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Who Gets Promoted to the C-Suite—and How That Has Changed Over the Decades

Here’s the face of the new C-suite: older, with broader industry experience and increasingly female.

These are some of the most surprising findings my colleagues and I have uncovered about how C-suite leaders have changed over time. My co-researchers—Rocio Bonet and Monika Hamori—and I have been tracking the attributes of the leaders of the world’s biggest corporations, the Fortune 100, since 1980, when many of the key forces shaping business today began.

The findings, in some cases, seem to be at odds with each other. That is because many factors are pulling the business world in different directions. For instance, executives change jobs a lot more than in the past and don’t stick with one employer or industry for their entire careers. On the other hand, C-suite executives do less job hopping later in their careers after moving around a lot early on. In many ways, there is more stability in the corporate world now than we would ever imagine from the tales of intrigue within individual executive suites.

Here is a closer look at our key findings

  • The youth movement is over. Our study—which will appear in the California Management Review—found that C-suite executives are getting older. It’s a reversal of a long trend: Executives were getting younger after 1980—with the average age falling six years to 51 in 2001—but now the top leaders are back to where they were in 1980: 57 years old on average.
  • Executives are doing more job hopping. The number of different companies where executives worked, including their current job, rose each decade—to 3.3 in 2021 from 2.2 in 1980, a 50% rise. Likewise, the number of years the executives worked elsewhere before joining their current company jumped by a third, to 15 years, over that same period. As a result, more outsiders are being hired directly into executive roles. In 1980, 9% of C-suite executives fit that bill. In 2021, 26% did.
  • Executives are less likely to be lifers. The percentage of executives who spent their whole careers at one company dropped in every period in our data, especially between 2011 and 2021. Now just under 20% of executives are lifers, less than half the level in 1980 and about the same as in 1900. There is a big exception to that finding, though: legacy companies. These 17 companies—which have been in the Fortune 100 since 1980—have more than twice the percentage of lifers as the others.
  • Eventually, executives do settle down. While executives may move around more early in their careers, when they do settle on a job, they stay there longer. Average tenure in executive roles is now back up to where it was in 1980, close to four years, after falling to two years in 2001. This may have to do with tech companies: As the industry has matured, it has become more stable. (At legacy companies, though, average tenure has dipped to three years from four.)
  • They have broader experience. Executives used to get training in-house in various aspects of the business: operations, finance, logistics and so forth. It was a way for companies to train potential leaders from within, especially important since there weren’t a lot of outside hires for executive roles. Now companies are seeking people from outside who have experience in different niches, and putting them in roles that fill those niches. In 1980, the average top executive had worked in 1.4 different industries. Now that figure is 2.3.
  • Legacy companies aren’t exempt from big changes. The C-suite at legacy companies looks more traditional—that is, more like 1980—than it does at other companies. Even so, these older corporations have seen some big changes.
    First off, let’s look at the traditional side. Not only do legacy C-suites have a higher percentage of lifers, these executives get more training in-house and have less experience in other industries. At the same time, though, legacy executives have been affected by some trends that make them look different than in 1980. The executives have less tenure, as we have seen, and outsiders hired directly into executive roles went to 18% in 2021 from 1% in 1980.
  • More executives come from finance. Financial markets and investor interests took on a greater role after the 1980s, and that change is reflected in the proportion of executives with a finance background: The figure has been above 30% since 2001, up from 19% in 1980.
  • More executives have law degrees. The proportion of executives with a law degree has risen, going to 17% in 2001 from 11% in 1980, and staying near that higher level in 2021. This may be a response to increased corporate regulations like Sarbanes-Oxley and Dodd-Frank that drive the need for more legal expertise in the C-suite.
  • Business degrees aren’t as prevalent as you would think. For years, there was huge growth in M.B.A. graduates in the overall population—63% from 2001 to 2011. But the growth rate of M.B.A.s in Fortune 100 C-suites was considerably lower: just 6%. The period from 2011 to 2021 had even less upward movement. The number of M.B.A.s in the C-suite rose by just 4% over those years, as M.B.A. graduates in general rose by 8% during that time.
  • Ivies are still influential. Even as the growth rate of M.B.A.s goes down overall in the C-suite, the dominance of graduates from Ivy League business schools in the executive ranks remains strong. Ivy League M.B.A. programs represent less than 1% of all such programs in the U.S. Meanwhile, as of 2021, 35% of C-suite executives had M.B.A.s, and 23% of those got the degree in the Ivy League. That’s in the same ballpark as 2001, when 30% of C-Suite executives had M.B.A.s, and 20% of those were from Ivies.
    A couple of factors may be at play: These top jobs have become more attractive for elite graduates as executive pay has soared—and more outside hiring by companies has made it possible for M.B.A.s to make lateral moves that offer a chance at the C-suite. Previously, graduates of those elite programs disproportionately moved into higher-paying investment careers.
  • Women are landing more executive jobs. The proportion of women in Fortune 100 top executive ranks rose from roughly zero in 1980 to 12% in 2001 and 18% in 2011, by about the same percentage as the proportion of women in all management jobs. After that, the proportion of women in these top executive ranks rose to 28% of jobs in 2021—while women executives in the overall ranks of management rose to just 18% of jobs from 17%, according to the Bureau of Labor Statistics. This indicates that it did not take an increase in the pipeline of women managers to add more to the executive suite.
  • Women are also advancing quicker than men. Women executives got to executive jobs faster than their male counterparts—four years faster into their careers in 2001, slowing to 1.5 years faster in 2021.
  • Foreign-born executives have also made gains. Something similar happened with executives from outside the U.S. Until this past decade, the percentage of foreign-born people in top executive ranks—2% in 1980, for instance—had lagged behind the proportion of foreign-born people in the U.S. as a whole. Now, foreign-born people make up 15% of top executive ranks—larger than their proportion in the overall population. This increase, though, doesn’t seem to be associated with any greater globalization of top corporations: Instead, it may reflect an increase in foreign-born students in elite U.S. postgraduate programs.

Peter Cappelli is a professor of management at the Wharton School of the University of Pennsylvania and the author of “Our Least Important Asset: Why the Relentless Focus on Finance and Accounting is Bad for Business and Employees.”

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The $65 Million Perk for CEOs: Personal Use of the Corporate Jet Has Soared

One of the flashiest executive perks has roared back since the onset of the pandemic: free personal travel on the company jet.

Companies in the S&P 500 spent $65 million for executives to use corporate jets for personal travel in 2022, up about 50% from prepandemic levelsthree years earlier, a Wall Street Journal analysis found. Early signs suggest the trend continued last year.

Overall, the number of big companies providing the perk rose about 14% since 2019, to 216 in 2022, figures from executive-data firmEquilar show. The number of executives receiving free flights grew nearly 25%, to 427.

Most companies report executive pay and perks in the spring.

Meta Platforms spent $6.6 million in 2022 on personal flights for Chief Executive Mark Zuckerberg and his then-lieutenant, Sheryl Sandberg—up about 55% from 2019, the Journal found. Casino company Las Vegas Sands spent $3.2 million on flights for four executives, more than double its annual expense in any year since 2015. Exelon, which owns Chicago’s Commonwealth Edison utility, more than tripled its spending on the perk since 2019.

Company jets have long symbolised corporate success and, to critics, excess. Companies typically say flying corporate is safer, healthier and more efficient. Some companies—including Cardinal Health, Raymond James Financial and Hormel Foods—added or expanded the perk in 2020 or 2021, citing pandemic health and safety concerns. Most spending growth came at companies already paying for personal flights in 2019.

Palo Alto Networks began subsidising personal flights for CEO Nikesh Arora in the year ended July 2022, spending about $650,000. That total rose to $1.8 million in its most recent fiscal year, plus a further $286,000 to cover his tax bill for the perk, the cybersecurity company said in an October securities filing.

The company said in filings that its board requires Arora to fly corporate in response to a security consultant’s report. “There was a bona fide, business-related security concern for Mr. Arora and credible threat actors existed with both the willingness and resources necessary for conducting an attack on Mr. Arora,” it said.

Companies report spending on flights they can’t classify as business-related, including trips to board meetings for other companies or commuting from distant residences. Some give executives a fixed personal-flight allowance in hours or dollars, and require reimbursement beyond that.

