identifies the specific portfolio manag-
ers and traders initiating the moves.
The program is called Aladdin, shortened from
the wonky Asset Liability and Debt and Deriva-
tive Investment Network, and it can expand and
contract like an accordion, from a holistic view
of firm-wide risk down to a single trade in a split
second. It is the reason Goldstein, 45, is a favor-
ite to run BlackRock one day, despite the fact that
he has never placed a trade or made a market call
during his tenure. His ascendance at the financial
giant speaks volumes about the state of asset man-
agement today—a business dominated by the ex-
plosive growth of passive index funds all racing to
the bottom on fees.
“The ability to have a dashboard for running a
firm like BlackRock that’s as simple as the dash-
board in a car is a remarkable feat,” Goldstein
confidently states. “One system, one database, one
set of models. I know the vast majority of people
don’t have this.”
But what’s on the screen in Goldstein’s office is
only a glimpse of what Aladdin can do. Rick Rie-
der, CIO of BlackRock’s $1.7 trillion fixed-income
business, uses it to track and analyze the risks em-
bedded in his thousands of complex holdings. He
loads his $31 billion Strategic Income Opportu-
nities Fund to show how the portfolio will react
to different market environments. A scenario
WA L L STR EET called “Eurozone Breakup” will cost Strategic In-
come 79 basis points of performance relative to
BlackRock’s Edge Rieder’s targets, Aladdin calculates, displaying as-

set-by-asset and risk-by-risk where the impact is
acute. “China Credit Crunch” would be twice as
How do you stay on top when your core business painful. Strategic Income’s biggest potential risk?
is a commodity and you measure profits in “Spring 2013,” a repeat of the taper tantrum, when
hundredths of a percentage point? You build the the Federal Reserve signaled it would unwind its
best risk-management software on Wall Street. stimulus efforts, causing bond yields to surge.
“If I buy an asset, I know exactly what it’s going
BY ANTOINE GARA
to do to the rest of the portfolio,” Rieder says.
When North Korea fired missiles over Japan this
O
n a large flat-screen monitor perched fall, he used Aladdin to check whether he was
in front of a framed orange-and-blue overexposed to the market and saw he would
Warhol print of Teddy Roosevelt as a need to buy about $400 million of Treasuries to
Rough Rider, BlackRock’s chief oper- manage the risk.
ating officer, Rob Goldstein, is looking over the “Aladdin is like oxygen. Without it we wouldn’t
entirety of the financial firm’s $6 trillion in global
JAMEL TOPPIN FOR FORBES
be able to function,” says Anthony Malloy, CEO of

assets—135 teams with positions in hundreds of $238 billion (assets) New York Life Investors, one
markets in 30 countries. He is using software that of hundreds of firms outside of BlackRock paying
he’s been perfecting for the 23 years he has spent fees to use Aladdin. Daniel Pinto, CEO of JPMor-
at the company. A simple gray column on the left gan’s investment bank, adds, “It allows our clients

Verticals STRATEGIES F
to trade across asset classes, conduct sophisticat- BlackRock Solutions. Goldstein was a key leader. TEST DRIVE
ed risk analytics and oversee their portfolios in a Every time BlackRock gobbled up new as-
very integrated data environment.” sets, Aladdin was refined. Monitoring stocks and
It’s no accident that a piece of software may be European markets were added when the firm
the single most important differentiator for Black- bought Merrill Lynch Investment Managers in
Rock. From the firm’s modest beginnings as a 2006. Later it gained expertise in ETFs with
bond manager in 1988, CEO and cofounder Larry BlackRock’s opportunistic purchase of Bar-
Fink put data analysis and risk technology at the clays Global Investors in 2009 for $13.5 bil-
forefront, instead of treating it as second fiddle to lion. Another break came during the financial
portfolio managers and traders. crisis, when understanding exposures to fail-
“The roots of the organization were founded ing firms and assessing potential losses became
on the concept of risk management and technolo- paramount. In 2008 Aladdin was used by the Fed WHERE TO,
gy,” says Fink. In an era of disruption, BlackRock when it took on the assets of Bear Stearns, and HUMAN?
is reporting record operating margins, and its then by the Treasury to rescue the financial sys-
stock is the best performer on Wall Street, return- tem. During the European debt crisis Aladdin General Motors says its
autonomous vehicles
ing on average 23% per year since its IPO in 1999. was hired by the central banks of Ireland, Greece are improving so quickly
Raised in the Canarsie neighborhood of and the ECB. that it plans to launch
Brooklyn, Goldstein graduated from high school Today Aladdin counts some 200 financial a driverless-taxi service
in 2019. San Francisco,
at 16, opting for less expensive SUNY Bingham- firms as clients, with 25,000 users, monitoring
where GM has been
ton over offers from private colleges because some $18 trillion in assets on the platform. It car- testing 180 self-driving
his father had promised him a new car. A nerdy ries out a quarter-million trades daily and billions Chevrolet Bolt electric
Grateful Deadhead, he joined relatively small of forecasts weekly. Roughly a quarter of Black- cars, looks like the first
market; New York will
BlackRock in 1994 at age 20. His small team val- Rock’s 13,000 staff are devoted to technology, with likely follow.
ued mortgages, producing computer-crunched in- close to half focused on Aladdin. BlackRock So- On a slow, cautious ride
lutions is on track to generate $700 through San Francisco’s
million of the firm’s $12 billion in Potrero Hill neighbor-
HOW TO PLAY IT BY WILLIAM BALDWIN hood, Forbes found that
revenues this year, up 15%. our driverless car, “Alex,”
As profits in portfolio management shrivel, Black- Aladdin is pushing into retail, had trouble reading
Rock will rely more heavily on the less commod- where BlackRock believes rigorous the body language of
itized business of risk management. You can follow a guy with a surfboard
quantification of risk and scenar- under each arm trying to
its lead by investing in companies that assess and io forecasts can help financial ad- cross the street. When a
address commercial hazards. Fico calculates the risk
visors and individuals build better construction worker ap-
that a credit card user is a scammer or deadbeat. peared from between two
Moody’s determines the probability that Chicago will default on financial plans. BlackRock has al-
trucks, Alex swerved and
its bonds. Verisk Analytics can put odds on all sorts of misfortune, ready made numerous bolt-on in- slammed on the brakes—
from terrorism to roof cave-ins. Exponent is a science-heavy com- vestments: FutureAdvisor, Scalable a reaction indicative of its
pany that does “failure analysis”: figuring out, before it happens, Capital, iRetire and iCapital. Five programmed abundance
how a structure or machine might rust, bust, corrode or explode. of caution.
wealth-management firms, includ- GM is bullish on au-
William Baldwin is the Investment Strategies columnist for Forbes. ing UBS, are now using Aladdin. tonomous ride-sharing.
If the FAs like the technology, they At $2.50 a mile in San
may also buy BlackRock products. Francisco, for example,
services like Uber and
ternal risk reports, called “green packages” for the Besides being career changing, Goldstein’s Lyft are unprofitable
paper they were printed on. He hoped his back- software is a big reason why analysts and hedge because most of the
office job would be a springboard to a more glam- funds like Dan Loeb’s Third Point gush over money goes to drivers.
Remove them and the
orous and lucrative post as a bond salesman. BlackRock.
cost per mile falls below
Instead he became more entrenched in the “We see BlackRock as far more than an asset $1, which GM predicts will
unit as BlackRock turned its risk technology out- manager dependent on market movements,” says cause demand to soar. Its
ward, using it to help General Electric liquidate a Third Point investor letter. Some, like Mac- plan is to scale quickly by
mass-producing driver-
the mortgage portfolio of Kidder Peabody. Then rae Sykes, an analyst with Gabelli & Co., are even less taxis at a factory
in 1998 a 25-year-old Goldstein led BlackRock’s comparing the behemoth asset manager to Am- near Detroit. The ques-
effort to license its analytic firepower to Freddie azon. “Am-Rock reminds me of the qualities of tion: Are perambulating
Mac, which used it to value over $500 billion in Amazon,” Sykes says, “driving efficiencies for cli- surfers—and the rest of
the world—ready?
mortgages. By 2000, demand was so great a busi- ents, generating strong growth and pursuing a re-
TEST DRIVE BY JOANN MULLER
ness unit was formed around the software called lentless approach to competitive positioning.”
FINAL THOUGHT
“Like all magnificent things, it’s very simple.” —NATALIE BABBITT

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COMPETITION
IS THE
NEW UNION
American corporations have spent decades slashing jobs,
cutting benefits and putting shareholders before employees.
But guess what: The Just 100 companies that pay and treat their
workers well outperform those that don’t. With unemployment
near 4%, the pendulum is swinging back to the workers. This
time, it should pay off for investors, too.
BY MAGGIE MCGRATH, WITH LAUREN GENSLER AND SAMANTHA SHARF
A
lmost two years ago, Intel CEO Brian Krzanich made the kind of headlines no compa-
ny wants: In the process of restructuring the storied chipmaker, he was eliminating 11%
of its workforce—12,000 jobs. But far more quietly, Krzanich was focusing on something
seemingly contradictory: cranking up a program to prevent the workers the company
wanted to keep from walking out the door.
The retention initiative was launched as part of a diversity push. In 2015, Krzanich had pledged
some $60 million a year to boost underrepresented groups at Intel, yet in that year the company tread-
ed water: 584 African-Americans, Hispanics and Native Americans were hired, and 580 from those
groups departed. Ed Zabasajja, a Ugandan-born, Auburn University-trained engineer who oversees in-
ternal diversity analytics, was keen to acquire data to figure out why employees left—before they did.
Thus was born WarmLine, whose touchy-feely name hasn’t prevented more than 10,000 workers
from reaching out. More than just a data-collection operation, WarmLine quickly developed into a way
to address problems such as finding colleagues for isolated workers to bond with, mediating manage-
ment disputes, arranging transfers and even asking for raises. And it also became an outlet for the en-
tire company—roughly half of WarmLine’s users have been white and Asian men.
“There’s a limited number of people who can do many of these technologies,” Krzanich says. His
product, ultimately, relies on talent.

Zillow, the online real estate marketplace, has gone even further to keep its key employees. CEO
Spencer Rascoff sees recruitment and retention as the company’s leading priority and has a new “in-
ternal mobility” team focused on top performers. After one star recently decided during a six-week

After worker
feedback, Zillow’s
Spencer Rascoff
CREDIT TK
CREDIT TK
has increased
sabbaticals and
bereavement leave.

paid sabbatical (yep, Zillow grants one every six years) that new benefits (think paid family leave, sabbaticals and stu-
he needed to leave and pursue a big change, Zillow kept in dent-loan repayments) and programs designed to fulfill
touch. Within two months, the defector was back in a new Millennial demands for work-life balance, inclusive work-
role. “It’s much more economical to just keep people mo- places and professional growth. Competition is the new
tivated and engaged over a long period of time rather than union. “Transparency combined with a tight labor mar-
churning and burning people,’’ Rascoff says. ket is effectively working as an advocate for employee bet-
Conventional wisdom holds that employees have less terment,” says Andrew Chamberlain, the chief economist at
power than they’ve had in decades, with a growing share of Glassdoor.
jobs vulnerable to automation or offshoring and just 6.4% No, we’re not trying to sugarcoat reality. The new bene-
of U.S. private-sector workers in unions. Exhibit A is the re- fits are far more likely to be lavished on in-demand, highly
covery from the Great Recession: As corporate profits set skilled workers, and there are still too many terrible jobs and
new records, median wages barely budged until last year. employers in America. But there’s an aspect to this phenom-
That anxiety is reflected in the Just 100, the first-ever rank- enon that might surprise some less enlightened CEOs and
ing of companies based on what Americans expect of a investors: Treating workers right ultimately benefits share-
good corporate citizen. Some 80% of the 72,000 Americans holders after all, and not only in tight labor markets. The
companies of the Just 100 have re-
BRIAN KRZANICH WEARS A WOOL, CASHMERE AND SILK SPORT JACKET ($5,200), WOOL TROUSERS WITH CROCODILE TRIM ($1,300), COTTON SHIRT ($850), AND CROCODILE BELT ($2,800) BY STEFANO RICCI.
turned three percentage points a
year more than the S&P 500 over
the last five years. (For a full expla-
nation of the Just 100’s methodolo-
gy, see page 64.)
So does great performance
allow companies to treat workers
better, or does worker treatment
drive great performance? While
there’s some measure of both at
work, the latter seems to be the
main dynamic. In 2012, Alex Ed-
mans, a finance professor at Penn’s
Wharton School who is now at the
London Business School, analyzed
27 years of stock market returns for
U.S. companies chosen as top plac-
es to work. They outperformed the
market by 2.3 to 3.8 points per year
for the entire stretch, no matter
Intel CEO Brian Krzanich: the broader economic conditions.
“I’ve never been asked
[by analysts], ‘How do you More recently, he studied the rela-
treat employees?’” tionship between employee satis-
faction and stock returns across 14
surveyed over the past three years by Just Capital say com- countries. In rigid labor markets, such as Germany’s, where
panies aren’t sharing enough of their success with employ- regulations or union contracts provide a floor of benefits
ees. Asked to cite what a company’s top priority should be, and limit management flexibility, spending extra on work-
33% said workers or jobs, compared with just 6% who said ers provides little in the way of return. But in flexible labor
shareholders or management. markets, such as in the U.S. and the U.K., treating workers
But a free labor market can cut both ways. With unem- better consistently produced higher returns.
ployment now scraping 4%, and traditional rewards of The Just 100 get that, even if Wall Street doesn’t. Stock
long tenure (pensions and protection from layoffs) just a analysts “look at things like layoffs and they look at the cost.
memory, employees have little reason to be loyal. The “quit They don’t think about the employees’ long-term morale,”
ETHAN PINES FOR FORBES
rate” for 2017 is on track to be the highest in over a decade, says Krzanich, of Intel, which claimed the No. 1 spot this
with 26% of workers voluntarily waving goodbye. So com- year on the Just 100. “I’ve never been asked, ‘How do you
panies that fare well on the Just 100 list are attempting to treat employees?’ ” Mark Costa, the CEO of Eastman Chem-
rebuild workers’ loyalty, 21st-century-style: not with no- ical, which ranks seventh on our list in terms of employ-
layoff guarantees but with fair pay, bonuses, stock options, ee treatment, concurs: “Investors just want more dollars. I

don’t think they spend a lot of time thinking about the con- Take Delta, which ranks 60th on the list. After coming out
sequences to the worker.” Ironically, if they did, more dollars of bankruptcy in 2007, the airline started giving a portion,
would often follow. now at least 10%, of its annual profits back to its workers.
“We made a commitment to people that when things turned
THE IDEA OF TREATING WORKERS well isn’t new—just errat- around and got better, they would see the first rewards from
ic. In 1875, American Express became the first private em- those initiatives,” says Delta CEO Ed Bastian. Plus, it gave
ployer to provide a retirement plan. By the early 1900s, when every worker—including customer-service agents, who have
employee turnover often exceeded 100% a year, visionary to explain flight delays to cranky passengers—skin in the
businessmen were experimenting with new ways to attract game. In the past five years, Delta has returned nearly $5 bil-
and keep workers. Henry Ford introduced $5-a-day pay; lion to employees—and 170% to its shareholders over the
Milton Hershey and George Pullman built towns and hous- past decade, double the S&P 500. Not coincidentally, it’s also
ing for their workers; a company called Norton Grinding pi- the least unionized workforce of any legacy airline.
oneered paid vacations. The Great De-
pression halted, at least temporarily, this
brand of welfare-minded capitalism.
But then the government and unions
stepped in. The National Labor Relations
Act of 1935 guaranteed workers the right
to organize and strike, and labor-union
growth continued for the next three dec-
ades. Private pensions continued to grow
during this time too—thanks in large
part to the new labor unions. The unions’
decline began in the 1960s, when the Su-
preme Court issued a string of pro-em-
ployer rulings, holding, for example,
that companies weren’t obligated to bar-
gain over decisions “at the core of entre-
preneurial control.” Reforms to the Na- The original example of welfare capitalism,
Hershey and its CEO, Michele Buck, are
tional Labor Relations Board under the upping their game to compete for talent.
Nixon Administration and anti-union
Supreme Court decisions and executive
actions during the Reagan years further
weakened the union movement. In 1983,
16.8% of all private-sector workers were
in a union, two and a half times the rate
of today.
Wall Street also played a role during this period. The Rea- IF YOU WANT TO SEE HOW to treat a worker in 2018, start at
gan era coincided with the Milken era, when leveraged buy- the top. That would be Nvidia, the No. 1 Just 100 company
outs were built around finding efficiencies, even if that meant in worker treatment. It competes with Apple, Google, Face-
treating company assets like Tinker Toys and workers as book and the rest of Silicon Valley’s giants for the best minds
costs rather than assets. Barbarians at the Gate was a bestsell- in technology. That means it pays well. But fair and compet-
er, the Predators’ Ball was the marquee event and the icon- itive pay—the largest single driver of the Just 100—is taken
ic 1987 movie Wall Street depicted workers as pawns of Ar- almost as a given at top companies. Those motivated only
mani-clad paper pushers. At the same time, companies began by salary tend not to stay, no matter what. So to get stars,
shifting from “defined benefit” retirement plans—a lifetime Nvidia treats them as stars, with universal employee perks
pension, with benefits backloaded to reward longer-tenured that no union negotiaton has ever extracted. New mothers
workers—to cheaper “defined contribution” plans. While this get 22 weeks of fully paid leave. Workers get $6,000 of their
brought some sanity to corporate balance sheets, it also liber- students loans paid off every year, up to $30,000. Recently,
ated workers to walk out the door with their retirement stash Nvidia started offering to pay for in vitro fertilization, adop-
and roll it into an IRA or a new employer’s plan. tion and, soon, egg freezing.
Those at the top of the Just 100 list figured out years ago As a result, Nvidia says, its quit rate sits at 5%, roughly
that if every worker is now a free agent, a competitive advan- half that of its peers. It was the best-performing stock in the
tage lies in bringing in and retaining the top talent. S&P 500 in 2016, giving its investors a 224% return. In 2017,

