(Bloomberg) — Stripe Inc. plans to make a one-time payment of $20,000 to employees who opt to move out of San Francisco, New York or Seattle, but also cut their base salary by as much as 10%, according to a person familiar with the matter.
The payments processor will make the offer available to workers who choose to relocate before the end of the year, said the person, who asked to remain anonymous to discuss private details. But employees opting to move may have to relinquish some of their base pay.
The new policy adds Stripe to the list of technology companies that have expanded opportunities for employees to work remotely while also signaling they may implement pay cuts if workers move to less-expensive cities. VMware Inc. told Bloomberg News on Friday it had instituted such a policy, and Facebook Inc., Twitter Inc. and ServiceNow Inc. have all considered similar measures.
Mike Manning, a spokesman for Stripe, declined to comment.
For many Americans, the Covid-19 crisis has upended the cost-benefit balance of living in expensive metropolitan areas, which for months have been devoid of their usual flair. With corporate campuses and office buildings still closed or only partially staffed, many companies have given workers more leeway than ever to decide where and how they want to work. That’s led scores of white-collar workers to move closer to loved ones or to more sparsely populated areas with less punishing living costs.
Pay cuts and a lesser need for pricey office space offer companies ways to save money. But a migration of workers from downtown headquarters also pose challenges for bosses who worry that remote work over the long term could stifle innovation or hamper productivity. It will also be financially challenging for coastal hubs that have long attracted large companies and their highly paid employees.
Also read: Dimon Sees Lasting Damage If Workers Don’t Return to Offices
For tax reasons, companies must know where employees reside, but any decisions to cut pay is at their discretion.
San Francisco-based Stripe, which employs around 2,800 people, has for years relied on remote work. Last year it formed a remote engineering hub in addition to its hubs in the Bay area, Seattle, Dublin and Singapore, and vowed to hire 100 new fully remote engineers and other staff.
Doing so has brought its workers closer to customers and businesses, and tailor products to fit local needs and limitations, Jay Shirley, who is the site lead for Stripe’s remote engineering hub, wrote in a May blog post.
The company was valued at $36 billion in it latest funding round, making it one of the country’s most valuable closely held startups.
The San Francisco Bay area had the highest prices for goods and services, including rent, among large metropolitan areas in the country in 2018, according to data from the U.S. Bureau of Economic Analysis. New York was in second place. Among areas of all sizes, the California cities of San Jose, Sunnyvale and Santa Clara, in the heart of Silicon Valley, had the nation’s highest rents.
In a recent poll on Blind, a professional network where users can remain anonymous, 49% of the 5,900 respondents said a relocation shouldn’t prompt a pay cut as long as they’re doing the same work. About 44% said they were willing to make that trade, with the remainder saying they were indifferent.
(Updates with Blind survey in final paragraph.)
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Parents knowingly sent kids with coronavirus to school, Wisconsin officials say
Parents are knowingly sending their children who have coronavirus back to classes in Wisconsin, health officials said on Thursday, which could lead to potential school district shutdowns.
“The health department has worked with school districts since spring to make a plan to reopen,” Kirsten Johnson, Washington-Ozaukee public health director, told NBC News. “Never in a million years did we imagine or think to account for parents deliberately sending their sick or symptomatic child to school.”
In Washington and Ozaukee counties, which sit right above Milwaukee, there is a patchwork of fall reopening plans. Johnson said that while many schools offered students the option to go to school five days a week, all of them have been “proactive” in implementing preventative measures like staggered start times, reduced classroom capacity, and required face coverings.
More than two dozen schools in the counties are under investigation where at least one student or staff member has tested positive for Covid-19, according to the Washington-Ozaukee Public Health Department’s dashboard. Out of the 15 school districts, 11 are currently under investigation.
There has been at least one positive or suspected case in all school districts, according to Johnson.
Wisconsin, which has recorded 1,268 deaths, isn’t the first state facing difficulties with parents refusing to follow public health protocols. Connecticut has already sent some school districts back home due to outbreaks. A high school student in Massachusetts tested positive for Covid-19 on Sunday, forcing all students and staff in the positive individual’s classes to quarantine for the next 14 days.
Health officials are advising parents not to send their children to school if they’re sick or showing symptoms, and for schools to continue using attendance tracking software to tally students who test positive for the virus.
Johnson said that the counties would hire more contact tracers and consider advising schools to close their doors if there is an upward trend in cases.
“The human behavior aspect of sending sick and positive children to school is not something we can control, and we never accounted for people completely disregarding basic health guidance,” Johnson said. “We have no tools left, and we just want everyone to be safe.”
“A handful of irresponsible parents could be responsible for closing down entire school districts,” she said.