The sums have little financial impact on most giant corporations, even when annual flight bills exceed a million dollars. Critics say the free flights indicate directors too eager to please top executives.

“The vast majority of S&P 500 companies do not offer this perk,” said Rosanna Landis Weaver, an executive-pay analyst at As You Sow, a nonprofit shareholder-advocacy group that has produced annual lists of CEOs it considers overpaid.

The Journal’s analysis reflects what companies disclose in securities filings, typically in footnotes to annual proxy statements. Federal rules generally require companies to itemize the perk for each top executive if it costs the company $25,000 or more in a year.

PepsiCo spent $776,000 on personal flights for five executives in 2022, double what it paid for the perk in 2019. Two-thirds of the spending subsidized flights by CEO Ramon Laguarta, who is required to use company aircraft for personal flights for safety and efficiency reasons. In an interview last spring, Laguarta said he sometimes ended business trips to Europe by flying to visit his mother in his native Barcelona. She died later in the year, in her 90s.

A PepsiCo spokesman said the company jet allows executives to reach remote facilities.

Personal jet use can draw investor and regulatory scrutiny. It contributed to the ouster of Credit Suisse’s chairman in 2022.

In June, tool maker Stanley Black & Decker settled Securities and Exchange Commission charges that it failed to disclose $1.3 million in perks for four executives and a director, mostly their use of company aircraft, from 2017 through 2020. In 2020, Hilton Worldwide Holdings settled SEC charges that it didn’t disclose $1.7 million in perks over four years, in part by underreporting costs for CEO Christopher Nassetta’s personal flights by 87%in two of those years. Hilton paid a $600,000 penalty.

Both companies settled without admitting or denying wrongdoing.

Stanley Black & Decker said it raised the errors with the SEC and settled without a fine. In 2022, Stanley Black & Decker reported spending nearly $143,500 on personal flights for former CEO James Loree and his successor, Donald Allan Jr., primarily to fly to outside board meetings or from second homes to work.

Hilton cited higher fuel prices in reporting about $500,000 in flights for Nassetta in 2022.

Spending on executives’ personal travel outpaced overall growth in business-jet traffic. Takeoffs and landings are up by about 19% since 2019, after dropping sharply in 2020, Federal Aviation Administration data show. Corporate spending on the perk rose 52%, the Journal found.

Higher fuel costs in 2022 contributed to the increase in spending, and there is little indication of a slowdown last year. Of the 15 S&P 500 companies that have reported spending on the perk in fiscal years ended in the second half of 2023, 10 said they increased spending, including three that didn’t report the perk a year earlier, securities filings show.

Sixteen companies that started paying for personal flights during the pandemic have since stopped. An additional 31 continued spending into 2022, with a median of $124,000. Accenture, Palo Alto Networks and concert promoter Live Nation Entertainment reported spending more than $500,000 apiece.

In 2020, Julie Sweet’s first full year as CEO, Accenture capped annual spending for her personal flights at $200,000, then doubled it the next year. Accenture raised the cap to $600,000 in its year that ended Aug. 31, when it spent about $575,000 on Sweet’s personal flights, the company said in a December securities filing.

In its filings, Accenture said it encourages Sweet to use company aircraft for personal travel, citing a security study the company commissioned.

Companies that provided the perk already in 2019 accounted for most of the recent growth in spending, the Journal found.

Meta, for example, spent nearly $11 million on Zuckerberg and Sandberg’s personal flights from 2015 through 2019, and a further $13.3 million over the next three years. Zuckerberg’s company-paid travel included trips on an aircraft he owns, which Meta charters for business, paying $523,000 in 2022. The Facebook owner stopped paying for Sandberg’s personal flights when she stepped down as a company employee in September 2022. She remains on Meta’s board.

Spokesmen for Meta and Sandberg declined to comment beyond Meta’s securities disclosures.

CEOs incurred most of the personal flight spending, making up half the executives receiving the perk in 2022 and two-thirds of the overall cost, Equilar’s data show.

At some companies, other executives are making up a bigger share of the cost. Four Norfolk Southern executive vice presidents accounted for just over half its roughly $370,000 in spending on personal flights in 2022, securities filings show. CEO Alan Shaw accounted for the rest. By contrast, the railroad reported subsidising flights only for then-CEO James Squires in the five years through 2020.

Shaw may take as many as 60 hours of personal flights on company aircraft before reimbursing Norfolk Southern, the company said in its filings. Personal use of company aircraft by executives other than the CEO was infrequent, it added. Norfolk Southern didn’t respond to requests for comment.

—Jennifer Maloney contributed to this article.

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The top interior design mistakes to avoid this year

The days of white-on-white walls are fast disappearing, as we seek comfort and relaxation at home through a warm palette of colour and texture. But how to navigate the myriad options? Starting with where we get it wrong, Julia Green of Greenhouse Interiors sets the new rules for decorating through colour, calm and a little playfulness thrown in.

Using hero colours in isolation

Julia: A common mistake I see people make is not cohesively implementing their chosen hero colour throughout the space. Look at ways to unify hero colours so they aren’t standing alone without company, instead ensuring these hues are weaved through decorative objects and furniture. The most successful designs I have seen have managed to weave colour cohesively through their home like a well-made tapestry. The more subtle the tie-in is, the better!

Designer Julia Green of Greenhouse interiors used the Dulux Journey palette to breathe life into a sterile living space with warm pink tones punctuated by notes of deep plum in accessories.
BEFORE: The living space was in good order but lacked signs of life.

Using only neutral colours

Homeowners often select a neutral shade on their walls and stick to white for their ceilings and trims. The downside of this is that contrast trims on walls and ceilings can draw your eye from top to bottom, rather than allowing the eye to wander seamlessly. Instead, consider painting walls, trims and even ceilings in a single colour, to make the space feel more cohesive. That being said, contrasting pops of colour add balance which is equally important to the look and feel of any space. So, to avoid that floating feeling, ensure your room has an element of grounding through the addition of accent shades from your colour scheme through soft furnishings, textures, florals or artwork as an alternative to doors, ceilings or trims.

Julia’s most recent project used the colour, Dulux Lilac Light from the Dulux Colour Forecast 2024 Journey palette, on the walls, ceilings and trims.

Incorporating colour all at once

Another mistake people make is rushing to add colour throughout their home. Don’t feel pressured to do it all at once, start small and make measured, staggered choices. For a recent makeover I worked on in the Bellarine Peninsula, the walls were painted first in a neutral, greyed off pink shade – Dulux Lilac Light, from the 2024 Dulux Colour Forecast Journey palette – before any other choices were made. The clients lived with that for a few weeks to see how the light interacted with the colour throughout the day, before we approached the rest of the space and introduced bolder pops of colour from the palette to add layering and interest.

Designer Julia Grreen from Greenhouse Interiors says colour and pattern are key to creating inviting spaces.

Forgetting about mood

Colours evoke different moods, so it’s important to consider the look and feel you want to create in the space before landing on your hero colour. For example, I always opt for a calmer palette for the bedroom, as it is a place of rest. A living room on the other hand is where you spend much of your waking hours, so it’s good to liven it up! Pale pink is known for its calming effect – it’s gentle, easy to live with and can add warmth to a space, compared to an austere white shade. It’s also extremely versatile. The emotion it evokes can change completely depending on how it’s styled, which is why it’s a shade I like not only for living areas but also bedrooms.

The wooden dining table has been finished in Dulux Swedish Blue.

Selecting the wrong colour

Most homeowners are apprehensive of colour or they have concerns that colour may make their home feel too bold, which is why choosing the right colour is such a critical step in the design process. Incorporating colour is such an amazing opportunity to inject your own personality and story into the home, so I encourage it wherever possible. My biggest tip is to start with a neutral shade, to create a safe base that easily allows for the introduction of other colour and styling changes over time. If you’re new to using colour in your home, start small and make measured choices. Try living with colour, even if it’s a referenced cushion or decor object. The best thing about the 2024 Dulux Colour Forecast palettes is that all of the hard work is done for you. Their carefully considered palettes are designed to take the brain strain out of companion colours that work well, so when all else fails, look to the experts who have done the hard work for you – it’s foolproof.

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The ‘single biggest factor’ driving the rise in first homebuyer activity for Australians

The number of new loans being issued to the most budget-conscious cohort of buyers in the property market – first-time purchasers – has increased by 20 percent over the past 12 months, according to new data from the Australian Bureau of Statistics (ABS). Almost 10,400 new loans were written for first home buyers in November, 31 percent of them in Victoria, 23 percent in New South Wales and 19 percent in Queensland.