THE JUST 100
through early December, it was up another 75%—four times For our first-ever ranking of America’s top corporate citizens,
the S&P’s gains. Just Capital surveyed 72,000 Americans to measure what they
Another key employee perk: training. Accenture, No. 6 on expect from businesses. Then we ranked 877 of the largest public
the Just 100, announced a $1.4 billion, four-year push to bol- companies against those expectations, using seven weighted
ster current employees as the consultancy shifts to cloud and metrics, such as worker treatment and environmental impact.
security services. In this labor market, and with technolo-
ENVIRONMENT
MANAGEMENT
COMMUNITIES
gy changing so fast, simply hiring new experts with cutting-
CUSTOMERS
PRODUCTS
WORKERS
edge skills isn’t a viable approach for employers. And continu-
JOBS
al growth engages the kinds of employees worth keeping and
promoting.
Companies looking to attract and keep younger work-
ers, meanwhile (read: everyone), understand that Millenni- 1 Intel 10 1 12 530 247 2 204
als are looking for a better work-life balance than their par- 2 Texas Instruments 14 5 1 98 127 6 664
ents had. At Zillow (No. 51), the 42-year-old Rascoff leads by 3 Nvidia 1 10 93 530 122 18 202
example: When he’s not traveling, he aims to get home by 5:30 4 Microsoft 2 2 782 509 1 10 110
and turns off his phone until 8:30 to spend time with his three 5 IBM 62 29 36 70 337 4 49
kids, ages 6, 9 and 12. 6 Accenture 15 65 97 28 331 1 208
Note that this explosion of 7 Cisco Systems 11 22 1 367 114 104 269
family benefits has gone be- 8 Alphabet 8 112 57 39 609 80 61
WO R K E R T R E AT M E N T
yond the young tech com- 9 Salesforce 4 109 36 9 624 179 284
panies. In 2016, Johnson & 1. Nvidia
10 Symantec 27 44 36 514 252 36 708
Johnson (No. 35) increased fer- “If you’re going to do your
life’s best work here, the 11 Adobe Systems 5 72 773 70 681 13 245
tility benefits from $25,000 to
company has an obligation to 12 AT&T 106 224 1 684 270 49 34
$35,000 and began reimburs- provide the best benefits,” says
13 Rockwell Automation 152 36 97 98 172 7 523
ing workers up to $20,000 for Beau Davidson, VP of human
resources. Details: Nvidia will 14 Nike 44 63 36 502 642 96 103
payments to surrogate mothers.
repay up to $30,000 of student 15 Procter & Gamble 9 256 97 648 137 50 172
“We’re also competing for tal- loans, and new moms get 22 16 Colgate-Palmolive 18 78 58 648 101 88 478
ent as we bring in people from weeks of paid leave; employees
tech and other industries,” says also get reimbursement for in 17 Humana 41 91 145 665 33 42 89
Peter Fasolo, J&J’s chief human vitro fertilization and adoption 18 Applied Materials 225 92 1 98 120 34 737
expenses. Even better: Workers 19 PepsiCo 135 15 362 94 11 84 73
resources officer. can commit up to 10% of their
Yet another new trend em- salary to purchasing Nvidia’s 20 NetApp 87 190 1 98 190 70 738
braced by the old, established red-hot stock at a 15% discount. 21 Fluor 58 32 97 530 17 114 335
members of the Just 100: flex- 22 Jones Lang LaSalle 51 132 13 367 48 200 247
ible benefits. At Procter & 23 Micron Technology 75 52 13 367 467 137 660
Gamble (No. 15), with 95,000 CO M M U N I T I E S 24 Edwards Lifesciences 115 62 97 98 26 54 469
workers worldwide, every 1. Intel 25 PVH Corp 296 20 36 367 535 21 414
employee gets the equiva- To encourage its 106,000 26 VMware 6 279 226 9 770 129 163
lent of 1% to 2% of their sal- global employees to volun- 27 CBRE Group 85 110 13 367 379 126 206
ary set aside for a benefit of teer, the chipmaker donates $10
28 Eli Lilly 30 69 91 688 519 60 356
for every hour (after 20 hours)
their choice, anything from spent at a nonprofit, including 29 Biogen 50 115 97 367 155 82 563
disability insurance to finan- schools. Last year, 38% of em- 30 Teradata 100 58 145 1 86 196 790
cial planning to extra vaca- ployees contributed more than
31 Praxair 140 75 1 367 171 283 583
tion time. Similarly, last year one million hours of time. Intel
has also connected over 1,000 re- 32 Bristol-Myers Squibb 34 34 359 688 367 43 391
123-year-old Hershey (No. 50) tiring employees with nonprofits 33 Eastman Chemical 7 51 97 530 161 782 650
introduced a suite of “Smart- like Habitat for Humanity and the
34 Apple 67 61 767 859 19 17 63
Flex” policies for its white-col- Boys & Girls Clubs of America for
a meaningful second act. 35 Johnson & Johnson 26 49 219 858 421 23 211
lar workforce. Those include
36 Clorox 55 80 141 36 70 212 551
a number of leave options for
37 Square 25 706 369 41 614 514 2
new parents (they can take their time in one chunk or inter-
38 Caterpillar 222 82 32 530 276 24 434
mittently, as needed) and expanded opportunities to work
39 Akamai Technologies 33 255 145 9 414 190 132
from home or work flexible hours. And this attitude tran-
scends what can be standardized or put into an employee 40 Arconic 195 123 1 98 32 262 338
manual. After Hurricane Maria hit Puerto Rico in Septem- 41 Garmin 143 129 1 367 851 79 304
INDUSTRY LEADER

ENVIRONMENT
MANAGEMENT
COMMUNITIES
CUSTOMERS
PRODUCTS
WORKERS
JOBS
ber, Hershey spent $9,000 just to bring a new hire from there
to New York and get her set up in an apartment.
How much has the world changed? Private equity firm
42 Analog Devices 130 161 13 98 373 87 754 KKR, Wall Street’s original “barbarians,” is adding good-
43 State Street 360 27 13 530 716 35 331 ies for the rank and file to its buyout formula. Since 2011,
44 Celgene 112 142 13 530 508 98 228 KKR has distributed more than $200 million in equity grants
45 Cummins 120 167 139 367 312 20 333 across four industrial
46 Chevron 28 37 145 367 132 764 488 deals to 10,000 blue-col-
PRODUCTS lar workers. “Companies
47 Kimberly-Clark 12 163 125 688 81 136 548
48 Workday 42 231 58 6 795 222 374 1. Texas Instruments can achieve incredible re-
49 Freeport-McMoRan 47 9 369 98 594 257 581 Calculators. Televisions. sults when all employees
Electric toothbrushes. Re- are given the opportuni-
50 Hershey 38 101 94 36 634 638 363
frigerators. This pioneering semi-
51 Zillow Group 13 710 369 9 762 496 32 conductor company, founded in
ty to think, act and partici-
52 3M 98 25 204 688 97 93 264 1930, is developing smart technol- pate as owners in the busi-
ogy to allow consumers to charge ness,” says Pete Stavros,
53 Agilent Technologies 72 120 369 98 658 15 614
their devices faster, power their
the leader of KKR’s indus-
54 Xerox 725 24 36 62 529 8 375 homes for less and receive assis-
tance while driving. To fuel inno- trials group. When KKR
55 Amazon 192 263 366 648 772 405 1
vation, the Dallas company plows took industrial equip-
56 Merck 65 7 225 799 228 111 565
10% of revenue into research ment maker Gardner Den-
57 Autodesk 24 282 226 1 810 151 393 and development. Patent count:
44,000.
ver public in May, it gave
58 Juniper Networks 88 48 58 530 224 185 724
6,000 employees $100 mil-
59 KLA-Tencor 280 122 13 98 210 69 771
lion of stock grants—equal
60 Delta Air Lines 60 30 768 639 24 293 105
to 40% of a year’s pay for
61 General Mills 40 18 779 642 116 119 712
each. The company’s stock
JOBS
62 Leidos Holdings 196 286 226 1 240 25 588 has urged 50% since the
63 Keysight Technologies 175 100 145 98 291 27 644 1. Amazon IPO, so each worker now
64 Verizon 118 261 1 840 235 149 60 There’s a reason cities and
holds stock worth 60% of
towns across America are
65 Goldman Sachs 17 289 202 688 845 11 376 his or her salary.
clamoring for Amazon’s second
66 United Parcel Service 573 126 127 68 406 66 26 headquarters: jobs. The e-com-
67 Motorola Solutions 155 876 1 367 475 12 833 merce juggernaut increased its IF COMPETITION now de-
U.S. head count sixfold to 180,000
68 Rockwell Collins 66 124 369 98 327 73 459
between 2011 and 2016. It has
livers what unions once
69 Illinois Tool Works 320 79 97 98 139 61 380 pledged to hire another 100,000 did, it has also replaced
70 General Motors 22 6 867 799 565 14 67 full-time workers by mid-2018. government policy, or
Many of its jobs are at fulfillment filled in where it’s lack-
71 Facebook 3 287 58 874 719 346 17
centers (where workers sometimes
72 CA Inc. 73 589 13 28 660 145 842 coexist alongside robots), but the ing. The federal mini-
73 Legg Mason 169 172 13 367 306 174 584 company is also adding positions mum wage hasn’t been in-
in technology, logistics and cus- creased since 2009, and at
74 Coca-Cola 108 81 35 529 66 770 220
tomer service.
75 Hasbro 83 11 97 367 297 792 847
its current $7.25 an hour,
76 ResMed 125 188 226 367 144 46 515
it offers a path to pover-
ty, with few avenues for
77 F5 Networks 31 215 369 98 170 124 761 ENVIRONMENT
advancement—a combi-
78 Oracle 420 162 36 32 605 81 168 1. Accenture nation that explains why
79 Qualcomm 77 4 202 799 742 194 299 The consulting company is so many retail companies
80 Citrix Systems 188 170 58 1 717 326 370 a powerful, invisible force in
eco-friendly business practices,
perform atrociously in the
81 Xylem 430 64 36 721 14 19 676
pushing clients, partners and sup- Just 100 rankings. That’s
82 Southwest Airlines 53 458 58 507 54 620 144 pliers to leverage tech to improve what made Target’s an-
83 Prudential Financial 168 148 13 625 383 170 381 sustainability. It doesn’t just talk
nouncement in Septem-
84 Estée Lauder 303 185 201 367 675 3 427 the talk: Accenture has reduced its
own carbon footprint 47% since ber interesting: The retail-
85 VF Corp. 310 8 226 78 285 337 158
2006 by making its offices more er said it was immediately
86 Intuit 29 103 786 490 492 108 496 energy-efficient and reining in air boosting its starting pay
87 Ecolab 440 17 97 98 300 132 326 travel in favor of virtual meetings.
In fiscal 2016, it recycled 99% of
for all workers, includ-
88 Campbell Soup 357 23 368 78 15 131 438
its old computers (some 76,000), ing seasonal ones, to $11
89 Advanced Micro Devices 107 89 369 367 801 26 757 keeping them out of landfills. an hour, and aiming to hit
90 Western Digital 380 128 13 98 360 127 417 $15—the number favored

PURE MOMENTUM
With help from technology accelerators around the state that provide support to start-ups and entrepreneurs,
54 companies received more than $222 million from Michigan venture capital firms in 2016. And since Michigan
has the highest research spending-to-venture capital investment ratio in the country, PlanetM is the ideal place
to pursue ideas in mobility. To learn more, go to michiganbusiness.org/planetm
ENVIRONMENT
MANAGEMENT
COMMUNITIES
CUSTOMERS
PRODUCTS
WORKERS
JOBS
by “living wage” activists—by 2020. The announcement blath-
ered on about paying workers fairly. A better reason: No one
really needs to shop in a store right now. To avoid a race to
91 First Solar 264 198 145 367 711 9 750
the bottom, Target is making a bet, one pioneered by Costco,
92 Baxter International 113 46 797 688 145 22 266
that its long-term fate is better aligned with superior consum-
93 Nielsen Holdings 230 14 369 367 696 95 505
er experience and a brand that people feel good about, rath-
94 Hewlett-Packard 679 12 58 367 249 76 271
er than just lower prices or bigger dividends. “People expect it
95 National Instruments 96 168 58 98 341 402 658
now,’’ says Hershey CEO Michele Buck. Consumers, especial-
96 Molson Coors Brewing 86 77 145 686 737 58 785 ly younger ones, “want to know, ‘I’m buying a product from
97 Ingersoll-Rand 180 207 223 98 384 56 395 someone who cares about sourcing and who cares about the
98 Air Products & Chemicals 94 35 13 98 295 830 793 people who were involved
99 Ultimate Software Group 49 447 226 41 802 480 52 in the product along the
100 AbbVie 174 87 34 688 110 226 613 M A N AG E M E N T & S H A R E H O L D E R S chain of production.’ ”
1. Microsoft Of course, treating
Forbes has partnered with Just Capital to rigorously evaluate 877 of the largest publicly
traded companies in the U.S. (the Russell 1000 minus companies for which complete data Since Satya Nadella took over workers well sounds bet-
aren’t available, like REITs, and businesses that have merged, like Whole Foods). Data are in 2014, Microsoft’s stock ter as a profit strategy near
pulled from publicly available sources, third-party vendors and crowdsourced repositories
and then scoured by a team of statisticians and data scientists. The ranking is then weighted
has awakened from a decade-long
slumber, more than doubling. The
full employment. What
based on what Americans say are the seven most important aspects of business behavior:
worker treatment (23% weighting), customer treatment (19% ), quality of products (17%), en- company is innovating again, with happens during the next
vironmental impact (13%), community support in the U.S. and human rights elsewhere (11%),
the number of jobs available in the U.S. (10%) and shareholder treatment (6%). its cloud business going gang- downturn? Many compa-
busters and a promising $26.2 bil-
nies will surely revert to
lion acquisition of LinkedIn. “We
used to talk about know-it-alls at their old habits—and pay
THE BOTTOM OF THE BARREL Microsoft. Now we talk about learn-

it-alls,” says Kristen Dimlow, corpo-
rate VP of human resources.
the price that comes with
short-term savings. “Peo-
Out of the 877 companies analyzed, these ple will see through that
were the bottom 10%. Here in alphabetical company, and it’s not seen
order are the companies that could stand to as genuine,” says Edmans,
learn a thing or two from the folks at the top. C U S TO M E R S
the finance professor.
1. Teradata “The reason why you in-
Akorn Envision Healthcare Pilgrim’s Pride
Alliant Energy Extended Stay America
When you’re in the data vest in your workers is
Pinnacle Foods
storage and analytics busi-
AMERCO FirstEnergy Polaris Industries because the business you
ness, nothing is more important
American National Floor & Decor Holdings Rite Aid want to build is one in
Insurance than keeping your customers’ in-
Flowers Foods Ross Stores
American Water Works formation secure. So far Terada- which you believe work-
Foot Locker RPC
Aqua America ta, whose customers include eBay
GameStop Sally Beauty Holdings ers should be treated fair-
Athene Holding
and Hertz, has an unblemished
Gaming and Leisure Seaboard Corp. record. Its support lines are open ly, not in response to mar-
Bank of the Ozarks Properties Service Corp. 24/7, 365 days a year, and Terada- ket conditions.”
Bed Bath & Beyond Gardner Denver International
Holdings ta specialists are available on-site As the Just 100 re-
BGC Partners ServiceMaster
Great Plains Energy within two hours. “We still have a
Blue Buffalo Signet Jewelers
startup mentality that every cus-
fl ects, the American pub-
Pet Products Hawaiian Electric Six Flags
Industries tomer is the most important cus- lic seems primed to re-
Brookdale Senior Entertainment
Living Herbalife tomer,” says Imad Birouty, director ward those who act well.
Skechers USA
Bruker Kraft Heinz of product marketing. And the markets will fol-
Spectrum Brands
Brunswick Corp. Lamb Weston Holdings Holdings
low. Eastman Chemi-
Burlington Stores Leggett & Platt Stericycle
Calpine Leucadia National Steris
cal offers a case study from the financial crisis. Rather than
Chemours Co. Liberty Interactive Transocean major layoffs, management took an employee suggestion and
Chipotle Mexican Grill QVC Group UGI Corp. cut wages 5% across the board. “In a difficult recessionary
Consol Energy M&T Bank United States Steel
McDonald’s
environment, everyone was aggressively cutting costs. We
CoreCivic Urban Outfitters
Mercury General took a pay cut, from the board to frontline employees, and
Dick’s Sporting Goods Valmont Industries
Dish Network Michael Kors Vistra Energy
kept investing in innovation,” says CEO Costa. Full salaries
Dollar General Michaels Cos. Weatherford were soon reinstated, and Eastman’s stock roared higher, re-
Dollar Tree Middleby International
turning three times as much as the S&P 500 since the market
Domino’s Pizza Monster Beverage WEC Energy Group
Mylan Wendy’s
bottomed in 2009.
Duke Energy
Nabors Industries Westar Energy “Companies that don’t invest in talent management will
Dunkin’ Brands
Eagle Materials News Corp. Williams-Sonoma be left behind,’’ predicts Zillow’s Rascoff. “This is not just HR
EchoStar NRG Energy WR Grace gobbledygook, this is mission-critical work.” A mission that
Endo International OPKO Health Yum! Brands
defines America’s new labor reality. F

THANKS TO OUR SPONSORS
PRESENTED BY
™
THE
LAST COAL
TYCOON
Dark days ahead for coal? Don’t tell that to
billionaire Chris Cline, who’s convinced the dirtiest
fuel still has a bright future and is building
what he believes will be the last mine standing.
BY C H R I S TO P H E R H E L M A N
T
he masseuse felt the broken bones and the scars and asked Chris
Cline what he did for a living. Cline said he was in the energy busi-
ness. What kind of energy?, she wondered. Maybe solar panels or
windmills? No, not that, he said. You’re not a fracker, are you? No,
not that either. Then what? “I own coal mines,” said Cline. With-
out a word she stopped working on him and left the room. He waited a while,
but she didn’t return. Cline won’t name the resort (“I might want to go back
there”). And the scars? From his years underground in Appalachian mines,
where the coal seams have been worked so thin it’s like “crawling under a table
all day.” Cuts on his back from a mine’s ceiling “felt like insect bites.”
Cline, 59, is one of the most archaic and unpopular specimens of capitalist:
the coal tycoon. He doesn’t mind people not liking him. He knows that coal
fuels 40% of the world’s power needs. “People deserve the cheapest energy they
can get,” he says. “Tell the poor in India and China that they don’t deserve to
have reliable, affordable electricity.”
CREDIT TK
PHOTOGRAPHED BY JAMEL TOPPIN; GROOMING: SUZANA HALLILI USING ZIRH & SISLEY, PARIS

MAJOR MINER:
Chris Cline
stands outside
his newly
opened Donkin
mine on Cape
Breton Island in
Nova Scotia.