Dollar’s recent direction points to Biden win
3 ‘Strong Buy’ Stocks With Over 7% Dividend Yield
Markets are volatile, there can be no doubt. So far this month, the S&P 500 has fallen 9% from its peak. The tech-heavy NASDAQ, which had led the gainers all summer, is now leading the on the fall, having lost 11% since September 2. The three-week tumble has investors worried that we may be on the brink of another bear market.The headwinds are strong. The usual September swoon, the upcoming election, doubts about another round of economic stimulus – all are putting downward pressure on the stock markets.Which doesn’t mean that there are no opportunities. As the old saw goes, “Bulls and bears can both make money, while the pigs get slaughtered.” A falling market may worry investors, but a smart strategy can prevent the portfolio from losing too much long-term value while maintaining a steady income. Dividend stocks, which feed into the income stream, can be a key part of such a strategy.Using the data available in the TipRanks database, we’ve pulled up three stocks with high yields – from 7% to 11%, or up to 6 times the average dividend found on the S&P 500 index. Even better, these stocks are seen as Strong Buys by Wall Street’s analysts. Let’s find out why.Williams Companies (WMB)We start with Williams Companies, an Oklahoma-based energy company. Williams controls pipelines connecting Rocky Mountain natural gas fields with the Pacific Northwest region, and Appalachian and Texan fields with users in the Northeast and transport terminals on the Gulf Coast. The company’s primary operations are the processing and transport of natural gas, with additional ops in crude oil and energy generation. Williams handles nearly one-third of all US commercial and residential natural gas use.The essential nature of Williams’ business – really, modern society simply cannot get along without reliable energy sources – has insulated the company from some of the economic turndown in 1H20. Quarterly revenues slid from $2.1 billion at the end of last year to $1.9 billion in Q1 and $1.7 billion in Q2. EPS in the first half was 26 cents for Q1 and 25 cents for Q2 – but this was consistent with EPS results for the previous three quarters. The generally sound financial base supported the company’s reliable dividend. Williams has been raising that payment for the past four years, and even the corona crisis could not derail it. At 40 cents per common share, the dividend annualizes to $1.60 and yields an impressive 7.7%. The next payment is scheduled for September 28.Truist analyst Tristan Richardson sees Williams as one of the midstream sector’s best positioned companies.“We continue to look to WMB as a defensive component of midstream and favor its 2H prospects as broader midstream grasps at recovery… Beyond 2020 we see the value proposition as a stable footprint with free cash flow generation even in the current environment. We also see room for incremental leverage reduction throughout our forecast period on scaled back capital plans and even with the stable dividend. We look for modestly lower capex in 2021, however unlike more G&P oriented midstream firms, we see a project backlog in downstream that should support very modest growth,” Richardson noted.Accordingly, Richardson rates WMB shares as a Buy, and his $26 price target implies a 30% upside potential from current levels. (To watch Richardson’s track record, click here)Overall, the Strong Buy analyst consensus rating on WMB is based on 11 Buy reviews against just a single Hold. The stock’s current share price is $19.91 and the average price target is $24.58, making the one-year upside potential 23%. (See WMB stock analysis on TipRanks)Magellan Midstream (MMP)The second stock on our list is another midstream energy company, Magellan. This is another Oklahoma-based firm, with a network of assets across much of the US from the Rocky Mountains to the Mississippi Valley, and into the Southeast. Magellan’s network transports crude oil and refined products, and includes Gulf Coast export shipping terminals.Magellan’s total revenues rose sequentially to $782.8 in Q1, and EPS came in at $1.28, well above the forecast. These numbers turned down drastically in Q2, as revenue fell to $460.4 million and EPS collapsed to 65 cents. The outlook for Q3 predicts a modest recovery, with EPS forecast at 85 cents. The company strengthened its position in the second quarter with an issue of 10-year senior notes, totaling $500 million, at 3.25%. This reduced the company’s debt service payments, and shored up liquidity, making possible the maintenance of the dividend.The dividend was kept steady at $1.0275 per common share quarterly. Annualized, this comes to $4.11, a good absolute return, and gives a yield of 11.1%, giving MMP a far higher return than Treasury bonds or the average S&P-listed stock.Well Fargo analyst Praneeth Satish believes that MMP has strong prospects for recovery. “[We] view near-term weakness in refined products demand as temporary and recovering. In the interim, MMP remains well positioned given its strong balance sheet and liquidity position, and ratable cash flow stream…” Satish goes on to note that the dividend appears secure for the near-term: “The company plans to maintain the current quarterly distribution for the rest of the year.”In line with this generally upbeat outlook, Satish gives MMP an Overweight (i.e. Buy) rating, and a $54 price target that implies 57% growth in the coming year. (To watch Satish’s track record, click here)Net net, MMP shares have a unanimous Strong Buy analyst consensus rating, a show of confidence by Wall Street’s