Despite the common affordability challenges faced by younger Australians, lending to first homebuyers is currently tracking at 29.4 percent of all new owner-occupier finance, which is above the 10-year average of 24.3percent. The value of all owner-occupier loans rose by 0.5 percent in November to $17.86 billion, up 10.6 percent over the past 12 months. The value of investor loans rose by 1.9 percent to $9.72 billion, which is 18 percent higher than a year ago. But the boost to first homebuyer finance is much bigger, up 2.8 percent in November to $5.25 billion, but more significantly, it’s up 25.8 percent compared to a year ago.

The ABS points out that a large component of November’s increase in first home buyer finance was due to a surge in Queensland. This coincides with a doubling of the state’s First Home Owner Grant to $30,000 for eligible first home buyers purchasing or building a new home. The grant is the equal highest state grant available to young buyers and triple the size of grants available in New South Wales and Victoria.

There are two key factors underpinning rising first home buyer activity, despite today’s high interest rates. The first and most significant is the growing impact of the Bank of Mum and Dad, with parents typically getting involved at the start of the process. They are either gifting cash to help fund the deposit, offering rent-free accommodation to their children throughout their 20s so they can save a deposit themselves, or going guarantor on their loans.

Research published last year by the Australian Housing and Urban Research Institute (AHURI) found parental help has “become one of the key enablers of the transition into home ownership”. According to AHURI’s findings: “Parental transfers, both direct and in-kind, are increasingly assisting individuals make a more rapid transition into home ownership. Analysis identified that in-kind transfers in the form of co-residence with parents (and not renting) lifts the likelihood of transitioning into home ownership by 40 percent.”

AHURI says first homebuyers’ ability to save a deposit using their earnings alone had diminished over time as property values – and thus the required deposit amounts – have risen. According to PEXA data, buyers in NSW needed a median deposit of just below $120,000 to buy a home in FY23, up 3.9 percent on FY22. In Victoria, the median deposit was $84,723, down 0.5 percent, and in Queensland it was $78,143, up 8.5 percent.

AHURI said family support “was found to be the single biggest factor in supporting being able to buy a home”. In Australia’s most expensive market, Sydney, where the median house price is currently $1.4 million and the median apartment value is above $830,000, according to the latest CoreLogic figures, AHURI says family support “was an essential component of being able to buy a home in all cases …”.

The second factor boosting first home buying today is higher uptake of the Federal Government’s expanded Home Guarantee Scheme, which enables eligible buyers to qualify for a loan with just a 5 percent deposit and a government guarantee on the rest, saving them thousands of dollars in mortgage insurance.

Housing Australia says one in three of all first home buyers in FY23 used the scheme, up from one in seven in FY22. This reflects the expansion of the scheme, with more places funded by the Albanese Government and broader eligibility criteria enabling more people to participate.

Higher interest rates have also encouraged more participation, says Housing Australia’s head of research, data and analytics, Hugh Hartigan.

“The broader macroeconomic environment with rapidly rising interest rates has substantially decreased mortgage serviceability with flow-on effects for affordability and this has led to first home buyers relying more heavily (proportionally) on the scheme than in previous years,” Mr Hartigan said.

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Crash Parties, Escape Dull Chitchat and Make Powerful Friends: What Davos Elites Know

For a master class in power networking, it’s tough to beat the one taking place in the Swiss Alps this week.

The annual World Economic Forum brings the planet’s power brokers together for morning-to-past-midnight meetings over coffee, cocktails and fondue. For the thousands of CEOs, billionaires, intellectuals and world leaders descending on Davos, the setting is unrivalLed in its potential to spark relationships, dealmaking and big ideas for the year ahead. After all, there are few other places where you can run into Al Gore at the hotel bar and wait next to Bill Gates to pass through the metal detectors.

MaximiSing all that powerful proximity and turning it into actual connections takes skill, chutzpah and the ability to think on your feet. What to do if you spot Sting in the elevator? How to know whether a tête-à-tête merits more than a minute of your time? And how do you divine someone’s importance without peering at the badge dangling at their midsection?

The tricks of Davos movers and shakers can apply to any business gathering or cocktail party, regardless of your VIP status. Here’s how they do it.

Names and spaces

For Salesforce Chief Executive Marc Benioff, getting the most out of the high-powered gathering often comes down to location—in this case, the top of a staircase in the Davos Congress Center, the main hub of the event.

The Davos regular said he plans to spend an hour each day of the forum perched there or in an adjacent hallway. Why? In a single hour—amid a packed calendar of meetings, lunches, dinners and other engagements—he might see 100 people he would otherwise not encounter all year.

“The amount of serendipity that happens is unlike anything I’ve ever experienced,” said Benioff, who has attended the forum for two decades and hosts parties and gatherings that people vie all week to get into. “It’s an incredible thing.”

Benioff has a hack for dealing with a common conundrum in Davos and beyond—forgetting your conversation partner’s name. The Salesforce chief said he sometimes takes photos of their badges if he isn’t able to take notes. If he exchanges contact information with someone, he gives his cellphone number or email and recommends they text, email or tweet at him.

“I’m generous with my contact information,” he said. (At least one reporter can attest to that.)

Or, simply ask the person to repeat their name, said Alisa Cohn, an executive coach and author attending her third Davos. She phrases the question with a touch of humoUr, asking: “‘Listen, this has been a great conversation, and I’ve already forgotten your name. Can you remind me?’”

Few people respond poorly, she said. “The truth is, they will ask you the same question because they forgot your name, too.”

Big deal, or big whoop?

Seated next to an unfamiliar guest at a dinner or lunch, several CEOs said they weren’t above stealth under-the-table googling, surreptitiously reading up on their Davos dining companions to make better conversation or to understand what, exactly, it is that they do.

When introducing herself to someone new, Cohn gives people conversational “hooks” to latch on to. For her, that means explaining she is also an angel investor, based in New York, and a fitness fanatic with a love of kettlebells. The icebreaker often spurs people to detail their own fitness routines.

True Davos experts know how to escape a long, dull or—horrors!—low-status conversation partner. Nick Studer, head of consulting firm Oliver Wyman Group and a longtime Davos attendee, believes there is value in all sorts of conversations. But he has perfected the art of extraction with a favoUrite line: “Anyways, it’s obviously fantastic [chatting]. I mustn’t keep you from your guests.”

Most people follow his lead, he said, “as long as you wrap it up appropriately and politely.”

No ‘Windexing’

One big Davos no-no is what the finance executive Anthony Scaramucci has come to describe as “Windexing.”

Say you are chatting with someone interesting, but notice out of the corner of your eye that the British prime minister or a well-known billionaire-entrepreneur walks into a room. You might suddenly feel the urge to move on, and look past the person you are talking to “like he’s a sheet of glass,” Scaramucci said. “Don’t be that person.”

Instead, apologiSe for needing to end the conversation, he said, and offer to circle back if there is time.

Scaramucci, founder of the hedge-fund investment firm SkyBridge Capital and, very briefly, communications director for the Trump administration, started jetting to Davos in 2007.

He hosts a popular and well-attended wine night there each year. Over time, he has learned a tactic for getting into a must-attend party—even when he isn’t invited.

“I crash every single party that I can possibly crash,” Scaramucci said.

Several years ago, at a party held by a Russian oligarch, a security guard stopped Scaramucci because he wasn’t on the list. Scaramucci says he didn’t blink. Instead, he disarmed.

“I said, ‘I know I’m not on the list. I’m Vince Vaughn from ‘Wedding Crashers,’” he recalled. “Five minutes later, I was eating the caviar and drinking the vodka.”

When Scaramucci spots a mega luminary he is dying to meet, he tries to be authentic. He said he developed a friendship with David Rubenstein, co-founder of the private-equity giant Carlyle Group, by introducing himself in Davos years ago.

“I just walked over to him. I said, ‘Hey, listen, I watched you on TV, I’ve seen your interviews and I’m a great admirer of yours,’” Scaramucci said. “People are incredibly nice. Don’t make the mistake of thinking they don’t want to meet you.”

Tight timing

At major conclaves like Davos, Scaramucci and others said it is important to realise you can’t do it all. Prioritisation is key.