CHRIS CLINE
Coal is far from dead. Global demand has dipped because Woods’ ex-wife, Elin Nordegren.
of America’s shale-gas boom and tighter regulations in China, Cline’s gun vault holds more than 50 firearms, including a
yet it remains 50% above its level in 2000, at 7.2 billion tons per Magnum .44 and a Gatling gun. The Bureau of Alcohol, Tobac-
year, according to the International Energy Agency. Even fac- co & Firearms comes out once a month to take inventory. A few
toring in a carbon tax of $30 per ton, coal can compete on price years back, Cline was the subject of an extortion attempt that
with natural gas and renewables. And Chris Cline, relying on threatened his children. “Let ’em come,” he says with a grin.
operating efficiencies that he has honed over nearly 40 years of Today he’s armed with a sheaf of papers. There are archi-
running his own mines, intends to tectural renderings for his island in
Underground roots: Cline’s father in Appalachia.
be the last man standing in the in- the Bahamas and photocopies of old
dustry, supplying low-cost coal pics. A black-and-white shot shows a
from Canada to energy-hungry young Cline outside the little house
consumers around the world. where for fun he’d flatten bottle caps
Cline thinks the carbon cru- under the rails of the coal trains that
sade is folly: “I’m all for getting ran a stone’s throw from the front
sulfur and mercury and nitrogen door. “I’d hitch a ride on a train, hang
oxide out of the air—that’s com- on for a few miles, then grab one
mon sense,” but ultimately, he pos- coming back.”
its, “global cooling” will be a bigger Cline has since upgraded his
threat. “I believe in our children’s transportation. He spends 400 hours
lifetimes that they’ll wish they had a year in the air—most of it on his
paid us per ton to put more CO2 $50 million Embraer Lineage 1000—
in the air.” (It’s easy to forget that,
$200
as recently as the 1970s, fear of a coming ice age was part of
the mainstream climate conversation.) Which is why he has no
qualms about having built his $2 billion fortune with a series
of all-in bets that have taken him from Appalachia to Illinois 180 PIT BOSS
and now to Canada. He created one of America’s biggest public- FROM TEENAGE MINER TO BILLIONAIRE
COAL BARON, CHRIS CLINE’S CAREER HAS
ly traded coal miners, Foresight Energy, and two years ago sold CLIMBED ALONGSIDE THE PRICE OF COAL.
most of his interest for nearly $1.4 billion. He’s since sunk $150 160
million into a new mine in Nova Scotia that may produce 500
million tons of high-dollar metallurgical coal by midcentury.
And he has permits to develop 1.7 billion tons more at the Vista 140
mine in western Canada. 1973
“If you had any idea where I started,” Cline says wistful- Cline starts
working under-
ly. Trim, powerfully built, 5-foot-11, he speaks in a quiet growl 120
ground, aged 15.
from the back of his throat, as if accustomed to keeping his
thoughts to himself. Cline’s father, Paul, was a contract miner
in Beckley, West Virginia; he operated rich men’s mines in ex- 100
change for a cut of what his team pulled up. When Cline was 6,
his dad paid him a penny for each little bag he filled with dirt, 1980
which would be used to pack explosives into coal seams. When 80 Buys out Dad’s
their front porch collapsed, it became clear young Chris had partner for
$50,000.
been excavating dirt from under the house. “It taught me the
1980s/1990s
importance of engineering roof supports,” he says. He first went 60 Builds over 20 mines
to work underground at age 15; the miners would hide him in Appalachia.
when inspectors came. Growing up, did Cline consider himself
poor? “How much more poor can you get?” 40
Cline’s first, battered hard hat sits above the fireplace in his
mansion in Beckley. He created a lake here by damming up
the hollow; it’s big enough for waterskiing and features a 400-
20
foot waterslide. There’s also a go-kart track and a pasture, where
150-pound Italian sheepdogs keep tabs on livestock—including
Fabio, a white stallion that stands at stud in a luxurious stable.
0
Cline has four kids, now grown. His first wife died of cancer;
he’s divorced from his second. For four years he dated Tiger ‘80 ‘84 ‘88
SOURCE: U.S. FEDERAL RESERVE.

shuttling between his homes, making due-diligence tours of er and smarter than anyone else. “I said, ‘Why don’t we buy him
mines in Australia and Colombia, or hauling a Forbes camera out?’ ” And so they did, borrowing every penny. The first two
crew to Nova Scotia, where he has been operating the Donkin weeks he worked 16-hour days and never saw sunlight—what-
mine since April. He applies the same philosophy to his planes ever it took to make his payments. With every success he dou-
as he does to his capital equipment: “We buy the best and run bled down. He lays on the table some pictures of himself from
it hard.” the 1980s—grinning, mustachioed, standing in front of an early
Underground, 1,000-horsepower mining machines rip the mine named after his daughter Candice. His first big success
coal face with rotating claws; roof bolters hammer steel rods came with Pioneer Fuel, a mine he acquired for $1 million and
into the ceiling to hold the rock in place. Cline saw early on how flipped for $17 million.
much more coal he could produce with reliable equipment. Pro- He bought a Lamborghini and a 200-foot yacht called Mine
ductivity and profits correlate strongly with uptime. If a vital Games, but most of the money went back into the Appalachian
machine breaks down and needs parts, Cline thinks nothing ground. He implemented worker-friendly innovations like air-
of sending one of his jets to fetch spares from anywhere on the conditioned cockpits for mining machines. And he began hand-
continent. The math is easy: Every minute his crews are not rip- ing out daily bonuses in the form of dollar coins, based on how
ping coal out of the earth equates to hundreds of dollars in lost many feet of coal a team had mined that day. “A man can go
revenue. And, yes, it’s dangerous. “It used to be brutal,” he says. home and give it to his wife. Or buy some beer,” Cline says. At
“We’re trying to get all the hard work out of it.” year’s end he’d hand out checks to cover taxes due. “Those guys
would run through a wall for him,” says Andy Fox, an indepen-
IN 1980, WHEN Cline was 22, his father had heart bypass sur- dent mining engineer who first met Cline when Cline pulled up
gery, and his partner offered $50,000 to buy him out. “My dad to his office in a red Porsche 928 on the way to the beach and
was going to do it.” But Cline had no doubt he could work hard- unloaded five bags of coal he needed Fox to analyze.
2017
Opens Donkin
2008–2012 mine in Nova
Invests $1.5 Scotia.
billion in 4 Illinois
mine complexes.
Global price of coal, USD per metric ton.
2007 2014
Riverstone Initial public
Holdings invests offering of Fore-
in Foresight. sight Energy LP.
1998/1999
Financing from
Enron.
2002
Acquires
mining rights in
Illinois.
2015
Cline sells most
of his stake for
about $1.4 billion
in cash.
‘92 ‘96 ‘00 ‘04 ‘08 ‘12 ‘16

CHRIS CLINE
Still, it’s not enough to be
innovative. “You need a lit-
tle luck,” Cline says. In the late
1990s he had acquired enough
reserves to build six new
mines. Enron was big in natu-
ral gas and wanted to diversify
into coal, especially coal trad-
ing. Cline got $85 million in
loans and equity from Enron
to build three mines. After En-
ron’s 2001 collapse, he bought
back the interests for $13 mil-
lion, then turned around and
sold a similar stake to ArcLight
Capital Partners for $151 mil-
lion. By 2003 he was out of Ap-
palachian coal altogether.
The coal industry had
watched intently as the EPA
cracked down on emissions of
acid-rain ingredients like sul-
fur dioxide in the early 2000s.
The quickest way for many power companies to comply was to billion. By early 2015 Riverstone had ex- Empty lockers:
Cline hoped to
stop buying high-sulfur coal (e.g., from Illinois) in favor of low- ited, having nearly doubled its money at a create 200 mining
sulfur varieties (like those from Wyoming). Panicked holders of time when many coal giants like Peabody jobs for distressed
Nova Scotia. After
high-sulfur reserves just let their leases lapse and walked away. Energy and Alpha Natural Resources were layoffs, there are
Through a new company, Foresight Energy, Cline started headed toward bankruptcy. Foresight’s rel- now only 81 at the
accumulating 3 billion tons of high-sulfur reserves in Illinois ative soundness made it an attractive tar- Donkin mine.
for less than 30 cents a ton, some of it from the likes of Exxon get for Robert Murray, a 77-year-old coal
Mobil. What did Cline know that they didn’t? He believed in magnate whose privately held Murray Energy paid Cline a little
technology and was encouraged by power-plant innovations less than $1.4 billion cash in 2015 for most of Cline’s Foresight
like scrubber systems that capture toxins before they go up the stake. The two coal barons had been at odds for years in Illinois,
smokestack, enabling them to keep right on burning high-sul- blocking each other via strategic land purchases. Cline stepped
fur coal. Plus, he was used to making money on mines with down from the Foresight board of directors last March, though
seams just 3 feet thick. Those Illinois seams were 6 feet or thick- he still owns 2 billion tons of Illinois reserves, a slug of Foresight
er. “If it gets to where you can vertically stand up, it’s a lot more bonds and around 29% of Foresight shares—which have traded
pleasant.” down 75% since the Murray deal.
PHOTOGRAPHED BY JAMEL TOPPIN; GROOMING: SUZANA HALLILI USING ZIRH & SISLEY, PARIS
“I didn’t see it as a huge risk,” Cline says. He took on private-
equity capital on one condition: no second-guessing. “He didn’t IN 2010, as Foresight was hitting its stride, Cline was hungry
want to be tinkered with,” says Bartow Jones, a partner at River- for something new. He formed a company called Gogebic Tac-
stone Holdings, which invested $600 million between 2007 and onite that tried to get permits for a Wisconsin iron ore mine on
2008. Not only did they acquiesce, Jones says, “we insisted on the shores of Lake Superior. But in 2013 the plan ran afoul of
it.” Cline put $2 billion into four mine complexes, which soon the Bad River Band of the Lake Superior Tribe of Chippewa In-
became the most productive underground operations in the dians, who farm wild rice in the area. Cline canceled the plans,
nation, averaging 13 tons per man-hour at costs of $23 per ton he says, because of low iron prices. “It will be mined someday.”
with output of 20 million tons per year. Canada was more hospitable. On the day of Foresight’s IPO
Cline had created a market for high-sulfur Illinois coal. in 2014, Cline rang the bell on the floor of the New York Stock
“Coal is not a commodity,” Jones says. “You can’t just shove it Exchange, then hopped on his plane and three hours later land-
into a pipeline like natural gas.” Cline swayed power plants to ed in Nova Scotia to go down into a mothballed mine shaft on
his coal by paying for their sulfur-catching upgrades out of his the eastern tip of Cape Breton, in a town called Donkin. He was
own pocket. He acquired docks on the Mississippi and built rail drawn to the huge 12-foot-thick seam and the coal’s high ener-
spurs to load coal from 100-car trains directly onto ships bound gy content, which at 14,000 British thermal units per ton can be
for India and Europe. Cline needed an exit for his investors. In readily turned into high-value coke for steelmaking.
early 2014 Foresight held an IPO and hit a market cap of $2.5 He was also impressed that the highest-risk capital had al-

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CHRIS CLINE
ready been sunk. The Donkin Project was a Hail Mary by the ating $500 million in annual revenues and putting $100 million
Canadian government to prop up a dying industry; it spent $50 in cash into Cline’s pocket. The reserves are vast enough to last
million in the 1980s to bore twin tunnels 2 miles out under the for decades.
Atlantic Ocean to tap a massive 500 million ton coal bed. By the Is there anything that keeps Chris Cline up at night? “Sago,”
time the shafts were cut in the late 1980s, benchmark coal prices he says, the name of a West Virginia mine then owned by In-
had dropped (see chart, p. 68). When 26 miners died in a 1992 ternational Coal Group where in 2006 a methane explosion
explosion at Nova Scotia’s Westray mine, it seemed like the end killed a dozen miners. Initial reports claimed there were many
of the industry. But time—and higher commodity prices—heals survivors. Which only deepened the anguish once the bod-
all wounds. And Donkin was the perfect size for Cline, who ies were found. Then in 2010 came the disaster at Massey En-
bought 75% of it in late 2014 for an estimated $20 million (he’d ergy’s Upper Big Branch Mine, also in West Virginia, where 29
snap up the remaining 25% the following year). died. Cline had nothing to do with either incident, though over
Since then, ten of Cline’s old Foresight lieutenants have the years four workers have died in his mines, including his best
jumped to Donkin, where they’ve overseen $150 million of in- friend. There are other risks. The Illinois attorney general sued
vestments. That includes a 6,000-hp conveyor system to carry and settled with Foresight for just $300,000 (plus $6.9 million
raw coal out of the mine, run it through a cleaning plant and in mine “retirement obligations”) over the pollution of ground-
hoist it 100 feet in the air, from which pulverized chunks drop water with toxic coal slurry. Lisa Salinas, a critic of Cline who
onto jet-black pyramids. In time the conveyors will extend owns a farm 100 yards from an unlined slurry pond in Carlin-
a half-mile to a barge-loading ville, thinks the settlement is a joke because it “calls for little to
dock. For now front-end loaders no valid mitigation of the existing pollution and, in fact, only
scoop coal into trucks that carry “EVEN THOSE encourages more damage.” A Foresight mine near Hillsboro, Il-
it to Panamax-size ships at near- PROTESTING linois, has been shut since 2015 because of a dwindling coal fire.
by Sydney. Legendary coal trad- KNOW THAT Cline is amused by the popular misconception that coal is on
er Ernie Thrasher is Cline’s part- COAL IS A its deathbed. Yes, coal-fired power plants do continue to close,
ner on the logistics side. He says GOOD THING and U.S. coal output, currently 700 million tons a year, is down
Donkin’s location, nearly halfway FOR THE 30% from its peak. And yet the U.S. still relies on coal for 30%
across the Atlantic, makes ship- of its electric power, compared with just 7% for wind and solar
ping costs to Rotterdam at least
COMMUNITY. combined. Worldwide demand for coal continues to grow, pos-
30% ($5 per ton) less than they IT’S IN OUR sibly (but not definitely) peaking by the mid-2020s. Policy and
would be from central Appala- BLOOD.” technology are the wild cards; Paul McConnell at energy con-
chia. The best coking coal fetches sultancy Wood Mackenzie figures that advances in solar and
more than $200 a ton today. The battery technology plus worldwide carbon taxes have the poten-
simplest way to sum up Cline, ac- tial to erode coal demand by 8% a year.
cording to Thrasher: “He sees value in assets others overlook.” But the death of coal—if it comes at all—will be long and
Environmental opposition in economically depressed Nova slow. Cline aims for his next project, in Alberta, to be a survi-
Scotia is restrained. “Even those protesting the trucks know the vor. He acquired the Vista project via his takeover of the To-
coal is a good thing for the community,” says Paul Carrigan of ronto-listed company Coalspur in early 2015 for an estimated
the Port of Sydney Development Corp. “It’s in our blood.” Eu- $75 million. The seam is 70 feet thick on the surface, so Cline
ropean settlers mined the first coal here 300 years ago. Through will build Vista as a pit mine, then go underground to eventu-
the 1970s mining and steelmaking thrived, employing 20,000 ally tap 1.7 billion tons. By 2022 it could be doing 10 million
before competition from the likes of China wiped it all out. tons per year. Cline is cold-blooded when it comes to push-
There’s talk of using some of Donkin’s output to fuel Nova Sco- ing marginal operators out of business. His Illinois mines took
tia’s remaining coal plants. With plentiful wind and hydropow- business from Appalachia. His Canadian projects will take
er, Nova Scotia is well within Canada’s emissions standards. business away from Illinois. “I think [Vista] could be the last
Even First Nations peoples, like the Mi’kmaq, have been pla- mine operating after they’ve shut down all the rest of the coal
cated with jobs and a royalty on every ton. The mining jobs, in the world,” he says.
paying $100,000 a year, are “an economic lifeline,” says Geoff Cline plans to enjoy the rising sea levels in splendor. He re-
MacLellan, a rep in the Nova Scotia legislature. But how many cently acquired Big Grand Cay, a 280-acre archipelago in the
jobs will there be? At first, Cline had said 200. But in early No- Bahamas that used to be owned by Bob Abplanalp, inventor of
vember—six weeks after Forbes toured the Donkin site with the aerosol spray can. On his iPad, Cline scrolls through plans
Cline—the mine laid off 49 of 130 workers. Just a bump at the for a serene resort amid azure waters and nonjudgmental mas-
start of a long road, Cline says. After they did some test drill- sage therapists. It’s too expensive even for this billionaire to haul
ing for a few months, productivity wasn’t high enough, so they in enough diesel to keep the generators running, so he’s install-
need time to bring in new equipment. Cline is patient. He has ing solar panels and researching Tesla batteries, and has three
no equity partners or outside financing on Donkin. Once the wind turbines on order. “Where it makes sense,” Cline says, “I’m
mine is rocking and rolling, within ten years it could be gener- absolutely for it.” F
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Can I truly make
a difference?
Do I invest in the world I’m in?
Or the one I want?
We think it’s possible to do good and still do well.
Together we can explore new and innovative ways

of creating lasting positive change. This could include
sustainably invested portfolios that uphold your
values while seeking to grow your assets.
The right investments can help make a difference

on the environment and society.
For some of life’s questions, you’re not alone.