analyst corps. The stock is selling for $33.44, and the average price target of $51.13 implies 53% growth in the year ahead. (See MMP stock analysis on TipRanks)Ready Capital Corporation (RC)The second stock on our list is a real estate investment trust. No surprise finding one of these in a list of strong dividend payers – REITs have long been known for their high dividend payments. Ready Capital, which focuses on the commercial mortgage niche of the REIT sector, has a portfolio of loans in real estate securities and multi-family dwellings. RC has provided more than $3 billion in capital to its loan customers.In the first quarter of this year, when the coronavirus hit, the economy turned south, and business came to a standstill, Ready Capital took a heavy blow. Revenues fell by 58%, and Q1 EPS came in at just one penny. Things turned around in Q2, however, after the company took measures – including increasing liquidity, reducing liabilities, and increasing involvement in government-sponsored lending – to shore up business. Revenues rose to $87 million and EPS rebounded to 70 cents.In the wake of the strong Q2 results, RC also started restoring its dividend. In Q1 the company had slashed the payment from 40 cents to 25 cents; in the most recent declaration, for an October 30 payment, the new dividend is set at 30 cents per share. This annualizes to $1.20 and gives a strong yield of 9.9%.Crispin Love, writing from Piper Sandler, notes the company’s success in getting back on track.“Given low interest rates, Ready Capital had a record $1.2B in residential mortgage originations versus our $1.1B estimate. Gain on sale margins were also at record levels. We are calculating gain on sale margins of 3.7%, up from 2.4% in 1Q20,” Love wrote.In a separate note, written after the dividend declaration, Love added, “We believe that the Board’s actions show an increased confidence for the company to get back to its pre-pandemic $0.40 dividend. In recent earnings calls, management has commented that its goal is to get back to stabilized earnings above $0.40, which would support a dividend more in-line with pre-pandemic levels.”To this end, Love rates RC an Overweight (i.e. Buy) along with a $12 price target, suggesting an upside of 14%. (To watch Love’s track record, click here)All in all, Ready Capital has a unanimous Strong Buy analyst consensus rating, based on 4 recent positive reviews. The stock has an average price target of $11.50, which gives a 9% upside from the current share price of $10.51. (See RC stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
U.S. House Democrats crafting new $2.2 trillion COVID-19 relief package
By David Morgan
WASHINGTON (Reuters) – Democrats in the U.S. House of Representatives are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week, a key lawmaker said on Thursday, as House Speaker Nancy Pelosi reiterated that she is ready to negotiate with the White House.
With formal COVID-19 relief talks stalled for nearly seven weeks, House Ways and Means Committee Chairman Richard Neal said new legislative efforts got under way this week after Federal Reserve Chairman Jerome Powell said in congressional testimony that lawmakers needed to provide further support for an economy reeling from the pandemic.
“The contours are already there. I think now it’s about time frame and things like that,” Neal told reporters when asked about the potential for new legislation.
He predicted a vote could come within days. “I assume, since the House is scheduled to break for the election cycle, then I think next week’s … appropriate,” said Neal, adding that Pelosi would determine when a legislative package might be introduced.
Related: U.S. House passes bill to avoid government shutdown
House Republican leader Kevin McCarthy dismissed the new initiative as partisan. Pelosi also faces pressure from moderate House Democrats who say they want to see bipartisan aid proposals that have a chance of becoming law.
“If it’s a messaging exercise, it’s worthless,” Representative Dean Phillips, a freshman Democrat from Minnesota, told CNN. He said the effort risked looking like Senate Republicans who had unsuccessfully pushed their own partisan coronavirus aid bill.
“Many of us are getting sick of that,” Phillips said.
Stocks reacting positively to the announcements from Congress, with the S&P reaching a session high shortly after, before paring some gains.
Formal talks between Pelosi, Senate Democratic leader Chuck Schumer, Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows broke down without a deal on Aug. 7, with the two sides far apart. Pelosi and Mnuchin have since spoken by phone.
“We’re ready for negotiation,” Pelosi told reporters on Thursday, saying she had last spoken to Mnuchin on Wednesday.
Pelosi and Schumer, who initially sought a $3.4 trillion relief package, have since scaled back their demands to $2.2 trillion. Neal said a new legislative package would be somewhere near $2.2 trillion. Some media reports said it could be $2.4 trillion.
But it was not clear whether the White House would agree to such a sum. Meadows has said that Trump would be willing to sign a $1.3 trillion relief package.
Meanwhile, Senate Republicans, who have not been involved directly in the negotiations, initially proposed a $1 trillion bill, which was rejected by many Republicans who thought it too large and by Senate Democrats who said it was too small.
Senate Republicans later tried and failed to bring a smaller $300 billion bill to the floor.
(Reporting by David Morgan and Susan Cornwell; Editing by Chizu Nomiyama and Daniel Wallis)
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