Denelle Dixon, who runs the nonprofit Stellar Development Foundation, said her organisation sets a theme for the conference so executives can take meetings with government officials and others around that sharp topic. This year, it is blockchain’s role in expanding access to the financial system. (Davos loves a buzzword.) “It allows us to really focus,” she said.

Saying no is essential. Salesforce’s Benioff and his team usually meet with roughly half of the 600 CEOs attending Davos. But a request for five or 15 minutes of his time is likely to fail if the person isn’t a critical customer or somebody he already knows well.

“It’s not going to get part of my time,” he said. “Maybe it’ll get part of somebody else’s time.”

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Shoppers Prefer Staying Outdoors. That’s More Trouble for Malls.

National chains are accelerating their exit from malls for other types of retail locations, signalling more trouble for malls as consumers show a growing preference for shorter, more convenient shopping experiences.

Jewellers, shoe stores and other specialty retailers are among the operators making the shift, indicating they will continue opening at outdoor, non-mall locations such as grocery-anchored shopping centres and strip malls after finding that they perform better and typically save on costs.

“These retailers are going to grow more confident that they’re barking up the right tree as they continue to see quarter after quarter after quarter of outperformance in their off-mall locations,” said Brandon Svec, national director of U.S. retail analytics for data firm CoStar Group.

Bath & Body Works, which for years sold scented soaps and body creams to mall goers, is on track to open about 95 new locations for the fiscal year ending in February, while closing about 50, primarily in struggling malls. More than half of its 1,840 stores in the U.S. and Canada are now located outside of enclosed shopping centres.

Foot Locker said it is aiming to operate half of its North American square footage outside enclosed shopping centres by 2026, up from 36% in the third quarter.

Signet Jewelers, which owns brands such as Kay Jewelers, Zales and Jared, is closing up to 150 locations in the U.S. and U.K. by mid-2024, nearly all in traditional malls. Company executives told investors last year that off-mall locations had stronger sales margins, and about 60% of its total square footage is now outside malls.

Not all retailers are exiting from malls. Publicly traded mall owners Simon Property Group and Macerich, which primarily own higher-end centres, have reported record-high leasing volume over the past year as retailers such as Hermès, Warby Parker and Alo Yoga have taken space.

But foot traffic to U.S. malls was down 4% on average in 2023 from the prior year, and about 12% lower than 2019 levels, according to real-estate data firm Green Street.

Low-end malls have seen the biggest drops in customer visits, partially because department stores have closed in higher numbers at these properties since 2017.

Online-sales data have also helped retailers pinpoint locations for successful stores with better accuracy than in the past.

“You know where your customer is buying and where they live,” said Scott Lipesky, chief financial and operating officer for Abercrombie & Fitch. “We’re looking at this digital shipping data, and we just plop a store down in the middle of it.”

Recently, Abercrombie & Fitch has been opening in city shopping districts in an effort to get closer to younger millennials and recent college graduates.

Visits to outdoor shopping centres have increased since the pandemic as the rise in remote work has given people the time and flexibility to run errands more frequently and closer to home.

Outdoor shopping and strip centres also appeal to retailers who are increasingly allowing customers to pick up or return items bought online, CoStar’s Svec said. These shoppers want to get in and out of stores quickly, and not spend time navigating large parking garages or walking across the mall.

Increasing demand for open-air space has driven up shopping-centre rents to nearly $24 a square foot, the highest level since real-estate firm Cushman & Wakefield began tracking the metric in 2007.

But moving out of malls can still help retailers cut costs, particularly the common-area and maintenance charges that landlords pass on to tenants to help pay for the property’s upkeep.

Owners of enclosed malls are saddled with a host of additional expenses compared with open-air shopping centres, such as keeping the indoor walkways clean, repairing the heating and ventilation systems and maintaining the restrooms.

“It’s a lot more than blowing leaves out of a parking lot,” said Jim Taylor, chief executive of Brixmor Property Group, a real-estate investment trust that owns about 365 shopping centres across the U.S.

Taylor said he started to notice traditional-mall tenants moving into Brixmor centres several years ago. More recently, he has seen an increase in the types of retailers making the move, including those in the beauty, footwear, jewellery and housewares business.

“We’re seeing them come into the open-air centres because of the proximity and convenience to the customer,” he said.

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Emmy-Nominated Shows This Year Will Give You Serious House Envy

British royalty, billionaire media moguls and wealthy vacationers filled the screens of this year’s Emmy-nominated TV shows.

We may not covet the characters’ tangled, twisted relationships in “Succession,” which swept the nominations, or the backstabbing (and actual stabbing) in “Only Murders in the Building,” up for best comedy. But their lavish penthouses, castles and beach resorts could certainly stoke some house envy.

Here, Mansion Global highlights some of the real-life lavish homes that set the backdrop to some of this year’s fictional favourites.

“Succession” — 27 Nominations, Including Outstanding Drama Series

If “Succession,” the HBO series that’s high on drama and high-net-worth characters, exudes anything, it’s luxury—and that goes for its filming locations as much as anything else.

Take this uber-contemporary waterfront home in the Hamptons, the exclusive pocket of New York’s Long Island favoured by wealthy New Yorkers, which is on the market for $55 million. The angular and glass-covered house was featured in Season 3 of the award-winning series, starring as the beachfront mansion owned by billionaire investor Josh Aaronson, played by Adrien Brody, and visited by Kendall and Logan Roy.

Built in 2018 in the hamlet of Wainscott, the property has a giant open-plan living, dining and kitchen space, where the home’s jaunty inverted roofline translates inside to an upside-down teak pyramid in the centre of room.

The custom kitchen occupies one end of the space with a statement marble backsplash—which made an appearance in the show. At the other end is a towering stone fireplace—you’ll spot that during the episode, too.

A Hamptons, New York, home that featured in “Succession” is selling for $55 million.
Bespoke Real Estate
Composite: Getty Images; Sean Hemmerle

 

Bespoke Real Estate

 

Macall B. Polay/HBO

In fact, there were a number of real-life trophy homes the TV series used as sets. They include multiple units at the Upper East Side new development 180 East 88th Street on Manhattan’s Upper East Side. The show even took over the building’s crown jewel—a triplex penthouse with a dramatic covered terrace—to film as Kendall Roy’s New York home.

The airy, contemporary apartment was designed around soaring ceiling heights, floor-to-ceiling views and an imposing, sculptural spiral staircase. The five-bedroom condo has its own private elevator connecting the three levels, which culminate in an outdoor roof landing soaring nearly 470 feet over Manhattan. The developer of the building sold the penthouse in June for $24.7 million, according to property records. Meanwhile, another, smaller penthouse in the building that was also featured in “Succession” is still on the market for $14.85 million.

The triplex penthouse at 180 East 88th Street on Manhattan’s Upper East Side served as Kendall Roy’s home.
Sean Hemmerle

 

A loggia from 180 East 88th Street overlooking the city.
Sean Hemmerle

 

A bedroom at 180 East 88th Street on Manhattan’s Upper East Side opens to a terrace.
Sean Hemmerle

“Wednesday” — Two Nominations, Including Outstanding Comedy Series

“Wednesday,” Netflix’s supernatural comedy centred around Wednesday Addams (Jenna Ortega) of “The Addams Family” fame, is nominated for best comedy, and Ortega is nominated for best actress in a comedy.

In the show’s inaugural season, Addams is expelled after dumping live piranhas into the school’s pool to exact revenge on the water polo team, and is sent to Nevermore Academy, a private school for supernatural outcasts, including witches, werewolves and vampires.

The show headed to Romania for much of filming, with the suitably gothic and foreboding Cantacuzino Castle, in the small mountain town of Bușteni, serving as the exterior setting for Nevermore. The former royal summer residence was built in 1911 at the request of the late Romanian Prince Gheorghe Grigore Cantacuzino, and today is open to the public.

Cantacuzino Castle in Busteni, Romania was completed in 1911.
Getty Images

 

“Shrinking” — Two Nominations, Including Outstanding Lead Actor in a Comedy Series

Apple TV+’s “Shrinking,” follows therapist Jimmy (played by Jason Segel) as he deals with the grief of his wife’s death. His next-door neighbuor Liz (Christa Miller) is a close friend, becoming somewhat of a surrogate mother to Jimmy’s teenage daughter, Alice (Lukita Maxwell). The proximity of their Southern California homes make for blurry boundaries, especially as Jimmy struggles as a newly single parent.