Together we can find an answer.
ubs.com /makeadifference
The value of investments can fall as well as rise. You may not get back the amount originally invested. Issued in Australia by UBS AG ABN 47 088 129 613 (AFSL* No. 231087).
*AFSL means holder of Australia Financial Services License. © UBS 2017. All rights reserved.
THE INVESTMENT GUIDE
DO GOOD, GET RICH EDITED BY JANET NOVACK AND MATT SCHIFRIN
IMPACT INVESTING
Hidden Figures
FEMALE ENTREPRENEURS GET SHORT SHRIFT FROM SILICON VALLEY’S VC GIANTS.
JENNY ABRAMSON’S RETHINK IMPACT SEES THAT AS AN OPPORTUNITY TO PROFIT.
BY ASHLEA EBELING
V
enture capitalist Jenny Abramson
is holding her once-a-month
open office hours at Hera Hub,
a women’s co-working space in
Washington, D.C. With her long, straight
black hair swept out of the way over her
right shoulder, she deftly jots notes with
a stylus on an iPad while maintaining eye
contact as Kimberly Linson tells her about
Leaderally, a new professional learning site
for teachers.
Linson, 46, is clutching a Dream/Believe/
Achieve notebook and understandably seems
a tad nervous about the site’s planned Janu-
ary beta launch. She and her two female
cofounders quit their longtime management
jobs at a tutoring company to take the entre-
preneurial plunge.
After peppering Linson with questions,
Abramson declares herself “thrilled” with the
Leaderally concept but suggests the women
market initially to charter school teach-
ers, who typically have less experience and
more flexibility to adopt new methods than
their public school counterparts. Abramson
knows this space; she serves on the board of
D.C. Prep, a high-performing local charter,
and worked in program strategy at Teach
for America between studying genomics as
a Fulbright scholar at the London School of
Economics and earning her Harvard M.B.A.

“The oracle has spoken!” declares a grate-
ful Linson, as she makes way for the next
mentee.
Abramson, 40, is founder and manag- Jenny Abramson’s pitch to female founders: I’ve been in your shoes.

THE INVESTMENT GUIDE DO GOOD, GET RICH
companies with all-male teams. Sure, that’s

just one VC firm’s results. But other studies
also suggest there’s good money to be made
backing women.
Abramson has a less mercenary goal
too: “building an ecosystem” for female
entrepreneurs.
Last summer, as sexual harassment
claims rocked Silicon Valley, she and her
West Coast partner, Heidi Patel, issued a
pointed invitation to women to come in
for advice: “You have kids or lots of other
responsibilities? We see that as a posi-
tive. You can balance a million things at
once. Your office doesn’t have a Ping-Pong
table in it? That’s okay, ours doesn’t either.
Worried we are going to hit on you? Don’t.
We’ve both been in your shoes. We know.
Your job is hard enough already, and we
want to help.”
So far, the two partners and their as-
sociates have met with or had phone and
email exchanges with 700 female founders.
They aim to connect with 2,500 to 3,000
companies during the life of the fund, even
though Rethink Impact will invest in just
25 to 30.
“We’re trying to build a new breed of
VC firm,’’ says Patel, a 42-year-old Stanford
M.B.A. who has spent most of her career in
impact investing. “Our industry has been
in the headlines for all the wrong things
lately. We have the opportunity to level the
playing field in a way no one else is really
doing now.”
Abramson isn’t alone in smelling op-
“We’re trying to build a new breed of VC firm,” says Heidi Patel. portunity. In October the Wharton Social
Impact Initiative reported that 47 U.S.
ing partner of Rethink Impact, which in March closed on funds that invest with a “gender lens” have raised $1.1 bil-
a $112 million fund investing in women-led, tech-driven lion, most of it in just the past few years.
startups with social impact. That might not sound like a lot, Among new funds focusing exclusively on women, Re-
but it’s the biggest VC pot in the U.S. dedicated to female think Impact is one of the best connected. Two investors—
founders. Just 8% of partners at the 100 largest U.S. venture Black Entertainment Television cofounder Sheila Johnson
firms are female, and 58 of those firms have no women and Sachiko Kuno, cofounder of two drug companies—are
partners at all, CrunchBase reports. Moreover, companies on Forbes’ 50 Richest Self-Made Women list.
founded solely by women have snagged just 4.4% of VC Another prominent investor is Jennifer Frist, of the bil-
deals—and less than 2% of VC dollars—since the start of lionaire Frist family of Tennessee. She met Abramson at a
2016, according to data compiled by Pitchbook. Nashville luncheon for 30 potential investors sponsored
The investment case for Rethink Impact is compelling: by UBS Wealth Management, which chose Rethink Impact
If worthy women-led startups have a harder time getting as the first private impact fund it offered to U.S. clients.
funded, then investors ready to give them a fair shot can There’s a good reason for that. John Amore, who heads
pick from the best and capture extra returns. Indeed, when UBS’ impact-investing strategies for the U.S., notes that
First Round Capital reviewed the 300 early-stage invest- women, along with Millennials, are most likely to demand
ments it made between 2005 and 2015, it found those with their investments do more than just make money.
at least one female founder had performed 63% better than “I like helping other women, and I like businesses that

make a difference,” says Frist, who studied computer engi- decades ago her mother, Patty Abramson, raised $50 mil-
neering at Vanderbilt and invested $1 million in Rethink lion for a Washington, D.C.-based venture firm dedicated
Impact, including $250,000 each on behalf of her two to backing women. She even posed holding a cigar on the
daughters, ages 12 and 15. cover of a local tech magazine with the tag line “Wel-
Talk about power networking. Frist brought a guest come to the Club.” But after the 2000 dot-com crash, Patty
to the UBS luncheon: Jessica Harthcock, the 31-year-old Abramson returned the money to investors, exiting with-
founder and CEO of Utilize Health, which coordinates out an overall net loss or gain.
rehabilitative care for patients who have suffered strokes Daughter Jenny didn’t start her work life intending to
and other neurological injuries. Harthcock herself sus- pick up her mom’s mantle. After earning her M.B.A., she
tained a severe spinal cord injury at age 17 during training spent eight years as an executive at the Washington Post
for competitive diving. Frist became her lead angel investor Co. It wasn’t until 2013, when she became CEO of startup
after judging a Steve Case Rise of the Rest competition in LiveSafe—which sells an app to crowdsource safety infor-
Nashville, where Harthcock pitched but didn’t win. Now mation from mobile phone users—that Abramson fully
Harthcock and Abramson are keeping in touch; while appreciated how little progress women had made, funding-
Rethink Impact mentors at the angel and seed stage, it typi- wise, since her mother’s aborted fund. She decided to be-
cally invests in Series A or later rounds. come a venture capitalist herself.
So far, Rethink Impact has put money into 14 In 2015 Abramson partnered with the Seavest Group
companies, including Neurotrack, which offers online to launch Rethink Impact and then started searching for a
screening for cognitive decline to worried Baby Boomers; partner with impact-investing chops. Through her Stan-
Change.org, the e-petition site; Werk, an online platform ford network (Abramson earned a B.A. and an M.A. there)
for finding flexible professional and management jobs; Acli- she connected with Patel, who learned on the ground as an
ma, which designs and deploys air-quality sensor networks; Acumen Fund fellow in India. More recently, Patel helped
and Angaza, a San Francisco- and Nairobi-based pay-as- build a 34-person impact-investing team and a 130-invest-
you-go solar power company. Angaza’s recent Series B was ment impact portfolio for a rich family. On the side, she
led by billionaire Laurene Powell Jobs’ Emerson Collective. teaches impact investing at Stanford’s business school.
In August, Rethink Impact led a $34.6 million round for “There is momentum,’’ Abramson says, as she reflects
Ellevest, a robo-investing site for women, and Abramson on the growing sources of funding for women entrepre-
joined its board. Participants in the round included billion- neurs. Then she hesitates and, in a nod to her mother, adds:
aire Penny Pritzker’s PSP Growth, Chicago money manager “Some people thought there was momentum 20 years ago.
Mellody Hobson, Salesforce Ventures and Khosla Ventures. What’s exciting is our size. It might be a sign that there re-
There’s a bittersweet aspect to Abramson’s efforts. Two ally is change coming [this time].” F
PLAYING THE WOMAN CARD

WHATEVER YOUR NET WORTH, THERE ARE A GROWING NUMBER OF WAYS TO INVEST IN WOMEN’S SUCCESS.
đ Last year State Street launched the SPDR SSGA Gender Diversity Index ETF (SHE), which invests in large-cap U.S.
companies that rank high in their sectors for women in senior management. With an annual expense of just 20 basis
points, it already has more than $350 million in assets.
đƫPAX World Investments offers the three-year-old Ellevate Global Women’s Index Fund (PXWEX) in concert with Sallie
Krawcheck, the cofounder of ElleVest. There’s a 90-basis-point annual charge and $1,000 investment minimum. The
fund has $175 million in assets and has beaten the global-equity benchmark MSCI World Index.
đƫMotif Investing, an online platform that packages fractional shares of individual stocks into portfolios, allows you to
buy into its No Glass Ceiling Motif, for a $9.95 trading fee, with a $250 minimum. It’s made up of public companies
run by women, including PepsiCo, IBM, Oracle, Lockheed Martin and Campbell Soup. (You can customize it further for
$4.95 per stock trade.)
đƫPrivate wealth managers have gotten into the game. U.S. Trust’s Women & Girls Equality Strategy, with a $75,000
minimum investment, picks from companies that score high on equal pay and a positive media portrayal of women.
Morgan Stanley’s Parity Portfolio, with a $100,000 minimum, invests in companies with at least three women board
members and policies favorable to women.
đƫWhile Rethink Impact is now closed to new investors, other VC partnerships investing in women are still raising funds.
Minimum investments range from $10,000 for the New Hampshire-based Impact New Hampshire to $250,000 for True
Wealth Ventures, based in Austin, Texas. —A.E.

ALTERNATIVE ENERGY
The Fossil-Free
Oil Play
YOU CAN GET YOUR EXPOSURE TO RISING FUEL
PRICES WITHOUT TOUCHING THE STUFF.
BY WILLIAM BALDWIN
W
hat makes you want to buy solar
stocks—guilt or greed? Lucas White,
who picks those stocks at Grantham,
Mayo, Van Otterloo, could justify
his portfolio either way. But it was more the payoff
on energy that got him started.
Six years ago GMO assigned White to help run its
natural resources portfolio. There’s no way to operate
such a portfolio without a hefty exposure to energy.
And that got White thinking about the financial haz-
ards embedded in oil and gas wells.
“All the risks I saw over the short to medium term
you can diversify away from,” he says. “But not the
long-term risk, the stranded-asset risk. Carbon regu-
lation could mean that your coal, tar sands and heavy
oil can never be developed. Technological disruption
could render your assets useless.”
Solution: Put some of your energy money with
the anti-oil crowd. Own solar and wind companies.
Alongside a well-diversified allocation to
fossilized-energy companies like Royal Dutch Shell,
Statoil and Chesapeake Energy, the GMO Resources
Fund has money in companies like First Solar, which
makes photovoltaic panels; Sociedad Química y
Minera, which mines lithium; and Iberdrola, a
Spanish utility that gets a third of its electricity from
renewable sources.
But there are only so many investors who want
their clean stocks mixed in with the dirty ones. So
this year GMO created an offshoot of its resources
fund: a pure play on green called the GMO Climate
Change Fund. With alternative-energy stocks, White
says, you can get all the exposure you need to crude
oil prices without touching carbon. When oil goes
up, it takes oil substitutes with it. Of course it takes Lucas White, climate-sensitive stock picker at GMO.
them down, too. The collapse in oil three years ago did a
lot of damage to alt-en shares. berance, sees clients walk out the door during bull markets. (At
The thinking behind the two funds for which White is lead $74 billion, GMO’s assets under management are half what they
manager comes from Jeremy Grantham, the 79-year-old co- once were.) He is also a passionate environmentalist, devoting
founder and chief investment strategist of GMO. Grantham is a time and money to saving the planet.
strange mix. He is a hard-nosed value investor who, refusing to The resources fund follows an environmental theme, a bet
get swept up in Wall Street’s periodic episodes of irrational exu- on costly energy and scarce minerals. The climate fund fits right

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in. It will be of interest to any endowment manager who’s under with storage included, less than a nickel per kilowatt-hour. Give
pressure to divest oil and gas companies. this trend a little time and the utilities will be switching away
White, 43, is a younger version of Grantham, combining from carbon without any political pressure.
portfolios with ecology. He commutes to his Boston office by Next item on our worrywart list: some breakthrough in solar
foot and train. He is a follower of environmental hellfire preach- or fusion that makes existing investments as irrelevant as Block-
er Bill McKibben. He predicts a sea-level rise of 6 to 10 feet if buster in a Netflix era. White downplays this one. “The risk of
carbon is oxidized with abandon. disruptive technology doesn’t eat me up at night,” he says. “The
But White is not an irrationally exuberant greenie. He dis- risks I worry about are the risks with any company: You buy at
misses the notion, famously promoted by Stanford professor the wrong price. You pay for growth that does not come through.
Mark Jacobson, that the U.S. could run entirely on renewable Competitors drive down margins.”
energy by 2050. He’s not going to buy an electric car until the Erosion of profit margins is just what happened in solar-pan-
economics are more compelling. And he isn’t willing to pay el manufacturing, once a darling on Wall Street and then, over-
more for a company just because it’s virtuous; his portfolio night, nothing but a commodity business. Guggenheim Solar
trades, according to Morningstar, at a cheap 14 times projected ETF shares are off from $295 a decade ago to $25 now.
earnings. You can guard against this kind of financial risk two ways.
How does White contend with the risks in alternative en- One way is to seek companies with product lines that are not
ergy, as great, perhaps, as the risk that Shell will wind up with easily duplicated. It’s easy to set up a solar-panel assembly line. It
stranded assets? One is the risk of a shift in public policy. Ger- would be hard to copycat the assembly of a 700-foot-tall turbine
many is experiencing a backlash against a renewables crusade of the sort made by Vestas Wind Systems. It would be hard to
that has consumers paying triple U.S. prices for electricity. The imitate the circuitry that SolarEdge Technologies sells to make
House tax plan would chop subsidies for windmills and electric commoditized panels work better.
cars. White’s answer: The political risk is going away as the costs The other place to find a margin of safety is in the price of a
of wind and solar power come down. Despite their squawking share. Conspicuously absent from the GMO portfolio is Tesla,
about the tax bill, producers of renewable power have almost trading at ten times book and a not meaningful multiple of its
outgrown their need for subsidies. negative earnings. The Spanish utility Iberdrola, in contrast, has
Another hazard on the road to carbon independence: the no visionary talking about rockets and hyperloops. It costs 1.1
not yet solved problem of storing electricity from intermittent times book and 14 times trailing earnings.
sources. Not far from where White grew up near Albany, New White’s climate fund has a $10 million minimum. If that’s
York, is a system that stores energy in the form of 20 million tons out of range, consider one of the retail mutual funds in this sec-
of water pumped up a hill. It would be nice to have such storage tor, but be careful, because irrational exuberance abounds in
depots in the Midwest, where the wind blows hard but unreli- green energy. Interesting fact: Not counting short-selling and
ably. Alas, Kansas does not have New York’s hills. leveraged funds, the worst ten-year performance in the Morn-
Lithium batteries to the rescue? Maybe. They’re expensive. A ingstar universe has been delivered by the Guinness Atkinson
collection of Tesla Powerwalls that could duplicate that upstate Alternative Energy Fund.
New York pond would run you $4.8 billion. White says the Another approach: Create your own stock portfolio. The
cost of storage will come down, too, enough so that renewably shopping list below has a fair amount of overlap with GMO
sourced electricity will cost, without help from subsidies and Climate Change. But diversify—this is a risky business. F
GREEN DOLLARS
THESE FIRMS HELP SHRINK THE CARBON FOOTPRINT OF ENERGY CONSUMPTION.
MARKET ENTERPRISE
COMPANY BUSINESS TICKER PRICE CAP ($BIL) MULTIPLE2
FIRST SOLAR SOLAR PANELS FSLR $60.61 $6.3 NM