The show—nominated for two Emmys, including a best actor in a comedy for Segel—actually filmed parts at two neighbouring homes in Pasadena, California. The real-life home used as Jimmy’s was built in 1913 and is designated as a Historic Highlands Craftsman home. The Arts and Crafts-style house spans just under 3,500 square feet with five bedrooms, four bathrooms and a pool, according to its most recent listing. It last sold in 2016 for $1.6 million. The neighbouring home, used for Liz and her husband, Derek, is a bit smaller, at about 1,600 square feet. Built in 1922, it has two bedrooms and two bathrooms.

Apple TV+

 

One of two homes in Pasadena, California, where “Shrinking” was filmed.
Google Maps

 

“The Crown” — Six Nominations, Including Outstanding Supporting Actress in a Drama Series

Several U.K. estates were featured in “The Crown,” a Netflix original that garnered six Emmy nominations this year, including nods for Outstanding Drama Series and Outstanding Supporting Actress in a Drama Series for Elizabeth Debicki’s portrayal of Princess Diana. Burghley House—a 16th-century manse in Lincolnshire, England, about 130 miles north of London—is one of the largest surviving houses of the era, as well as an example of the great Elizabethan “prodigy” houses, built to honour Queen Elizabeth I. Indeed, it was her Lord High Treasurer, William Cecil, who helmed the project, built between 1555 and 1587.

The estate was featured in the most recent season of the show, but it’s no stranger to the screen, having also been seen in films like “Pride & Prejudice” (2005) and “The Flash” (2023), and even had a turn on “Antiques Roadshow.” The Cecil family put the home in a trust some years ago, and the property is now open to the public, who can tour its extensive gardens and art collection, and is still the site of the Burghley Horse Trials, set to begin this year on Aug. 31. “The Crown” has received 69 Emmy nominations since its first season in 2016, winning 21 times.

An ornate bedroom inside Burghley House.
ORAZ Studio/500px/Getty Images

 

Burghley House is a 16th-century English country house near Stamford, Lincolnshire.
Mike Egerton/PA Images via Getty Images

 

“House of the Dragon” — Eight Nominations, Including Outstanding Drama Series

In “House of the Dragon,” HBO’s blockbuster prequel series to “Game of Thrones,” Driftmark is an island in Blackwater Bay and the ancestral seat of House Velaryon who rule from the castle High Tide.

Away from Westeros, the rugged and rocky outcropping, and the historic castle that stands on top of it, is St. Michael’s Mount, found in the sea off the coast of Marazion in Cornwall, in South West England.

The awe-inspiring spot is currently home to the St. Aubyn family, who have a 999-year lease to live in the castle and run the visitor business. And unsurprisingly, given its grandeur, the mount has been used as a filming location for the 1979 film “Dracula,” the 1983 James Bond film “Never Say Never Again,” the 2003 film “Johnny English,” and in the 2012 adventure movie “Mariah Mundi and the Midas Box.”

Getty Images/imageBROKER RF

 

St. Michael’s Mount is a tidal island on the southwest tip of England in Cornwall.
Getty Images

 

“The White Lotus” — 23 Nominations, Including Outstanding Actor in a Drama Series

Season 2 of HBO’s “The White Lotus” took both its cast and viewers to the scenic Sicilian town of Taormina. While the White Lotus—where the show’s affluent, eccentric guests are seen dining, lounging and creating chaos—is a fictional resort, the season was filmed at the real San Domenico Palace, which is a Four Seasons hotel.

Formerly a 14th-century convent, the historic building has been reimagined into a five-star resort offering a cliff top infinity pool, Italian gardens and Michelin-starred dining. Though, much of the monastery’s structure has been preserved, including the original frescoes. With views of the Ionian Sea, Mount Etna and the ancient Greek theatre Teatro Antico di Taormina, the hotel provides for an idyllic Italian getaway, with hopefully less theft and death than that of “The White Lotus.”

The fictional resort this season was filmed at the real San Domenico Palace in Taormina, Sicily.
Peter Vitale/Courtesy of Four Seasons

 

Formerly a 14th-century convent, San Domenico Palace has been reimagined into a five-star resort.
Courtesy of Four Seasons

 

Much of the monastery’s structure has been preserved.
Peter Vitale/Courtesy of Four Seasons

 

“Beef” — 13 Nominations, Including Outstanding Limited or Anthology Series

An extravagant mansion that happens to be one of Los Angeles’s most popular shooting locations made a cameo in the fifth episode of “Beef,” when main characters Amy (played by Ali Wong) and her husband, George (Joseph Lee), book a luxury rental.

In their everyday life, the main characters of this revenge-filled black comedy from Netflix live in a suitably dark house filled with concrete and dim lighting—a stark contrast to the sun-drenched vacation home lined in window walls overlooking the Santa Monica and San Gabriel mountains. In real life, the mansion is located in the San Fernando Valley and once belonged to Frank Sinatra. The characters and their daughter, June, lounge in the pool, with the airy, white Mid-Century Modern home in the backdrop.

Besides “Beef,” Miley Cyrus made the striking home and cinematic views the backdrop of her latest album “Endless Summer Vacation,” which dropped earlier this year. The six-bedroom mansion was also featured in “Mad Men” and “Dreamgirls” (2006).

 

The former home of Frank Sinatra featured in “Beef.”
DPP Real Estate

 

Episode 5 features George and June splashing around in the homes 50-foot pool.
DPP Real Estate
The six-bedroom mansion, which also featured in “Mad Men” and “Dreamgirls” (2006), went up for sale again in April for $16.5 million.
DPP Real Estate

 

“Only Murders in the Building” — 11 Nominations, Including Outstanding Comedy Series

 

Douglas Elliman is handling sales in the Upper West Side building.
Evan Joseph Photography

The Selena Gomez, Steve Martin and Martin Short comic murder mystery “Only Murders in the Building” takes place almost entirely within the fictional Arconia and the surrounding Upper West Side neighbourhood. In reality, filming took place at the Belnord. Completed in 1908, the luxury residence occupies a full block at Broadway and West 86th Street.

The building has a starring role, showcasing apartments within its 213 units, as well as its famous inner courtyard (one of the largest in the city) and its facade. Originally designed by Hiss and Weekes in the Italian Renaissance Revival style, it was reimagined in 2018 by Robert A.M. Stern, who updated and opened up the apartments while preserving the public spaces. There are currently 13 active listings at the Belnord, listed by Douglas Elliman Development Marketing and priced up to $13.85 million for a four-bedroom on the 11th floor of the 13-storey building.

The grand front entrance to the building leads into a massive inner courtyard.
Evan Joseph Photography

 

A actual bedroom suite at the Belnord.
Evan Joseph Photography

 

The real resident’s lounge at the Belnord.
Evan Joseph Photography

—V.L. Hendrickson, Liz Lucking, Casey Farmer and Beckie Strum contributed reporting

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The Unexpected Ways a Big Raise Affects Your Happiness

Up and down the income ladder, people say more money would make them happier. When they actually get it, that isn’t always the case.

Some people who have gotten big raises recently say the money hasn’t changed their day-to-day life or hasn’t provided them as much joy as the things in their life that have nothing to do with money. Others were hoping for a bigger raise or felt conflicted about making more money.

Jess Tapia, a 28-year-old accountant in Hoffman Estates, Ill., thought for years that $90,000 was a salary that would make her happy. When a raise of about $20,000 pushed her pay to that level last February, it did—at first.

To celebrate, Tapia booked a vacation to Germany the next month. The good vibes soon wore off.

“By the time I came back from that trip, it kind of fell flat for me because it was just back to normal, back to the routine,” she said.

The past few years have been good ones for workers seeking higher pay. Median year-over-year wage growth hit a recent peak of 6.7% in summer 2022, after mostly staying below 4% for more than a decade before 2021, according to the Atlanta Federal Reserve. Many of those who switched jobs, or threatened to, made substantial salary gains.

And people with higher incomes do tend to be happier, many studies show. Research looking at lotteries and random cash giveaways indicates that additional money can make people happier for months or even years.

But moving up the income scale, it takes more money to generate the same good feelings, said Jan-Emmanuel De Neve, an economics professor at Saïd Business School at the University of Oxford who studies well-being. The proportion of the increase matters.

“If an employer moves somebody from $15,000 to $30,000, that will have an impact on people’s life satisfaction that is the equivalent of them moving somebody from, say, $60,000 to $120,000,” De Neve said.

More is more

A pay increase that takes someone from financially stressed to financially stable often leads to more happiness. At the low end of the earnings spectrum, a higher income is associated more with squashing negative feelings than producing positive ones, according to a 2021 paper in the journal Proceedings of the National Academy of Sciences.

Randeep Chauhan, a 30-year-old nurse in Ferndale, Wash., went from making about $45,000 in 2021 to $90,000 in 2022 after completing a one-year nursing program.

“Doubling my income didn’t double my happiness, but it came close,” he said.

For Chauhan, much of the happiness boost came from being able to stop worrying about being able to cover his family’s monthly bills. He said his blood pressure dropped to a healthy level after his change in pay, which he attributes largely to the drop-off in financial stress.

If you get a raise, don’t just spend it, said Neela Hummel, a financial planner and the co-CEO of Abacus Wealth Partners.

“The worst thing that can happen with a raise is that that money gets immediately folded into cash flow and a client doesn’t even notice it,” she said.

Many people also jump ahead to how nice a car or how big a house they could afford with a new paycheck. Instead, Hummel advises, take the raise as an opportunity to up your savings or pay down debt.

Chauhan said he has avoided lifestyle creep, putting money toward retirement savings and student loans instead of buying a new computer or phone. “There’s a weird rush in making money and not spending it,” he said.

Austin Benacquisto’s pay has rocketed upward over the past few years. The 29-year-old commercial debt broker in Atlanta made roughly $60,000 in 2019, $110,000 in 2020, $180,000 in 2021 and $325,000 in 2022, including bonuses.

His steps up to $110,000 and $180,000 felt better than the one up to $325,000, he said.

“The last 50,000 I made in 2022 just was for stuff in my house that I wanted,” he said.

Benacquisto’s pay fell to about $200,000 last year as his industry slowed down. The drop felt worse than the recent increases felt good, he said.

“This being the first decrease, it definitely stings,” he said.

The paycheck next door

People’s happiness with their pay is strongly tied to how it compares with the pay of others around them, say researchers who study compensation. Sometimes, those comparisons rankle.

A 30% raise made Ryan Powell less happy at work.

Powell, a 38-year-old finance director for a manufacturer in western North Carolina, received that pay bump in 2022. He had been hoping for more based on the salary information he had heard from recruiters, peers in the industry and his M.B.A. cohort.

The initial thrill of the raise lasted about three months, he said.

“The further I got into it, the more I was realising that I was anchored to the higher number,” he said.

Executives are more likely to leave their companies if their pay is low compared with other top bosses, according to a 2017 study in the journal Human Resource Management.

Comparisons matter closer to home, too. Living in an area where people tend to make more money than you is linked to being less happy, according to a 2005 paper in The Quarterly Journal of Economics.

One reason that Tapia, the accountant in Illinois, isn’t happier after her raises is that she feels guilt about making more money than her parents ever did. Her dad works in construction and landscaping.

“I work from home mostly, I’m comfortable and I’m always indoors. During summertime, he’s sometimes outside working 10 hours in 100-degree weather,” she said.

Tapia recently got another raise of roughly $10,000. She again booked a vacation to Europe but is hoping to extend her joy further this time.

“I’m starting to feel like this is going to plateau, so let me try and make the feeling last a little longer with this trip,” she said.

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Bitcoin is back, but not as you know it

Several of the first spot bitcoin exchange-traded funds (ETFs) to ever be listed on United States stock markets began trading last night. This follows the US Securities and Exchange Commission (SEC) approving the listing of 11 spot bitcoin ETFs after a legal battle with fund provider, Grayscale. The approval follows six years of knock-backs for many fund providers seeking permission to offer spot bitcoin ETFs. This is considered a watershed moment in the investing world, allowing more investors to gain exposure to the cryptocurrency asset without buying bitcoin directly themselves.

ETFs are baskets of assets that are professionally managed by fund providers. Ordinary investors can buy them on the stock market just like any other share. Among the 11 fund providers approved to launch their ETFs this week are BlackRock, Fidelity, Grayscale and VanEck.

Spot bitcoin ETFs give investors direct exposure to bitcoin at its spot (current) price. The ability to buy bitcoin exposure via a traditional stock exchange will give investors some degree of regulatory protection as the fund managers must comply with the Securities Act, Exchange Act, and SEC rules. Investors may also feel more peace of mind buying bitcoin via a professionally managed ETF instead of buying it directly themselves through an unregulated cryptocurrency trading platform.

However, SEC Chair Gary Gensler emphasised that the decision to approve the spot bitcoin ETFs did not mean the SEC endorsed cryptocurrency assets. He said bitcoin was “primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing”. He added: “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

The SEC’s decision follows a lawsuit launched by Grayscale after the SEC refused to allow it to convert its Grayscale Bitcoin Trust into a listed ETF. The US Court of Appeals for the District of Columbia found that the SEC had failed to adequately explain its reasons for denying the listing. This meant the SEC had to review its ruling and either more fully explain its reasoning, or approve the listing of the ETF. Gensler said in light of these circumstances, “I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin [ETF] shares”. The SEC not only approved Grayscale’s product but 10 other spot bitcoin ETF applications awaiting a decision.  

Gensler warned that the approval of spot bitcoin ETFs would not automatically open the door for other cryptocurrency ETF products. “It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities,” he said. Bitcoin closed slightly lower at US$46,382.60 in overnight trading. Cryptocurrencies are known for their volatility. In the case of bitcoin, it hit an all-time peak value of just under $69,000 in November 2021 before crashing to below $17,000 in 2022. Over the past 12 months, the bitcoin price has risen by almost 160%.

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American Finance Has Left Europe In the Dust. The Tables Aren’t Turning.

After a decade and a half of seeing the U.S. economy pull ahead thanks to its outsize technology sector, European politicians are desperate to fight back in emerging industries such as green energy. One challenge they face is that America also keeps pulling ahead in the business of financing the investments required.

On Thursday, Luxembourg for Finance—a public-private partnership that seeks to promote the financial industry in the low-tax city state—published a report detailing the different ways in which European banks and asset managers might regain an edge relative to U.S. and Asian peers.

This is part of an effort by officials across the European Union to give firms a break. “Old economy” industries such as car manufacturing face rising competition from China and higher energy costs since Russia invaded Ukraine. The U.S. Inflation Reduction Act also has drawn investment across the Atlantic. Last year, the European Commission tasked former Italian prime ministers Mario Draghi and Enrico Letta with drafting a report on European competitiveness.

Luxembourg for Finance Chief Executive Nicolas Mackel echoes a common refrain: “Europe can take the lead in financial services when we eliminate fragmentation.” His report points out that the return on equity of European banks has bounced back in recent years. But it also showcases the gulf that has opened up relative to U.S. financial firms.

European lenders’ return on equity is now around 8%, compared with 12% across the Atlantic and 10% in Asia, in part as a result of stricter regulations following the 2008 banking crisis. Most European banks trade below book value on the stock market, having returned a negative 14% to investors since the April 2009 trough. Large American banks trade above book value and have gained 113%.

In services particularly exposed to international competition, American banks dominate in Europe too: In 2023, they took the top five positions for mergers and acquisitions deals, Dealogic data shows, with France’s BNP Paribas coming in sixth, and the top six spots for issuing equity.

And this isn’t just about banks. In 2007, top European and U.S. asset managers roughly split the global market between them. By 2022, European fund managers had just 22% of total assets under supervision, with only France’s Amundi playing in the big leagues. This reflects their failure to jump on the train of low-fee passive investment as effectively as U.S. giants such as Vanguard and BlackRock. Ironically, the latter’s dominance in exchange-traded funds resulted from its acquisition of iShares from Britain’s Barclays in 2009.

European officials are taking some useful steps. They admitted in 2022 that a directive aimed at harmonising securities markets, known as Mifid 2, has done more harm than good, and have agreed to amend it. New EU-wide savings products give pensioners greater choice, and might help address the lack of sophistication that characterises European individual investors relative to Americans used to managing 401(k)s. Stringent constraints on what asset managers can offer are being relaxed, and the rules governing sustainable finance—where Europe has an edge—are being clarified.