IBERDROLA RENEWABLE ELECTRICITY IBE.MC 7.651 48.3 9.3
JINKOSOLAR HOLDING SOLAR PANELS JKS 24.60 0.8 8.1
NIBE INDUSTRIER B HEAT PUMPS NIBE-B.ST 9.551 4.8 20.5
ORMAT TECHNOLOGIES GEOTHERMAL PLANTS ORA 64.09 3.2 12.0
PRYSMIAN CABLES FOR OFFSHORE WIND PRY.MI 33.361 7.0 10.7
SIEMENS GAMESA RENEWABLE ENERGY RENEWABLE ENERGY EQUIPMENT SGRE.MC 10.971 7.4 9.6
SOCIEDAD QUÍMICA Y MINERA LITHIUM SQM 56.42 14.9 21.6
SOLAREDGE TECHNOLOGIES PHOTOVOLTAIC INVERTERS SEDG 39.70 1.7 18.0
TERRAFORM POWER A RENEWABLE ELECTRICITY TERP 12.96 1.8 16.5
VESTAS WIND SYSTEMS WIND TURBINES VWS.CO 58.621 12.3 6.5
ITALICIZED FIRMS ARE IN THE GMO CLIMATE CHANGE FUND’S LATEST PUBLISHED PORTFOLIO.
CONVERTED TO DOLLARS. 2RATIO OF ENTERPRISE VALUE (MARKET CAP PLUS DEBT MINUS CASH) TO EBITDA (EARNINGS BEFORE DEPRECIATION, INTEREST AND TAXES). SOURCES: YAHOO; MORNINGSTAR.
1

BROKERS
Middle Mensch
IMPACT OUTFITS LIKE DAVID FANGER’S SWELL—AND THE INSURANCE
GIANT BACKING IT—ARE BETTING LOW FEES, MINUSCULE MINIMUMS
AND A FEEL-GOOD FOCUS WILL LURE MILLENNIAL INVESTORS.
BY ZACK O’MALLEY GREENBURG
I
f you think Hollywood is full
of excrement, consider the
Donald C. Tillman Water
Reclamation Plant, a facility
that processes 45.6 million gallons
of Los Angeles-area sewage per
day—precious stuff in southern
California. Peering out across Till-
man’s bubbling muck, mustachioed
operations manager Michael Ruiz
offers a line reminiscent of Chi-
natown or Mad Max. “Everyone’s
fighting for this water,” he says
grimly. “Water wars.”
Nobody knows this better than
the founder and CEO of impact
outfit Swell Investing: hard-hat-
clad David Fanger, who listens in-
tently as Ruiz explains the promise
of new pumps made by a company
called Xylem. The gear being tested
at Tillman helps blast wastewater
with ozone, a technique just as
safe but much cheaper and quicker
than traditional osmosis cleansing.
One day, Xylem’s technology could
help Ruiz realize annual savings
of about 40%, reducing the cost of
delivering treated water to nearby
public parks and the San Fernando
Valley—in lieu of precious potable
water—by about $10 million.
“Of all the companies in our
clean water portfolio, Xylem is the
most discussed,” says Fanger, 40.
“By 2030, demand will outweigh
supply by 40%, so that’s a huge
ETHAN PINES FOR FORBES
quantity of water to supply.”

Investors can buy into Xylem
and 43 other companies, like
biocide maker Albemarle and Green thumb: David Fanger’s six impact-driven Swell portfolios like Clean Water are on a tear.

THE MOMENT YOU HELP US
REACH THEM IN TIME
MALAWI 2015 © Luca Sola
Make this your moment.

DoctorsWithoutBorders.org/Donate
wastewater reuse outfit Air Products & Chemicals, through ing his and other diseases. But when his first iteration went
Swell’s Clean Water portfolio. If water’s not your thing, you live in early 2015, its roster of holdings was dominated by
can choose among theme portfolios including Healthy Living, bulk givers like Wal-Mart and Goldman Sachs—a big turnoff
Disease Eradication, Zero Waste, Green Tech and Renewable for most Millennials. There was also the issue of interface:
Energy—all based around the UN’s sustainable development Because Fanger’s startup wasn’t yet a registered investment
goals. advisor, users had to buy into his portfolios through Motif, a
Swell is still tiny, managing just $13 million in assets brokerage platform that lets people invest in themed baskets
for some 2,000 customers. But they’re young (average age: of stocks. After an initial burst of interest, Swell’s clunky ap-
36) and their numbers are growing quickly (by about 14% plication faltered.
each week), lured by relatively low fees (0.75% versus twice With Pacific Life’s backing, Fanger split from Motif and es-
that for some peers) and a minuscule minimum investment tablished Swell as a registered investment advisor, built a new
($50). Unlike its startup brethren, Swell should have plenty website and mobile interface where consumers could trade its
of runway given its status as a subsidiary of Pacific Life, the products and brought on analysts to put together more entic-
150-year-old financial services giant with assets of $143 ing portfolios. The new version went live in May 2017, and
billion that has happily shelled out $11 million to bankroll with the wind of the bull market at its back, Swell’s investor
Fanger’s brainchild. base has been growing rapidly.
Pacific Life is betting on an emerging trend: Millennials “We know that consumers don’t want to sacrifice return,”
wanting more than financial returns from their portfolios. Fanger says. All six of his portfolios have matched or beaten
index benchmarks since May.
Of course, Fanger isn’t the first to offer a
retail solution for impact investing. A mini-
Pacific Life was intrigued by mum of $1,000 gets you into BlackRock’s
a product that might reel in a Impact U.S. Equity and Impact Bond funds,
while upstart Aspiration Redwood Fund
younger audience than its base of requires just a $100 outlay, though some may
be disappointed to find both are packed with
annuity customers. blue chips, unlike Swell’s small-cap-heavy
portfolios.
Then there are new-breed robo-advisors
Recent reports have placed the global market for socially Wealthfront and Betterment, which charge annual advisory
responsible investing at $23 trillion, reaching $53 trillion by fees starting at 0.25% and feature minimums of $500 and $0,
2025; a study by Morgan Stanley found that 38% of Millen- respectively; both introduced socially focused options of their
nials are very interested in sustainable investing versus 23% own over the summer. Brokerage outfit FOLIOfn beefed up
of the total population; 90% said they wanted eco-focused its impact-investing reach last year by acquiring First Affir-
401(k) options. mative Financial Network, which specializes in social outlays.
“The next generation of investors wants to align their The aforementioned Motif does offer customizable portfolios
money with their values,” says Adrian Griggs, Pacific Life’s including impact options like Sustainable Planet, Fair Labor
chief operating officer. “From shopping to investing, they and Good Corporate Behavior, and charges a monthly fee of
want their dollars to have a positive impact on the world. $9.95 with a $1,000 minimum.
That’s why we’re so excited about Swell.” Fanger differentiates his offering by dealing only in impact
Fanger came up with the idea for Swell while working in investing. Unlike his robo rivals, he doesn’t use algorithms to
Pacific Life’s M&A department in 2012 on a due-diligence generate portfolios; Swell’s team works to create and update
visit to a particularly demoralized company in New York. them as companies’ contexts change (Whole Foods getting
“Wow, the staff ’s not happy,” Fanger noted to colleague Liam gobbled up by Amazon, for example). It also offers customers
Monaghan on the flight back to California. “The values they more flexibility than a traditional actively managed fund (if
have don’t really align with this positive element that employ- you think Tesla is overvalued, or if you don’t want the nuclear
ees are looking for.” So the duo decided to create something exposure of Actuant, you can simply remove them from your
that would allow people to invest in companies that made Swell portfolio).
them feel good. They built out a website to display the prod- But as with proverbial story stocks on Wall Street, Swell’s
uct with the help of a six-figure infusion from Pacific Life, success, in the midst of an impact-investing gold rush, may
which was intrigued at the prospect of seeding a product that hinge on the aspects of its pitch that can’t be quantified—like
might reel in a much younger audience than its base of annu- that rural farmer who uses Xylem’s pumps to save countless
ity customers. hours that would otherwise be spent trekking back and forth
Fanger, a type 1 diabetic, scoured public databases to find to distant wells. Assures Fanger: “Somebody working on their
out which publicly traded outfits donated the most to fight- farm will be able to get that water.” F

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INSPIRED TO BUILD. iShares.com/build
1. Source: BlackRock and Morningstar, as of 12/31/16. Comparison is between the average Prospectus Net Expense Ratio for the iShares Core Series
ETFs (0.08%) and the average Prospectus Net Expense Ratio of active open-end mutual funds (1.17%) available in the U.S. on 12/31/16. Visit
www.iShares.com or www.BlackRock.com to view a prospectus, which includes investment objectives, risks, fees, expenses
and other information that you should read and consider carefully before investing. Investing involves risk, including
possible loss of principal. Buying and selling shares of ETFs will result in brokerage commissions. The iShares funds are distributed by BlackRock
Investments, LLC (together with its af⇒liates, “BlackRock”). © 2017 BlackRock. All rights reserved. iSHARES and BLACKROCK are registered trademarks
of BlackRock. All other marks are the property of their respective owners. 285131
PROMOTION
CYBERSECURITY
2018 A Year In Preview
BY DEREK MANK Y, GLOBAL SECURIT Y STR ATEGIST, FORTINET FORTIGUARD L ABS
We have created a global society of universal connectivity,

where individuals and organizations expect to have instant
access to data and services across a variety of interconnected
devices. It’s transforming our society. And it’s creating a rich
vein of valuable information, goods and computing resources
for our adversaries to extract, extort and exploit.
1 Cybersecurity
PROMOTION
B
etween ransomware attacks, remote mobile phone hacks Much like legitimate institutions, these criminal networks have
and massive consumer data breaches, it’s very difficult started to take on characteristics of a long-term institution. They
to name a part of our technological framework that isn’t deploy (or hijack) high-power distributed computing clusters to
under assault. The current generation of cybercriminal perform research, experiment in sandbox settings and launch
is organized, motivated and well-funded, uncovering attacks. There is a real risk of the cybercrime economy disrupt-
weaknesses and infiltrating systems at tremendous speed ing the emerging digital economy.
and scale. The cybercriminal marketplace has become adept at
adopting the latest advances in technology, such as automation Basic Cybersecurity Hygiene Failures Continue
and artificial intelligence (AI) to create more effective attacks. Adaptive, intelligent, hive-minded malware (see the Artificial
And as mobile, cloud and the Internet of Things (IoT) continue Intelligence sidebar) is a serious next-generation threat that must
to grow, new disruptive opportunities emerge for cybercriminals be taken seriously. However, the root cause of many of the most
as the attack surface grows. significant and damaging breaches is the same today as it was
Well-known attacks and breaches from 2017 foreshadow the at the origins of the Internet: a fundamental failure to prac-
massive disruptions and economic impacts possible in our near tice good cybersecurity hygiene. Poor passwords, unprioritized
future, resulting from the ransom and disruption of commer- patch scheduling, end-of-life systems and improper user permis-
cial services or intellectual property. The imminent risks will sions continue to open the door to an unacceptable number of
require a coordinated effort of both human and machine intelli- opportunistic attacks.
gence to combat them. Here’s a look at what you need to know The mass spread of IoT devices, which tend to have wide-
now to be prepared for 2018. open access profiles by default and are often shipped to the wild
with no hope of ever receiving manufacturer security updates,
Cybercrime Continues To Institutionalize will further open doors to attack. This means doing more than
Hacking is big business, on both an individual and state-actor committing to sound patching discipline and policy revision.
level. There’s even a way to hire out for malware, from a grow- Organizations must dedicate themselves to finding ways to
ing number of so-called “crime-as-a-service” outfits that will purge unsustainably insecure devices whenever possible, and rig-
validate exploits or deploy botnets against targets for a fee. orously segment and protect those that cannot be removed.
"SUJàDJBM*OUFMMJHFODF Friend And Foe

Artificial intelligence has a huge role to play devices that are remotely programmed pre-programmed instructions, it will
on both sides of the cybersecurity equation. to target other vulnerable systems with select targets of opportunity, assess their
The industry faces a protracted and severe malware, or to infect them via blunt-force weaknesses, develop a plan of attack and
skill shortage. AI can perform both rote attacks, such as denial of service. Botnets cover its tracks. And it will make intelli-
management tasks more quickly and effi- are dangerous and account for billions of gent decisions about what information to
ciently, without getting bored or distracted. unauthorized network communications exfiltrate, and when. In short, tomorrow’s
It can also learn new and better security every quarter. The hivenet , however, is AI attacker will behave with the autonomy
practices from the evolving digital frame- much more frightening because each unit and inventiveness of a highly skilled and
work it inhabits. In our world where connec- of the hivenet, a swarmbot , will itself be motivated human attacker, but at frighten-
tivity has far outpaced security, intelligent powered by AI. Swarmbots will be able to ingly higher speeds.
agents that can heal and defend themselves make autonomous decisions without rely- Hostile AI will be extremely dedicated to
are invaluable allies. Machine learning has ing on a botnet herder and join together into exploration, finding weaknesses at every
already proven effective in sandbox envi- larger autonomous thinking networks. The possible crease in the network perimeter.
ronments at exploring potential vulnerabili- potential for hivenet damage is substantially Without any need for operator interven-
ties and devising defenses. greater than anything we have faced from tion, it will be able to fully map targets,
But cybercriminals are developing their already-potent botnets. design and deploy exploits, and even col-
own AI, and are unlikely to do so ethically. That’s why one of the most serious lect (and spend) ransoms.
In legitimate lab settings, AI can be care- threats we face in 2018 and beyond is These are not fever dreams. These are
fully monitored and trained for years to malware with the capability to learn and the clear and demonstrable goals of the
be predictable and reliable. Cybercrimi- grow through its own successes. Polymor- cybercriminal branch of artificial intelli-
nals are less likely to avoid these poten- phic malware with pre-coded algorithms gence research. Unsupervised, unfettered
tially dangerous side effects, favoring designed to subvert countermeasures AI poses a massive threat to data security
speed over safety. Malware rings resem- and screens is already a reality. But that and infrastructure integrity.
bling intelligent swarms of angry bees are approach simply generates millions of We are at a very delicate moment in
already starting to appear, weaponizing slight variations on the same theme. Next- our transformation to a digital society and
IoT devices against their owners. gen AI-generated malware will be aware economy. Humans and machines must work
It is the rise of the hive. Today, the term and capable of adapting itself. together to prepare for the next level of
botnet refers to automated, zombie-like Instead of simply following a set of sophistication.
Cybersecurity 2
PROMOTION
Mobile Attacks Will Intensify Activities Performed By FortiGuard Labs (Based On Q3 2017)
Mobile devices are small, powerful, always
on and always connected. They have access
to some of the deepest details of our personal
and professional lives. They have sensors
that can take detailed records of our every
move. And that’s why they are the target
of more than 1 in every 10 global cyber-
security attacks. Designing and deploying
remote jailbreaks that can completely sub-
vert a mobile phone to an attacker’s control
is big business, and it’s getting bigger.
Distributed Infrastructure
Intensifies Risk
In a recent Fortinet Threat Landscape
Report, the median organization responding
to the survey used over 60 cloud solutions,
roughly divided between software and
infrastructure clouds. With this complexity
comes increased risk. When organizations rely on dozens of dif-
ferent providers, they provide dozens of potential attack vectors. Ongoing attacks against critical
There were compelling business cases for embracing such a dis-
tributed and highly elastic infrastructure, but we are seeing the
infrastructure providers will expose the
consequence today. It is extremely difficult to gain complete vis- fact that these networks are among
ibility into and control over every potential security weak point.
And distributing network resources has not distributed risk. the most vulnerable in the world.”
In fact, we see the exact opposite: Global resources are more — Derek Manky
closely interconnected than ever. This phenomenon, called net-
work hyperconvergence, means that we tend to see major attacks
span multiple industries and regions all at once. potentially affecting service for millions and millions of users
and undermining millions of dollars in daily revenue. It’s hap-
Encryption Is Confounding Early Warning Systems pening already. Recently, a South Korean hosting provider paid
There is a growing push for end-to-end encryption, partic- a $1 million ransom to restore services.
ularly through HTTPS. We saw total HTTPS traffic eclipse Ongoing attacks against critical infrastructure providers will
in-the-clear HTTP in 2017 at 55 percent and climbing. All expose the fact that these networks are among the most vulnera-
that encrypted traffic comes at a cost for threat monitoring and ble in the world. Continuity of service and economic disruption
detection. Encrypted traffic is not inherently safe, it is merely will be widespread unless these organizations accelerate their
obscured from prying eyes. And that can include the perime- adoption of advanced security systems.
ter defenses meant to scan traffic and identify malicious activity.
Because it is more difficult for automated threat detection to scan A Clear Need For A Security Fabric
encrypted traffic, attackers can actually slip past some screens by Considered individually and collectively, the scope and severity
including malware in HTTPS sessions. of the threat landscape underscores the need for a new approach
The end-to-end encryption trend is unlikely to reverse for to cybersecurity. We have no shortage of monitors, alarms,
other valid reasons, so organizations will need to continue to workarounds and procedures in our defense tool kits. What we
dedicate resources both to inspecting encrypted traffic when fea- need now is a more active and coordinated way to unify them at
sible and to finding ways to prop up other areas of protection speed and scale as a cohesive security fabric.
where perimeter scans are less effective. An integrated, collaborative and highly adaptive security
fabric will put AI and self-learning to work on effective and
Ransomware Will Continue To Follow The Money autonomous responses to attacks. It will combine technology,
And Expose Deep Vulnerabilities configuration, intelligence and judgment to perform basic secu-
The cost of disruption from high-profile ransomware attacks rity functions and day-to-day tasks currently being performed by
has significantly outstripped the amount victims have paid; for workers. This will enable those individuals to focus on creating
the most part, those hit by attacks like WannaCry have not paid security principles and practices relevant to the highly organized
their malefactors. The black hats carefully chose targets that opponents we face. And it will transition us away from organic
deliver crucial services, like healthcare, financial services and and accidental network architectures toward a new design capa-
critical infrastructure, hoping that the need to keep the lights on ble of standing up against intense, relentless, sustained attack.
would force victims to capitulate. Our adversaries are adopting automated and scripted tech-
Expect them to double down on this strategy and go niques, so we need to raise their price of attacking to combat
after cloud services. Getting the upper hand on a major cloud today’s new normal. The time to watch and react is past. In 2018,
infrastructure provider would represent tremendous leverage, cybersecurity must become proactive.
3 Cybersecurity
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MONEY MANAGERS
Green Is Good,
for Returns
DO-GOODERS WANT TO INVEST
SUSTAINABLY TO SAVE THE WORLD.
KARINA FUNK DOES IT TO MAKE MONEY.
BY JEFF KAUFLIN
A
s Karina Funk sips a can of raspberry seltzer, she ex- engineering and then spent a frustrating year working as an en-
tols the virtues of Ball Corp. of Broomfield, Colorado, vironmental engineer. “I was the last person any shift manager or
which manufactures 43% of the aluminum beverage business leader wanted to see or spend time with. I was nothing
cans made in North America. The portfolio manager but a cost sink,” she said in a 2015 TEDx Talk. “They just wanted
has a big stake in Ball, and she thinks its approach
to environmental sustainability gives it a competi-
tive advantage. “They design the top so that it has
structural integrity, using less material—that’s a cost
advantage,” she says between spoonfuls of lentil soup.
She explains that aluminum is easier and cheaper to
recycle than plastic or glass, partly because much less
water is used. “Ball is growing in Brazil and helping
some of those regions meet their sustainability goals
in the shift from glass to cans.”
Funk is in charge of the $1.1 billion devoted to
sustainable investing strategies at the Baltimore money
manager Brown Advisory. The 45-year-old vegetar-
ian, who works in the firm’s Boston office, cares deeply
about the environment—she rides her bike 7 miles
to work every day, even in the winter. She and her
husband own just one car for their family of four, and
they use it only twice a month. Funk manages Brown
Advisory’s Sustainable Growth Fund with her Prius-
driving comanager, David Powell. They’re both pas-
sionate about sustainability, but when it comes to their
fund, making a positive impact on the environment
is secondary. “Sustainability is a means, not an end in
and of itself,” Funk says. “Our end goal is performance.
We achieve that by finding fundamentally strong com-
panies using sustainability strategies to get even better.”
Since its 2009 inception, Brown’s Large-Cap Sustain-
able Growth strategy, which holds 34 stocks, has
returned 15.6% net of fees annually, compared with
14.5% for the Russell 1000 Growth Index. Although
it’s a small piece of Brown Advisory’s $60 billion in as-
sets, it has ballooned 50% since January.
Funk grew up in Indiana but spent many sum-
mers in her mom’s native Bolivia. She was inspired

by the beauty of the Andes but disturbed when
she saw open-pit mines dribbling toxic runoff. She
graduated from Purdue with a degree in chemical Brown Advisory’s Karina Funk: Being green is no longer a cost sink.

Where Timeless
Suits You
Fashion. Food. Art. New York, NY
Environmental, social and governance (ESG)

investing means different things to different money
managers (see story, p. 100). Many screen out entire
industries like fossil fuels and tobacco, and some
focus on corporate diversity. Funk and Powell
concentrate on environmental and economic de-
velopment aspects, essentially the “E” and the “S.”
Although they don’t own any tobacco, alcohol, gam-
ing, weapon or fossil-fuel companies, they don’t have
a rule against investing in them.
One of the fund’s biggest winners has been Eco-
lab, which makes, among other things, dish-cleaning
chemicals for restaurants. It has invested heavily in
research and development to reduce the amount of
water and energy needed to clean dishes. Its custom-
ers have noticed. The fund first invested in Ecolab in
2010 at $47. Today it trades around $130.
American Tower first attracted Funk for its barri-
ers to entry. “I was salivating at their business model,”
she says. “They own and operate cell towers. They
have huge cash flow and a highly visible revenue
stream because when a carrier like AT&T or Verizon
needs coverage, there’s not a whole lot of choice.
People don’t want more than one tower in an area.”
Funk started to seriously consider investing when
an analyst discovered that American Tower claimed
to exceed EPA standards. She says she asked senior
executives why, and they explained it was helpful in
getting permits. They also said they were investing in
renewable energy like solar so that they could reliably
deliver cell service in emerging markets.
Funk and Powell call a company’s alignment of
business and sustainability strategy its “sustainable
business advantage.” In order to invest, they need
Sustainable Growth’s comanager David Powell: Composting alone won’t cut it.
to be convinced the advantage will lead to revenue
growth, cost reduction or improved brand value.
me to measure their emissions, rubber-stamp compliance and Some otherwise attractive investments don’t make the cut.
regulations and get the heck out.” She landed at MIT in 1995 to Powell thinks Sherwin-Williams is a “fantastic paint company,”
get master’s degrees in both civil and environmental engineering, but its sustainability report, which mentions things like com-
and technology and policy. After a few environmental-related posting in the break room, doesn’t appear to make a difference
stints in consulting, venture capital and institutional investing, in to its bottom line. Conversely, Tesla’s disappointing cash flow and
2007 she became an analyst at Winslow Management, a green- Funk’s doubts about its scalability have kept the otherwise envi-
investment specialist. Brown Advisory, formerly a part of the in- ronmentally friendly stock out of their portfolio. A top holding,
vestment bank Alex. Brown & Sons, acquired Winslow in 2009. Alphabet, has data centers that are 50% more energy-efficient
Funk and Powell’s approach is to find companies that fit three than its peers’ because it optimizes the way data is stored and
criteria: strong growth prospects, attractive valuation and a pro- accessed. Facebook is also a top holding, despite recent research
active investment in sustainability strategies—not just to reduce showing a link between usage and declining mental health. “No
risks and protect against phenomena like climate change but investment is pristine,” Funk says. She cites the global efficiencies
to seize economic opportunity. Funk says some of the top U.S. generated by Amazon’s fast-growing Web services as a reason to
companies have told her, “Here’s our sustainability report. Look own the stock, despite its workplace transgressions. What about
how much renewable energy we use.” She typically responds, gender and ethnic diversity? Funk is forced to ignore it because
“Okay, why does your CFO care about that?” If they don’t have screening for companies with 20% or 30% female board repre-
an answer—if the company isn’t making the connection between sentation would leave her with too few options.
long-term sustainability strategy and long-term business strat- For investors, the message is clear: Check the returns, then
egy—she doesn’t invest. pick your poison. F

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FUNDS
Portfolio Placebos
THESE DAYS, PEOPLE WANT TO BELIEVE THEIR INVESTMENTS ARE SAVING THE
PLANET. FUND MARKETERS ARE MORE THAN HAPPY TO OBLIGE.
BY JEFF KAUFLIN
I
f you listen to the marketing hype, assets devoted to ESG— fund uses higher-level screening criteria like respect for human
industry jargon for investments sensitive to environmental, rights instead of taking a more granular approach.
social and governance issues—account for some $8.7 trillion, American Century’s rechristened Sustainable Equity fund over-
double the amount just five years ago. That’s great news for hauled its portfolio using data from MSCI’s sustainable-investment
the planet, right? Not so fast. Much of the growth is a matter of research arm and Sustainalytics. It sold stocks like ExxonMobil. “It’s
semantics. What were once run-of-the-mill value or growth funds not really a leader amongst peers in terms of climate change,” says
are being reclassified as sustainable or ESG-friendly. Reiland. Yet it held on to ConocoPhillips and bought Marathon
Take, for example, American Century’s $227 million Sustain- Petroleum. The fund also kept cigarette merchant Philip Morris
able Equity Fund. In 2004 it launched with the name Fundamental International because, Reiland says, the company is promoting
Equity, focusing on large companies. Last year the frequent un- e-cigarettes. Real reason: “Every financial study showed we would
derperformer was renamed to meet growing investor demand for have better performance including Philip Morris,” he says.
sustainable investing. Says portfolio manager Joe Reiland, “We all Ave Maria, a $2 billion money manager, screens out companies
want to preserve the environment and do well and do good.” that don’t comply with the values of the Catholic Church—firms
Even more rampant than shape-shifting funds are those with that contribute to causes affiliated with abortion, and even hotels,
liberal definitions of what qualifies as ESG. Take the two largest because they rent adult films. But some sin stocks have Ave Maria’s
asset managers in the world, BlackRock and Vanguard. Both have blessing. Its Rising Dividend Fund owns Hexcel, which makes
ESG funds with holdings that defy what many might consider fighter jet parts, and liquor maker Diageo. “Jesus’ first miracle was
socially responsible. BlackRock’s MSCI KLD 400 Social ETF holds turning water into wine,” says portfolio manager Brian Milligan.
McDonald’s, ConocoPhillips and Occidental Petroleum, even According to Yale professor and sustainability expert Daniel
though McDonald’s has struggled with ongoing labor disputes Esty, part of the problem is flawed data and a lack of standardiza-
and many ESG funds steer clear of companies that hold fossil-fuel tion. For greenhouse-gas emissions, some companies report only
reserves. BlackRock declined to comment on specific holdings. the emissions of their own facilities, while others add in their sup-
Vanguard’s SRI (socially responsible investing) European Stock ply chain’s emissions. Few people understand this nuance, so those
Fund counts British American Tobacco and Royal Dutch Shell as that report more diligently look worse.
top holdings. “That’s terrible.... a travesty,” says Jerome Dodson, Some funds like CGM Focus get high rankings for sustainabil-
manager of $4.9 billion (assets) Parnassus Endeavor, a strict ESG ity even though it’s not their mission at all. Given the surge in inter-
adherent with a stellar 12.4% ten-year average annual return. Mark est in ESG, don’t be surprised if “sustainability” soon joins P/E and
Fitzgerald, Vanguard’s head of equity products in Europe, says the EPS growth as a key fundamental measure of a company’s worth. F
SOCIALLY IRRESPONSIBLE?
AUM EXP. YTD
ESG FUND NAME ($MIL)1 RATIO RETURN2 CONTROVERSIAL HOLDINGS
BLACKROCK ISHARES MSCI $959 0.50% 19% MCDONALD’S (LABOR DISPUTES); FOSSIL-FUEL MERCHANTS
KLD 400 SOCIAL ETF CONOCOPHILLIPS, OCCIDENTAL PETROLEUM AND HESS.
AVE MARIA RISING $933 0.93% 15% LIQUOR GIANT DIAGEO, DEFENSE SUPPLIER HEXCEL AND EXXONMOBIL.
DIVIDEND FUND
VANGUARD SRI EUROPEAN STOCK $721 0.35% 12% BRITISH AMERICAN TOBACCO AND ROYAL DUTCH SHELL.
FUND
AMERICAN CENTURY $227 1.00% 23% PHILIP MORRIS INTERNATIONAL, CONOCOPHILLIPS; ALSO, AMERICAN
SUSTAINABLE EQUITY CENTURY REPEATEDLY VOTES AGAINST SUSTAINABILITY DISCLOSURES.
STATE STREET S&P FOSSIL $188 0.25% 21% CHANGED NAME TO ADD THE WORD “RESERVES” IN 2016 TO REFLECT
FUEL RESERVES FREE ETF HOLDINGS LIKE HALLIBURTON AND SCHLUMBERGER.
WASHINGTON MUTUAL $97 0.58% 17% “THE BLUEST OF BLUE CHIPS.” SHUNS SMOKES, BOOZE. HOLDS GMO AND
INVESTORS FUND PESTICIDE PUSHER MONSANTO, PLUS LOCKHEED MARTIN, EXXONMOBIL.
1ASSETS UNDER MANAGEMENT. 2NET OF FEES.

EDUCATION FOR LIFE
LEARN MORE. CALL 866.467.7651 OR VISIT WWW.OUTWARDBOUND.ORG

Forbes Life TRAVEL
EUROPE
Vista Palazzo
Lago di Como, Italy
This intimate hotel will be the first five-
star property right in the city of Como,
combining stunning views of the lake
with easy access to restaurants and shops
when it opens in June. Housed in a for-
mer palazzo, it has 18 rooms and suites
and a spectacular rooftop “infinity bar”
with a counter overlooking the water.
Four Seasons Hotel

Megève, France
A modern interpretation of an alpine
chalet, Four Seasons’ first European
mountain hotel has 55 guest rooms and
suites, and five restaurants and lounges,
including a new incarnation of the Mi-
COMO UMA CANGGU
chelin two-star restaurant Le 1920. In
addition to 235 groomed snow runs in
winter, guests have preferred access to
the Mont d’Arbois Golf Club close by.
Around the VISTA PALAZZO

LAGO DI COMO
World in ’18 Ways

From Bogotá to Bali, the hottest new hotels and resorts for 2018.
BY ANN ABEL
Thanks to ambitious new hotels opening around the world, 2018 is shaping up to be
another great year to travel. Whether one-off boutiques or strategic brand expansions
that were years in the making, these hotels share a close attention to detail and design Royal Lancaster London
and a determination to redefine the meaning of luxury. Big brands are making big bets This midcentury icon in Hyde Park cel-
on up-and-coming cities like Warsaw and Bogotá, while upstart indies are offering ebrated its 50th birthday with a $105
new takes on destinations we thought we knew. Here’s what’s on the map for 2018. million renovation that was complet-
ed in November. All 411 rooms and
suites emerged with a new take on the
AS I A era in which the hotel was born—low
COMO Uma February. The architecture
silhouettes, clean lines and the occasion-
Capella Shanghai, Canggu, Bali is modern Asian in style,
and ground-floor rooms al groovy color. The fabulous views of the
Jian Ye Li Christina Ong’s third hotel London skyline through the walls of win-
have direct access to the
Now in soft opening, the on the island will bring sinuous swimming pool dows haven’t changed.
latest hotel from the high- her understated approach from their terraces, while
luxury Capella brand is to luxury to Bali’s less- upper floors have spar- Raff les Europejski
dripping with Shanghai- er-traveled south coast in kling sea views. Warsaw
in-the-’30s glamour. It oc- Some say eastern Europe is the new
cupies a 1930s estate built western Europe. The Asian brand Raf-
in the shikumen architec- fles seems to be making that bet, with a
tural style, with elaborately significant restoration of the Hotel Eu-
carved matou gable walls ropejski, once one of the most luxurious
and a series of narrow al- hotels in 19th-century Russia. Local con-
leyways, inner courtyards servationists were heavily involved with
and embellished stone the Polish architects and designers as
arches over the gates and they reimagined the 106 guest rooms and
doorways. French star suites. The restaurant will have an out-
chef Pierre Gagnaire is be- door terrace and modern Polish menu,
hind the restaurant and while the patisserie will evoke the past.
CAPELLA SHANGHAI, JIAN YE LI
boulangerie.