Meanwhile, the fallout from last year’s Silicon Valley Bank debacle will bring U.S. regulation closer to Europe’s.

Such rule changes might narrow the gap, as investors have recognised: The stock-market discount at which European lenders trade compared with American ones has shrunk over the past three years. But it is hard to see the tables fundamentally turning. In the digital era, economies of scale are even more powerful. The European Union comprises many countries with different languages, whose firms and investors have local financial relationships and strong home biases. The obstacles to eliminating fragmentation are huge.

If Europe can’t compete with America’s private financial muscle, it is doubly problematic that its efforts to mobilize industrial investment through the public sector have been meek compared with the U.S. Inflation Reduction Act. Promoting more sustainability-minded funds isn’t an adequate fix.

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Japan Long Looked Down at Luxury Penthouses. Now Things Are Looking Up.

Ken Akao, a 35-year-old cosmetic surgeon, was a little concerned when he bought a multimillion-dollar Tokyo apartment in October 2023. It wasn’t about the property itself, a three-bedroom, 39th- floor penthouse with a spiral staircase, Jacuzzi and infinity pool. It was about what his father, a frugal Japanese diplomat of the old school, would think after seeing a property so grand—and so un-Japanese.

After some time, Akao summoned the courage to invite his dad for a visit. To his relief, he says, the elder Akao enjoyed the tour and pronounced the pad “wonderful.”

A century after the Park Avenue penthouse became established as the height of residential luxury for New Yorkers, the concept has finally made it across the Pacific to Tokyo. Part of the credit goes to people with foreign experience such as the younger Akao, who grew up largely overseas, as well as the influence of Chinese buyers flooding into Japan these days.

It also reflects changing values about what constitutes the ideal property in Tokyo.

Japan’s capital first flourished in the 17th century as the seat of the shogun, or generalissimo, who reigned as Japan’s de facto ruler. The Tokugawa family of shoguns, having subjugated feudal lords across the land, insisted that the lords spend half their time in the capital. Soon the city then known as Edo was dotted with spacious compounds where grandees lived in sprawling low-slung wooden homes watched by the shogun’s spies.

Camille Bressange/THE WALL STREET JOURNAL

Long after Edo became Tokyo and feudalism ended in 1868, those properties served as the prototype for the rich. Kakuei Tanaka, a poor man from the provinces who got wealthy with business ventures while rising to become Japan’s prime minister between 1972 and 1974, used to hold court inside the walls of a leafy compound in the Mejiro area of Tokyo, where he could feed the carp in his pond. (The house was destroyed by fire on Jan. 8. No one was hurt.) In a country that tends to frown on ostentation and special treatment for the privileged, the high walls surrounding such properties offered privacy.

These days, most rich Japanese still prefer to keep their wealth under wraps. But other changes have made a luxury condominium in a prime central Tokyo location look attractive compared with a house on a spacious property in a residential area.

One is the burst of the land-price bubble in the early 1990s, which shattered the myth of land as an indestructible store of value. These days, say real-estate professionals, bankers are less inclined to insist on land as collateral and more willing to extend loans backed by quality condos that are seen as likely to retain value across economic cycles. Also, in an ageing country where labor is in short supply, many older couples look askance at trying to care for large grounds. “Weeding is such a pain for old people,” said Satoshi Omori, president of a Tokyo real-estate appraisal firm.

The 2011 earthquake in northeastern Japan boosted the appeal of living in an earthquake-resistant concrete building in a central location rather than a wooden house farther out, where services might be hard to come by in an emergency.

“Compact cities are a global trend and people tend to prefer places that are more convenient,” said Shigeru Funabashi, a Tokyo broker.

Funabashi is a cosmetic surgeon who has in recent years shifted his career toward real estate, having developed a fascination with luxury residences. In 2011, he went to London to take a look at One Hyde Park, which is the location of a penthouse that was recently one of the highest priced in the city. He recalls thinking to himself, “Something like this will come to Tokyo someday.”

Foreign developers were ahead of the game in tapping the wellspring of demand Funabashi sensed and spreading the word “penthouse” in the Japanese language. In the Shibuya district, popular among tourists, Canadian developer Westbank in 2020 completed a five-floor condominium designed by architect Kengo Kuma. Traditionally, such buildings had nothing fancier on the top floor than plumbing and electrical equipment. But Westbank put in a multilevel penthouse with a private infinity pool on the roof. It sold early last year for $50 million, according to the developer.

Some other buyers in the building bought two units to combine them. “It really showed us that there is this massive gap in the market for products at this level,” a Westbank representative in Japan said. She said that if Westbank had the chance to build the 12-unit property again, it would make it with only six units.

Marq Omotesando One is another luxury low-rise condominium by foreign developers in central Tokyo that was completed in 2021. The development, led by a unit of Hong Kong-based investment firm BPEA, features a 6,700-square-foot penthouse with roof pool that local agents said has been listed at a price in the tens of millions of dollars. Its current status couldn’t be determined.

At Japanese real-estate development companies, “no one really wanted to rock the boat or do anything different,” said Zoe Ward, a real-estate agent originally from Australia who has worked for 15 years in Japan’s property market. But they changed course after seeing foreign developers building extravagant properties and selling units at high prices never seen before, Ward said.

Japanese developers say that many customers of ultra expensive condos are locals, including corporate executives and younger entrepreneurs who are often familiar with high-end homes in places such as New York and London.

Azabudai Hills, a Mori Building project in central Tokyo that includes offices and apartments, opened on Nov. 24. The development includes what is currently the tallest building in Japan, with 91 Aman-branded apartments on high floors. Planning documents submitted to authorities show there are three duplex penthouse units on the 64th floor. The largest unit occupies half the floor and has a private pool, the documents indicate. Local brokers say all three have been sold.

Mori Building declined to release floor plans or price ranges for those apartments—a reminder that the rich here still don’t want their private business aired, even if their high-rise homes are visible dozens of miles away. A local publication, Daily Shincho, reported that the largest unit sold for the equivalent of $200 million, which would make it the highest-price condo ever sold in Japan by a multiple of two or three.

Swimming pools on rooftops are rare in Japan, partly because of concerns about water leaking during earthquakes. But that is also changing. A central Tokyo office-hotel building developed by Mori Building opened in October with restaurants and an infinity pool on the roof.

“The rooftop was never utilised in Japan as much as it should be,” said architect Shohei Shigematsu, who designed the building. He said his team added extra drainage to reassure the developer that water wouldn’t splash on passersby 49 floors below in the event of an earthquake.

More luxury penthouses are on the way, including several on the top floor of a 13-story building at Mita Garden Hills, a project jointly developed by units of Mitsui Fudosan and Mitsubishi Estate. The building won’t be completed until 2026, but Mitsui says all of the penthouses have been sold.

The most expensive one, with a floor area of about 4,000 square feet, sold for 5.5 billion yen, equivalent to about $38 million, according to a broker familiar with the deal. Mitsui declined to comment.

In Osaka, the centre of Japan’s second-largest urban area after the Tokyo region, a penthouse in a 46-storey building, due to be completed in December 2025, is listed for the equivalent of about $17 million. The price for the unit, which at 3,300 square feet is the building’s largest, would be the highest price ever for an Osaka-area condo, said a spokesman for Sekisui House, one of the developers.

The spokesman said the penthouse has the vibe of a European guesthouse for visiting dignitaries, with chandeliers hanging from ceilings that are as high as 16 feet. Some other units feature an elevator to carry the owner’s car into the premises.

While ultrahigh-price deals are usually not included in industry databases, prices of Tokyo apartments generally are rising, driven by the higher cost of materials and labor. The Real Estate Economic Institute, a Tokyo-based firm tracking the property market, said the average price of a new apartment sold in central Tokyo for the six months through September was up 36% compared with the same period a year earlier and topped 100 million yen, equivalent to about $700,000, for the first time.

Akao, the cosmetic surgeon and recently minted penthouse owner, says he grew fond of the luxury lifestyle when visiting Aman hotels in Japan and Greece. He wasn’t able to get his hands on one of the Aman units in Azabudai Hills, but found a good substitute in his penthouse across from Yoyogi Park, a central Tokyo urban oasis like New York’s Central Park.