Forbes Life TRAVEL
AFRICA U N I T E D S TAT E S
Anantara Tozeur, Tunisia The NoMad

Los Angeles
Decades after rising to fame as a lo-
cation for the original Star Wars, this The latest addition to DTLA’s hotel
southwestern city—a hub for Saharan boom adapts its New York sibling’s
adventures—is finally getting a luxu- haute-cool vibe to the more laid-back
ry resort. Opening in the summer, the West Coast. Opening in January in
property will have 93 guest rooms and the historic Giannini building (once
villas, some with private pools. There the Bank of Italy), the NoMad has 241
will be a sophisticated spa, an all-day Jacques Garcia-designed rooms, casu-
dining room showcasing Tunisian cui- al and formal restaurants, and an all-day
sine and a Thai restaurant, in honor of Anantara’s origins in Southeast Asia. Italian-inspired
cafe—all run by
Daniel Humm
and Will Guida-
Hotel Cartesia- ra of Eleven
SILVERSANDS
no, with 78 rooms Madison Park
and suites in three and the NoMad
18th-century New York.
buildings a stone’s
throw from the Perry Lane Hotel,
main city square Savannah, Georgia
and many histor- Bridging the antebellum past with the dy-
ical sites. The de- namic present, this hotel aims to offer
sign is woven with modern Southern hospitality at its best.
contemporary On the main thoroughfare of the historic
L AT I N A M E R I C A / and two globally inspired
CA R I B B E A N Mexican art and arresting downtown, the Perry Lane will have 167
restaurants. architectural elements like
Silversands refined residential guest rooms when it
sections of beautifully de- opens this spring. The development team
Grenada Hotel Cartesiano, cayed original brickwork. spent five years studying Savannah, so
The first major resort Puebla, Mexico
they’ve figured out how to transform all
to open on Grand This historic city has long Zadún, a Ritz- that history into a 21st-century hotel.
Anse beach in 25 years, been esteemed for its rich Carlton Reserve
Silversands will bring a history and colonial ar- Los Cabos, Mexico
new level of luxury to the chitecture but until now Cabo is getting a new in-
southern island when it has been lacking in equal- fusion of grown-up luxu-
opens in March. Along ly charming places to stay. ry via the latest outpost of
with 43 suites whose That changed in Novem- Ritz-Carlton’s highest-of-
decor makes heavy use ber with the opening of high-end hospitality. On
of soothing natural ma-
HOTEL CARTESIANO the coast of San José del
terials, it will have a 100-
Cabo, the resort has 115
meter swimming pool, the
elegant villas that blend
longest in the Caribbean.
local culture and heri-
Guests and the eventual
tage—many with private
buyers of the nine
pools—two championship Rosewood Miramar Beach
residential villas will share
a spa retreat, a beach club
golf courses and a desert Montecito, California
botanical park.
The site of the former Miramar by the
Sea Hotel in Santa Barbara County—
a 100-year-old landmark in the local
SOUTH AMERICA
community—will get new life this sum-
mer when Rosewood opens this proper-
Grand Hyatt Bogotá ty. Spread over nearly 16 acres of beach-
Hyatt’s first luxury hotel in one of South Amer- front land, it will contain 124 guest
ica’s new capitals of cool will bring Grand Hy- rooms and 37 suites, many of them
att-brand hallmarks—thoughtful design, at- in single-story bungalows, which will
tentive service—and reflect the vibrant energy make it one of the first resorts in the
of this budding metropolis. In the heart of the area to have accommodations right by
prestigious new Ciudad Empresarial Sarmien- the sand. And everyone gets the view
to Angulo development, the hotel will have 373 from the oceanfront bar and restaurant
rooms with floor-to-ceiling windows, two signature restaurants and an expansive spa. and the private beach club.
FINAL THOUGHT “The man who is cocksure that he has arrived is ready for the return journey.” —B.C. FORBES

PROMOTION
FIVE STAR AWARD WINNERS

You Need to Know
FIVE STAR WEALTH MANAGERS FIVE STAR INVESTMENT PROFESSIONALS
You work hard and want your money to work hard for you! RESEARCH DISCLOSURES
You’re likely seeking solid investments and financial strategies In order to consider a broad population of high-quality wealth managers
that fit your family and your situation. These days, finding and investment professionals, award candidates are identified by one of
the right wealth manager is an integral part of securing one’s three sources: firm nomination, peer nomination or prequalification based
financial freedom and well-being. But where should you turn on industry standing. Self-nominations are not accepted. Award candidates
to find the adviser who can start working for you? were identified using internal and external research data. Candidates do
not pay a fee to be considered or placed on the final lists of Five Star Wealth
Five Star Professional employed a rigorous research process to Managers or Five Star Investment Professionals.
identify the Five Star Wealth Manager award winners in cities Although this list is a useful tool for anyone looking for help in managing
across the U.S. Award-winning professionals were carefully their financial world or implementing aspects of their financial strategies,
selected from among thousands of wealth managers for their it should not be considered exhaustive. Undoubtedly, there are many
excellent professionals who, for one reason or another, are not on this year’s
knowledge, service and experience (see list and disclosure for lists.
full list of cities covered).
4The Five Star award is not indicative of a professional’s future
Winners featured here represent some of the most dedicated performance.
wealth managers, each committed to pursuing professional 4Wealth managers may or may not use discretion in their practice and
excellence and providing exceptional service to their clients. therefore may not manage their clients’ assets.
Five Star Professional identified award candidates based 4The inclusion of a professional on the Five Star Wealth Manager list or
on industry data nominations received from industry firms the Five Star Investment Professional list should not be construed as an
endorsement of the professional by Five Star Professional or Forbes.
and individuals (self-nominations are not accepted). Only
candidates who satisfied 10 objective eligibility and evaluation 4Working with a Five Star Wealth Manager, Five Star Investment
Professional or any professional is no guarantee as to future investment
criteria have been named Five Star Wealth Managers. success, nor is there any guarantee that the selected professionals will be
For the full lists of Five Star Wealth Managers and an overview awarded this accomplishment by Five Star Professional in the future.
4Five Star Professional is not an advisory firm, and the content of this
of the research methodology, visit fivestarprofessional.com article should not be considered financial advice. For more information on
the Five Star Wealth Manager or Five Star Investment Professional award
programs, research and selection criteria, go to
www.fivestarprofessional.com/research.
Five Star Investment Professional Criteria

Five Star Professional’s Investment Professional award goes to outstanding accountants,
estate planning attorneys, insurance agents and select others in the financial industry.
Award candidates must satisfy the following criteria to be named a Five Star Investment
Professional:
Eligibility Criteria – Required
1.Credentialed with appropriate state or industry licensures. 2. Actively employed as a
Five Star Wealth Manager Criteria credentialed professional in the financial services industry for a minimum of five years. 3.
The Five Star Wealth Manager award is presented to wealth managers who satisfy 10 Favorable regulatory and complaint history review.
objective eligibility and evaluation criteria associated with outstanding work. 4. Accepting new clients.
Eligibility Criteria – Required Evaluation Criteria – Considered
1. Credentialed as an investment advisory representative or a registered investment 5. One-year client retention rate. 6. Five-year client
advisor. 2. Actively employed as a credentialed professional in the financial services retention rate. 7. Number of client households
industry for a minimum of five years. 3. Favorable regulatory and complaint history review. served. 8. Recent personal production and
4. Fulfilled their firm review based on internal firm standards. 5. Accepting new clients. performance (industry specific criteria). 9.
Education and professional designations/industry
Evaluation Criteria - Considered and board certifications. 10. Pro Bono and
6. One-year client retention rate. 7. Five-year client retention rate. 8. Non-institutional community service work.
discretionary and/or non-discretionary client assets administered. 9. Number of client
households served. 10. Education and professional designations.
FIVESTARPROFESSIONAL.COM #fivestarprofessionalaward 1
PROMOTION

Gary Allen Harris Matt Meyers
'E8F<78AG4A7& CRPC®, President
Gary Harris is president and CEO of the Gary Harris Private Client
Group, Inc., a wealth management and financial advisory firm
and the creator of Cycle-Logical Wealth Management System
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“Cycle Systems” a proprietary wealth management system his 5
YEAR HFG<A*.O';BA8
firm markets exclusively. WINNER
@4GG6ESA4A6<4?F8EI<68F 6B@O(<A4A6<4?)8EI<68F
An esteemed wealth and investment manager with more Left to right: Five-year winner Matt Meyers, Sr.; Planning for your future is not just a fiscal
than 25 years of experience, Harris meets with legislators on Matthew Meyers, Jr.
decision, but an emotional one as well. We take
Capitol Hill regularly to discuss the insurance industry as an OInvestment management and retirement the time to listen and comprehend your goals,
ambassador for the Association for Advanced Life Underwriting income planning allowing us to guide you toward the optimum
(AALU). Harris has also given financial talks at the Black
OEstate planning and generational wealth choices based on your needs. As always, we
Women’s Expo, the National Association of Realtors and as a
transfer stand for integrity, honesty and stability.
financial correspondent on the Jerry Rose Show.
Investment adviser representative and registered representative of, and securities and investment advisory
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Michael D. Ruggiero Mark Greenberg

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Francisco Bay area as a Five Star Wealth Manager award winner
OCustom retirement and investment strategies
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&T68 YEAR OThree-time Five Star Wealth Manager award winner
WINNER
Seated on right: Three-year winner michael.d.ruggiero@ampf.com
Michael D. Ruggiero Our client’s retirement security and investment success are our
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@<6;48? 7 EH::<8EB Trusted and Informed top priorities. Trusted for decades, we create highly effective
For over 10 years Michael has been successfully helping his clients with estate, business succession and Advice plans for your wealth and security. Join us!
retirement distribution planning. Michael is diligent about helping his clients find financial independence
through establishing clear goals and discipline. Five Star Wealth Manager, 2013, 2014 and 2017.
Wealth & Tax <GEHF<E6?8)G8 O-4?AHGE88>
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Nancy A. Effert Timothy P. Gelinas

President and Financial Advisor CAS®, CFS®, CSA, President – Senior Financial Planning, LLC
OStraightforward, unbiased advice and fiduciary approach

With over 19 years of experience, Tim has been diligently
OGoal-based financial strategies meeting the needs of his clients. He and his team specialize in
OProject-based or ongoing, fee-based relationship helping retirees and those about to retire preserve and protect
You’re successful, the best at what you do, but sometimes the their assets. Tim’s personalized service has won him numerous
4 6 awards, including the NAIFA Quality Award for 2013 – 2016.
YEAR
WINNER
right advice can make all the difference. Anchored in active YEAR
WINNER
listening, trust and knowledge, we focus on you and your He has been a member of the Fidelity Advisor Council since 2013.
The Wealth Management unique situation — because the potential success of a plan, Helping Protect What You’ve Worked for All Your Life
Approach for Today, strategy or advisory relationship isn’t only about the dollars,
Tomorrow, and Beyond… but also the effect it has on your life, family and legacy.
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2 #fivestarprofessionalaward F I V E S T A R P R O F E S S I O N A L . C O M
PROMOTION

United Captial Erik Potts
Financial Advisers CERTIFIED FINANCIAL PLANNER™, 'E8F<78AG
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OTom Baumler, CFP® OPorter Landreth WINNER
Left to right: Six-year winners Tom Baumler, CFP®,
and Pam Dumonceau
OErwin Buck, CFP® ONancy Rinker
OPam Dumonceau As a CFP®, Erik has over 14 years of experience helping his clients reach their financial goals. To set
OPersonalized partnering with your adviser the foundation for planning with clients, Erik builds a comprehensive panoramic financial view
OComprehensive retirement, investment and tax strategy* of their lives. As an independent CFP®, he is able to provide his clients with unbiased advice and
OIndependent, objective advice strategic solutions to help them build their financial road map. Erik primarily advises retirees,
business owners and families that have loved ones with special needs
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Paul Gassel Grant Ulrick

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OComprehensive wealth management

OInvestment advisory O Asset-management, retirement, insurance and planned giving
ORisk management O Comprehensive financial planning, and estate planning
Paul Gassel is both a financial advisor and the managing partner
6
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of WWM Investments, LLC, serving his clients since 1995. Paul 5
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WINNER assists with the accumulation and protection of personal wealth WINNER With over 20 years of experience in the financial services
tailored to meet the complex and rapidly evolving financial industry, Grant uses a goals based approach to meeting the
Planning Today for markets. He works to continuously enhance his reputation for needs of each client. If you are looking to grow, manage or
Tomorrow accessibility, professionalism, performance and the depth and distribute your wealth it may be time for a conversation.
quality of his long-lasting consultative relationships with clients.
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5
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perspective. Coordinating with other advisors, we help people 3
YEAR fixed-income investments. He has been an advocate for clients
WINNER retire well with our core philosophy of serving clients’ needs WINNER
and their families to reach their current income needs while
first, last and always. planning future income goals with an emphasis on municipal
bonds and capital preservation strategies. 2015 – 2017 Five Star
4:?8I<8JBH?8I4E7)H<G8OKGBA' Wealth Manager.
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PROMOTION

Award winners are listed by city, profession and then alphabetically by last name.
Atlanta Matthew Manning ∙ Morgan Stanley
∙ 410-229-8217
Zachary Larson ∙ Thrivent Financial
∙ 630-821-6990
Thomas Mench ∙ Mench Financial
∙ 513-745-5111
Dallas/Fort Worth
Wealth Managers David Latko ∙ Latko Wealth Jeffrey Stanley ∙ Morgan Stanley Wealth Managers
2,378 Atlanta wealth managers were Boston Management ∙ 815-469-8887 ∙ 513-762-5317 2,730 Dallas/Fort Worth wealth managers
considered for the award; 301 (13 percent
of candidates) were named 2017 Five Star
Wealth Managers Elaine Lewis ∙ Morgan Stanley Mark Wilkins ∙ Thrivent Financial
were considered for the award; 382 (14 percent
Wealth Managers. 2,819 Boston wealth managers were considered ∙ 312-648-3564 ∙ 513-942-0200 Wealth Managers.
for the award; 532 (19 percent of candidates)
Erik Anhaus ∙ Benedetti Gucer & were named 2018 Five Star Wealth Managers.
Wade Lewis ∙ Morgan Stanley Scott Cohen ∙ CD Wealth Management
Associates ∙ 404-602-0034 ∙ 312-648-3600 Columbus ∙ 972-499-6280
Stuart MacKinnon ∙ Morgan Stanley
Jaime Benedetti ∙ Benedetti Gucer & ∙ 617-589-3217 Russell G. Luce ∙ Planning Legacies Wealth Managers Charles Constant ∙ Constant Wealth
Associates ∙ 404-602-0034 Financial Group ∙ 708-499-0700 828 Columbus wealth managers were Management ∙ 214-504-2332
Reza Niazi Sai ∙ Morgan Stanley
Mark Callaway ∙ Morgan Stanley ∙ 617-570-9259 Edward McNamara ∙ Morgan Stanley considered for the award; 71 (9 percent of Frances Gardner ∙ Hornor Townsend &
∙ 404-264-4288 ∙ 312-827-6632 candidates) were named 2017 Five Star Kent ∙ 469-737-4108
Brian Wilder ∙ Morgan Stanley Wealth Managers.
Sean Foote ∙ Morgan Stanley ∙ 617-589-3426 Judith McNiff ∙ Wells Fargo Advisors David Little ∙ Little & Associates
∙ 847-405-7317 Scott Armstrong ∙ Signature Financial
∙ 404-459-3802 Wealth Management ∙ 817-494-9000
Group ∙ 614-846-6000
Emma Foulkes ∙ Greenwood Wealth Charlotte Susan Milanak ∙ LPL Financial
∙ 847-680-3082 Margaret McLurg ∙ Ameriprise
John Vann ∙ Level Four Wealth
Management ∙ 404-633-9952 Management ∙ 866-834-1040
Kristen Fricks-Roman ∙ Morgan Stanley
Wealth Managers Lori Miller ∙ LPL Financial
Financial Services, Inc. ∙ 614-389-5017
Michael Woods ∙ Stocker Woods
949 Charlotte wealth managers were ∙ 630-690-0000 Daniel Roe ∙ Budros Ruhlin & Roe
∙ 404-459-3812 Financial ∙ 940-566-1212
considered for the award; 132 (14 percent ∙ 614-481-6900
Kenneth Munao ∙ Morgan Stanley
Kevin Garrett ∙ LPL Financial of candidates) were named 2017 Five Star
∙ 847-842-1534 John Schuman ∙ Budros Ruhlin & Roe Investment Professionals
∙ 770-353-6311 Wealth Managers.
∙ 614-481-6900 We honored 12 Dallas/Fort Worth investment
Timothy Gelinas ∙ Senior Frank Goins ∙ Suntrust Private Wealth David Purkey ∙ Morgan Stanley professionals with the 2017 Five Star
Financial Planning ∙ Management ∙ 704-526-4433 ∙ 312-827-6740 Investment Professional award.
770-973-5220 Page 2
Connecticut
George Kroustalis ∙ Captrust Advisors Lisa Radomski ∙ Morgan Stanley A. Grava ∙ The DI Center
Barry Munro ∙ Munro Legacy Planners ∙ 704-927-0360 ∙ 312-648-3518 Wealth Managers ∙ 972-774-9663
∙ 770-321-6648 Stephen Thomas ∙ Linden Thomas & Michael Riback ∙ Hoopis Financial 2,218 Connecticut wealth managers were
Derrick Rivera ∙ Ameriprise Financial Company ∙ 704-554-8150 Group ∙ 312-356-2186 considered for the award; 283 (13 percent
Denver
Services, Inc. ∙ 404-591-2452 Michael D. Ruggiero ∙ Ameriprise Wealth Managers. Wealth Managers
Michael Ross ∙ The Wealth Chicago Financial Services, Inc. ∙ 708-226-
James W. Coleman, Sr. ∙ Coleman 1,716 Denver wealth managers were considered
Enhancement Group ∙ 770-777-1845 3400 Page 2
Wealth Managers Dennis Ryan ∙ World Equity Group
Financial Advisory Group, LLC for the award; 287 (17 percent of candidates)
were named 2017 Five Star Wealth Managers.
Allen Rutledge ∙ Capital Planning & ∙ 203-756-7526
3,781 Chicago wealth managers were
Investments ∙ 770-499-0262 ∙ 224-425-4360 Willis Ashby ∙ Integra Financial
considered for the award. 438 (12 of Michael Del Re, III ∙ Financial Network
Laura K. Schilling ∙ Financial candidates) were named 2017 Five Star David Schlossberg ∙ Assured Concepts Limited ∙ 203-878-8194 ∙ 303-220-5525
Innovations, LLC ∙ 404-458-0065 Wealth Managers. Group ∙ 847-426-1077
Michael Del Re, Jr. ∙ Financial Network Tom Baumler ∙ United
Justin Streeter ∙ Ameriprise Financial Andrew Allison ∙ Ameriprise Financial Corey Schmidt ∙ Thrivent Financial Limited ∙ 203-878-8194 Capital Financial Advisers
Services, Inc. ∙ 678-831-4532 Services, Inc. ∙ 312-533-4038 ∙ 630-821-6990 ∙ 303-804-0101 Page 3
Glenn Hottin ∙ Wealth Management
Bryan Taylor ∙ Cornerstone Jay Bann ∙ Morgan Stanley Sandra Stevens ∙ Mass Mutual Advisers ∙ 203-836-8506 Mike Broker ∙ Trilogy Financial
Management Inc. ∙ 770-449-7799 ∙ 630-245-6034 ∙ 630-441-1050 ∙ 303-300-3323
John Jacobs ∙ Jacobs Financial Partners
Peter Wilder ∙ Ameriprise Financial Scott A. Brown ∙ RAI Wealth John D. Straley ∙ Infinity Wealth ∙ 860-657-8757 John Browning, II ∙ The Browning
Services, Inc. ∙ 770-431-5125 Management ∙ 630-687-9884 Management ∙ 847-426-3311 Group II ∙ 303-799-6110
Geoffrey Kanner ∙ Kanner Financial
Veronica Cardenas ∙ Cardenas Asset Mary Tomanek ∙ Morgan Stanley Pamela Dumonceau ∙ United
Investment Professionals Managment ∙ 312-945-3740 ∙ 847-480-3605
Services ∙ 203-239-5370
Capital Financial Advisers
Klingner ∙ Morgan Stanley
We honored 26 Atlanta-area investment
Gabriel Chavez ∙ Ameriprise Financial Daniel Waddick ∙ Wunderlich Securities ∙ 303-804-0101 Page 3
professionals with the 2017 Five Star ∙ 800-704-7309
Investment Professional award. Services, Inc. ∙ 630-487-2484 ∙ 312-368-0412 Margaret English ∙ LPL Financial
David Lamay ∙ Essex Financial Services
Norman Chiodras ∙ Retirement Daniel Younglove ∙ Morgan Stanley ∙ 303-793-0605
Gary Reed ∙ Reed Financial Group ∙ 860-767-4300
∙ 678-442-0255 Planners Inc. ∙ 630-495-9700 ∙ 630-203-6170 Josephine Erwin-Buck ∙ United
Jayme Lemaire ∙ Wells Fargo Advisors
David Cyrs ∙ CYRS Wealth Advisors, LLC Capital Financial Advisers ∙ 303-804-
Ellen Springer ∙ Springer & Company ∙ 860-430-5397
∙ 815-316-1111 Cincinnati 0101 Page 3
CPA’s ∙ 770-429-0299 Daniel Massucci ∙ Massucci &
James Graham ∙ Lincoln Financial
Randy Dippell ∙ Nestegg
Wealth Managers Associates ∙ 860-628-0434
Advisors ∙ 303-714-4761
Austin, San Antonio and ∙ 312-971-5860
985 Cincinnati wealth managers were Robert Pascarell ∙ Financial Network
Bruce Hemmings ∙ Morgan Stanley
Central Texas Donald D. Duncan ∙ D3 Financial considered for the award; 288 (29 percent Limited ∙ 203-878-8194
∙ 970-776-5501
Counselors ∙ 312-526-3680 of candidates) were named 2017 Five Star
Wealth Managers Nancy Effert ∙ Effert Financial
Wealth Managers. Dominic Schioppo ∙ New England
Brad Jenkins ∙ Jenkins Wealth
Financial Group ∙ 860-313-4820
1,431 Austin, San Antonio and Central Texas- Solutions, Inc. Dwayne Adams ∙ Adams Wealth ∙ 720-457-6844
region wealth managers were considered for ∙ 815-444-9560 Page 2 Management Group ∙ 866-513-2099 Elise Shartsis ∙ Morgan Stanley
Porter Landreth ∙ United Capital
the award; 207 (14 percent of candidates) were ∙ 518-742-2054
named 2017 Five Star Wealth Managers. Spiro Garbis ∙ Ameriprise Financial Greg Brown ∙ Brown Financial Advisors Financial Advisers
Services, Inc. ∙ 630-515-0055 ∙ 513-575-9654 Jane Sullivan-Klett ∙ Sullivan Financial, ∙ 303-804-0101 Page 3
Matt Meyers, Sr. ∙ Crossroads LLC ∙ 860-657-4150
Financial Services Krzysztof “Kris” Garlewicz ∙ Prosperifi, Ken Byers ∙ Ameriprise Financial Shawn Moore ∙ Morgan Stanley
Grant Ulrick ∙ Stratos ∙ 303-572-4837
∙ 800-356-2175 Page 2 LLC ∙ 847-292-4475 Services, Inc. ∙ 513-792-8023
Wealth Partners
Paul Gassel ∙ WWM Investments LLC Robert Castellini ∙ Morgan Stanley Jarrod Musick ∙ Destiny Capital
∙ 203-617-1501 Page 3
Baltimore ∙ 312-356-2167 Page 3 ∙ 513-762-5292
Joan Valenti ∙ LPL Financial
∙ 303-277-9977
Robert Edwards ∙ Morgan Stanley Nancy Rinker ∙ United Capital
Wealth Managers Gary Allen Harris ∙ Gary Harris
∙ 513-762-5223
∙ 860-677-7790
Financial Advisers
Private Client Group, Inc.
1,759 Baltimore wealth managers were
∙ 800-558-9769 Page 2 Brian Vendig ∙ MJP Wealth Advisors ∙ 303-804-0101 Page 3
considered for the award; 232 (13 percent Christopher Flores ∙ Three Corners ∙ 860-677-7755
of candidates) were named 2018 Five Star Bradley Jenks ∙ Star Capital Capital ∙ 513-745-7014 T.H. Williams ∙ Wells Fargo Advisors
Wealth Managers. Management ∙ 847-244-0010 Richard Vogler ∙ Ameriprise Financial ∙ 303-850-7900
Youngjin Jung ∙ Morgan Stanley Services, Inc. ∙ 860-466-7272
∙ 513-762-5233
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who
successfully complete CFP Board’s initial and ongoing certification requirements. The Chartered Financial Consultant credential [ChFC®] is a financial planning designation awarded by The American College.
4 #fivestarprofessionalaward F I V E S T A R P R O F E S S I O N A L . C O M
PROMOTION

Investment Professionals New Hampshire Paolo Costa ∙ Morgan Stanley Bryan Berry ∙ Old Dominion Asset James Laughlin, Sr. ∙ Wells Fargo
We honored 19 Denver-area investment ∙ 610-260-8611 Management ∙ 804-858-0045 Advisors ∙ 636-530-6111
professionals with the 2017 Five Star Wealth Managers Nicholas Dawit ∙ Morgan Stanley Tim Call ∙ The Capital Management Harvey Ziegler ∙ Morgan Stanley
Investment Professional award. 739 New Hampshire wealth managers were ∙ 215-963-3814 Corporation ∙ 804-270-4000 ∙ 314-889-4888
Pamela Fraser-Shenkin ∙ CeFO considered for the award; 89 (12 percent
of candidates) were named 2017 Five Star Seth Diener ∙ Diener Money Dale Chambers ∙ Ameriprise Financial
∙ 720-506-4100 Wealth Managers. Management ∙ 215-675-3030 Services, Inc. ∙ 804-421-0676 Twin Cities
Richard Whipple ∙ WhippleWood
∙ 303-989-7600
Deborah Nitzschke ∙ Ameriprise Robert Fattizzi ∙ Ameriwealth Tom Love ∙ The Main Street Group Wealth Managers
Financial Services, Inc. ∙ 603-428-4344 Retirement Services ∙ 215-443-0974 ∙ 804-270-4470 2,622 Twin Cities wealth managers were
Michael Panico ∙ Arcadia Financial James Gillin ∙ Morgan Stanley Corey Nesmith ∙ Ameriprise Financial considered for the award; 591 (23 percent
Detroit Group ∙ 603-681-9190 ∙ 610-408-1949 Services, Inc. ∙ 804-249-6236 of candidates) were named 2018 Five Star
Wealth Managers.
Wealth Managers Erik Potts ∙ Panorama Tom Graybill ∙ Ameriprise Financial Timothy Thompson ∙ Old Dominion
Services, Inc. ∙ 610-524-1200 Asset Management ∙ 804-858-0045 Amy Aadalen ∙ Morgan Stanley
1,836 Detroit wealth managers were considered Wealth Strategies
∙ 612-371-8824
for the award; 356 (19 percent of candidates) ∙ 603-658-1800 Page 3 Jacob Guzman ∙ Morgan Stanley
were named 2017 Five Star Wealth Managers.
∙ 215-963-3853 Rhode Island John Falldin ∙ Morgan Stanley
Joseph Fisher ∙ Morgan Stanley New Jersey David Hibshman ∙ AXA Advisors Wealth Managers
∙ 952-921-1935
∙ 248-740-7149 ∙ 610-668-1094 Ryan Lewis ∙ Morgan Stanley
Wealth Managers 476 Rhode Island wealth managers were ∙ 651-472-8087
Grant Holdren ∙ Allied Financial considered for the award; 188 (40 percent
Hudson 4,383 New Jersey wealth managers were
considered for the award; 415 (9 percent Consultants ∙ 215-497-8368 of candidates) were named 2017 Five Star Paul Peterman ∙ Morgan Stanley
∙ 507-529-4403
Wealth Managers of candidates) were named 2018 Five Star Kenneth Jones ∙ Morgan Stanley
Wealth Managers.
Wealth Managers. Louis Goldman ∙ Morgan Stanley Thomas Rishovd ∙ Morgan Stanley
241 Hudson Valley wealth managers were ∙ 302-657-2020
considered for the award; 39 (16 percent Stanley Alpert ∙ Morgan Stanley ∙ 401-276-5925 ∙ 612-340-6748
Thomas Kalejta ∙ Kalejta Financial
∙ 973-467-6362 Marcus Waterbury ∙ Morgan Stanley
Management ∙ 610-831-2195
Wealth Managers.
David Armstrong ∙ Morgan Stanley San Diego ∙ 612-340-6755
Lawrence DeNoia ∙ LPL Financial Charles Korger ∙ Carson Choice
∙ 908-483-9525
Retirement Solutions ∙ 610-664-5550 Wealth Managers
∙ 914-734-2800
Diana Armstrong ∙ Morgan Stanley 1,498 San Diego wealth managers were
Washington, D.C.
William Marshall ∙ Ameriprise
∙ 908-483-9526
Indianapolis Financial Services, Inc. ∙ 215-757-7600 considered for the award; 228 (15 percent
Wealth Managers
Geoffrey Close ∙ Morgan Stanley 1,417 Washington, D.C. wealth managers were
Ryan Murray ∙ Ameriprise Financial
Wealth Managers ∙ 973-425-2309
Services, Inc. ∙ 215-757-7600
Wealth Managers.
1,164 Indianapolis wealth managers were Dax Fletcher ∙ Morgan Stanley of candidates) were named 2017 Five Star
Vijay Dalal ∙ Morgan Stanley
considered for the award; 182 (16 percent Brendan O’Reilly ∙ Ameriprise Financial ∙ 619-236-1331 Wealth Managers.
∙ 201-967-6203
of candidates) were named 2017 Five Star Services, Inc. ∙ 267-759-6087
Keith Sippy ∙ Morgan Stanley Roger Achtermann ∙ Morgan Stanley
Wealth Managers. Yash Dalal ∙ Morgan Stanley
James Pfizenmayer ∙ Morgan Stanley ∙ 619-544-6581 ∙ 703-739-3688
∙ 201-967-6356
Lisa Brown ∙ Ameriprise Financial ∙ 610-260-7115
Marguerita Cheng ∙ Blue Ocean Global
Steven Hadley ∙ Morgan Stanley
Services, Inc. ∙ 317-251-8910
∙ 973-660-4776
Americo Santella ∙ Morgan Stanley San Francisco Wealth ∙ 301-502-5306
Kris Highfield ∙ Ameriprise Financial ∙ 215-854-6018
Services, Inc. ∙ 317-251-8910 Evan Katz ∙ Morgan Stanley Wealth Managers Michael Freiman ∙ Morgan Stanley
John Shimp ∙ Ameriprise Financial ∙ 202-778-1382
∙ 973-912-7727 1,488 San Francisco wealth managers were
Scott Holley ∙ SBC Wealth Services, Inc./RidgePoint Financial considered for the award; 49 (3 percent of Andrew Gibson ∙ Ameriprise Financial
Management ∙ 317-848-4744 Gregg Kaufman ∙ Morgan Stanley Partners ∙ 610-825-4909 candidates) were named 2017 Five Star Services, Inc. ∙ 301-320-0500
∙ 973-467-6368 Wealth Managers.
Kevin Karlander ∙ Thrivent Financial Yong Wang ∙ Advanced Financial
Tom Greaser ∙ Wells Fargo Advisors
∙ 317-797-1554 Kishor Kumar ∙ Morgan Stanley Strategies ∙ 215-757-2535 Bruce Rosen ∙ Wells Fargo Advisors ∙ 202-414-3326
∙ 908-626-8640 ∙ 415-288-4368 Page 3
Robert Moritz ∙ Money Concepts Susan Yelen ∙ Morgan Stanley
Dywane Hall ∙ LPL Financial
∙ 317-566-2121 Michelle Torcivia Madsen ∙ Morgan ∙ 570-821-1817
∙ 703-750-3393
Patrick Morrow ∙ SBC Wealth
Stanley ∙ 973-660-4716 San Francisco East Bay
Nicole Harrison ∙ Financial Advantage
Management ∙ 317-848-4744 Michael Mall ∙ Mall Retirement Group Phoenix Wealth Managers Associates ∙ 301-610-0071
∙ 856-817-6250
Erin Pentz ∙ SBC Wealth Management Wealth Managers 1,049 San Francisco East Bay wealth managers Mary Liola ∙ Concentric Private Wealth
∙ 317-848-4744 Thomas Regan ∙ Morgan Stanley were considered for the award; 95 (9 percent
1,335 Phoenix wealth managers were ∙ 703-891-9966
∙ 973-425-2350 of candidates) were named 2017 Five Star
Carson Shadowen ∙ SBC Wealth considered for the award; 130 (10 percent
Jennifer Myers ∙ Sagevest Wealth
Tia Regan ∙ Morgan Stanley of candidates) were named 2017 Five Star Wealth Managers.
Management ∙ 317-848-4744 Management ∙ 703-992-7650
∙ 973-425-2328 Wealth Managers. James Brandt ∙ Morgan Stanley
Debra Spencer ∙ Spencer Financial John Rothe ∙ Riverbend Investment
Robert Torcivia ∙ Morgan Stanley Perry Buckman ∙ Wells Fargo Advisors ∙ 925-930-3866
Strategies ∙ 317-566-2050 Management ∙ 703-349-6327
∙ 973-660-4778 ∙ 480-368-5781 Mark Greenberg ∙ Wealth &
Charles Werckenthien ∙ SecurEstate Shajhan Sabir ∙ Wells Fargo Advisors
Nancy Fleming ∙ Fleming Financial Tax Planners
∙ 765-778-7415
Philadelphia Services ∙ 480-632-8770 ∙ 925-938-4300 Page 2 ∙ 703-444-8950
R. David Williams ∙ RDW Financial Adam Warshavsky ∙ Morgan Stanley
Robert Harbeke ∙ Wells Fargo Financial Benjamin Wong ∙ Viewpoint Financial
Group ∙ 317-802-7672 Wealth Managers Network ∙ 480-477-8494 Network ∙ 925-227-8858 ∙ 202-778-1590
Nancy J. Wilson ∙ Wilson Wealth 3,022 Philadelphia wealth managers were
Mark Woodward ∙ Blue Ocean Partners
Solutions ∙ 317-572-1390 considered for the award; 437 (15 percent Bruce Peterson ∙ Wells Fargo Financial
of candidates) were named 2017 Five Star Network ∙ 480-245-6109 St. Louis ∙ 703-539-8640
Wealth Managers.
Los Angeles Brent Pine ∙ Integrated Wealth Wealth Managers Matthew Zaft ∙ Morgan Stanley
Robert Biggs ∙ Morgan Stanley Management ∙ 480-663-6000 ∙ 202-857-5425
1,681 St. Louis wealth managers were
Wealth Managers ∙ 215-963-3827 considered for the award; 181 (11 percent
2,708 Los Angeles wealth managers were
Kimberly J. Brumbaugh ∙ Richmond of candidates) were named 2017 Five Star
Wealth Managers.
Brumbaugh Wealth Management ∙
610-458-2495 Page 3 Wealth Managers Stephen Erken ∙ Maxele Advisors
Wealth Managers.
771 Richmond wealth managers were ∙ 314-961-1850
Michael Cice ∙ Allied Financial
Laura Raulinaitis ∙ Morgan Stanley considered for the award; 93 (12 percent
Consultants ∙ 215-497-8368 of candidates) were named 2017 Five Star Troy R. Hedman ∙ Visionary Wealth
∙ 626-304-2457
Christopher Clavin ∙ Wells Fargo Wealth Managers. Advisors ∙ 636-346-9045
Advisors ∙ 610-648-8908
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who
successfully complete CFP Board’s initial and ongoing certification requirements. The Chartered Financial Consultant credential [ChFC®] is a financial planning designation awarded by The American College.
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EVEN MORE.” —GEERT HOFSTEDE
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AND NO MAN however, implies that great sleep—he rests. The
EVER WILL.” men are not needed.” boss is never late—
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work—his presence
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ME. I’D DO IT
GREAT OFFENSES TO REST.” elsewhere.”
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MY BOSSES.” CARRY ON, JEEVES, BY P.G. WODEHOUSE; THE TIMES BOOK OF QUOTATIONS; THE
PRINCIPLES OF SCIENTIFIC MANAGEMENT, BY FREDERICK WINSLOW TAYLOR; STEVE JOBS:
—CHICK HEARN HIS OWN WORDS AND WISDOM; CULTURES AND ORGANIZATIONS, BY GEERT HOFSTEDE.

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