There is an en-suite bathroom in the primary bedroom, rare for a Japanese home, and Miele appliances in the kitchen. The staircase from the living-dining area, which features sofas from Arflex Japan, leads to an open-air 700-square-foot deck with the infinity pool.

“I often have large group get-togethers,” Akao said. “The pool will make gatherings easier.”

Akao said that growing up in the U.S., Switzerland and Austria where his father was posted made him familiar with the lifestyle because some of his classmates lived in houses with a pool and talked about it casually at school.

While analysts say most of the recently built penthouses are bought by people who intend to live in them, there are still flippers. Akao might be one of them. He said he is trying to sell his unit before considering whether to move in. He declined to disclose what he paid but said he was asking the equivalent of about $9 million.

—Peter Landers contributed to this article.

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The Latest Dirty Word in Corporate America: ESG

Many companies no longer utter these three letters: E-S-G.

Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives.

On earnings calls, many chief executives now employ new approaches. Some companies, including Coca-Cola, are rebranding corporate reports and committees, stripping ESG from titles. Advisers are coaching executives on alternative ways to describe their efforts, proposing new terms like “responsible business.” On Wall Street, meanwhile, some firms are closing once-popular ESG funds as interest fades.

The shift in messaging reflects a reality: “ESG is complicated,” said Daryl Brewster, a former Kraft Foods and Nabisco executive who now heads Chief Executives for Corporate Purpose, a nonprofit of more than 200 companies focused on social impact.

The movement to bake accountability into business decisions stretches back centuries; the term ESG gained momentum after the United Nations used it about 20 years ago. Over time, the effort became divisive—derided by some state officials as “woke capitalism,” and criticised by others for putting too much focus on measurement and disclosure requirements.

Many CEOs stress that they continue to follow sustainability commitments made years ago—even if they are no longer talking about them as often publicly. A December survey by the advisory firm Teneo found that about 8% of CEOs are ramping down their ESG programs; the rest are staying the course but often making changes to how they handle them.

Many leaders are more closely examining disclosures, wanting to avoid regulatory scrutiny or political criticism. In lieu of lofty pronouncements, advisers are telling CEOs to be more precise and to set goals that can be achieved. Saying as little as possible is recommended.

“We’ve seen a great deal of reframing and adjusting by CEOs in the ESG arena. Not only of what they say, but also where they say it and how they characterise it,” said Brad Karp, chair of law firm Paul Weiss who advises a number of CEOs. “Most companies are moving forward operationally with their ESG programs, but not publicly touting them, or describing them in different ways.”

When Thomas Buberl, CEO of Paris-based insurer AXA, met in the U.S. last year with the leaders of an asset manager, a fertiliser maker and a tech company, executives suggested that he reflect the newfound caution. “I used the abbreviation ESG, and people taught me not to use that word,” Buberl said. “I said, ‘What do you want me to call it?’”

Few people had a ready answer. Buberl said the importance of environmental efforts and other goals shouldn’t be underplayed. “We need to move from intentions to actions,” he said.

ESG became even more politicised following a spat in 2022 between Disney and Florida Gov. Ron DeSantis. That opened the door to sharp commentary on ESG efforts broadly by more than a dozen other state officials and a pullback by some asset managers. Investors yanked more than $14 billion from ESG funds in the first nine months of 2023, according to Morningstar.

BlackRock’s Larry Fink wrote a letter to investors in 2023 that didn’t explicitly reference ESG, after some states pulled money in 2022 over the firm’s ESG emphasis. State Street in November announced a new voting policy for investors who may not want to emphasise ESG as heavily. Fidelity last year removed language considering potential ESG impacts from its proxy-review process.

On earnings calls, mentions of ESG rose steadily until 2021 and have declined since, according to a FactSet analysis. In the fourth quarter of 2021, 155 companies in the S&P 500 mentioned ESG initiatives; by the second quarter of 2023, that had fallen to 61 mentions.

Adding to the challenges for companies is that some dimensions of ESG, particularly the social goals, can be difficult to quantify. Corporate diversity programs, often part of an ESG agenda, face new scrutiny following a Supreme Court decision on affirmative action and legal challenges from largely conservative groups.

Executives and their advisers say companies remain more committed to the “E” in ESG, wanting to respond to climate change. Some CEOs say that environmental factors are crucial to their business, one reason many went to Dubai for COP28, the U.N.’s climate conference. Climate change is also likely to be a key theme at the World Economic Forum in Davos, Switzerland, next week.

Revathi Advaithi, CEO of Flex, said the manufacturer has 130 factories across the world and there isn’t a question of whether they need to operate in a sustainable way.

“It’s not as though I got a whole bunch of new investors because we had a sustainability report or we were ESG-focused,” she said. “We didn’t do it for that purpose…. We wanted to focus on water reduction, power reduction, all those things. So I don’t view it as, hey, it’s a trend that came today and it’s gonna go off tomorrow.”

Some of the changes leaders are making are subtle. At Coca-Cola, the company published a “Business & ESG” report in 2022; in 2023, it was released as the “Business and Sustainability” report. The beverage giant also renamed committees on its board of directors.

The fiercest critics of ESG say they welcome less discussion of it. “If this trend is decreasing, these CEOs must have realised that this puts them at greater legal risk and costs them customers,” said Texas Attorney General Ken Paxton, who has pushed back against ESG policies, in a statement.

What to call such efforts now remains a debate. Brewster’s nonprofit CEO group advises leaders to discuss initiatives in clear language, explaining efforts to cut water use, for example, or to use terms such as “our people” or “our natural resources.” Brewster said he wants more leaders to adopt the phrase “responsible business.”

“You can be anti-ESG,” Brewster said. “It’s hard to be anti-responsibility.”

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How Much Caffeine You Should Actually Have—and When

Caffeine can give us a boost, but too much can mess with our sleep and make us feel jittery. So how do we know what’s the right amount?

Generally, government and health groups recommend that healthy adults consume no more than 400 milligrams of caffeine a day. That comes out to about four, 8-ounce cups of coffee, says Jennifer Temple, a professor of exercise and nutrition sciences at University at Buffalo School of Public Health and Health Professions.

(No, that 20-ounce Starbucks Venti doesn’t count as one cup of coffee.)

And believe it or not, we are doing pretty well on this target. The average American adult consumes about 200 milligrams of caffeine a day and in Europe, it is 270 milligrams, according to a 2017 review study.

But not everyone is optimising their caffeine intake to maximise how it can help them—by sharpening concentration for work or giving them a boost before a run—without hurting their sleep or overall health.

Here’s how to think strategically about getting the most out of your daily dose.

Optimising the boost

Caffeine can help you focus and keep you alert.

About 100 to 150 milligrams—or one to 1.5 cups of coffee—is a ballpark amount that will deliver a boost, says Astrid Nehlig, an emeritus research director at the French National Institute of Health and Medical Research, who has studied caffeine’s impact on brain activity, though it varies from person to person.

The effects generally kick in about five minutes after consumption and increase to become optimal for between roughly 15 and 120 minutes, Nehlig says.

Caffeine has been linked to physical benefits, too. People walked more on days they drank coffee than on days they didn’t, according to a 2023 study of 100 people in the New England Journal of Medicine. Participants took an average of 1,000 more steps on days when they drank caffeinated coffee than when they didn’t.

Other studies have suggested that caffeine can sometimes help us work out harder, such as when we have it before high-endurance exercise like long runs or swims, or sports that require a sustained effort, like soccer, Nehlig says.

The same boost hasn’t been found with shorter efforts, such as a sprint. Caffeine doesn’t act directly on muscles but rather reduces your rate of perceived exertion and the time it takes you to feel exhausted.

The downsides

Caffeine’s main negative for your health is that it can disrupt your sleep.

The NEJM study that found that people walk more on days when they drink caffeine also found a downside. On days when study participants could drink as much caffeinated coffee as they wanted, they slept on average 30 minutes less than on days they didn’t drink any.

The impact on sleep varies greatly depending on how fast you metabolise caffeine, says Gregory Marcus, a cardiologist and professor of medicine at University of California, San Francisco and first author of the NEJM study.

On average, it takes about 4.5 hours for half of the caffeine consumed to pass through your system. However, genetic differences make some people metabolise it slowly or quickly, doctors and researchers say. The population is roughly split between fast and slow metabolisers.

The sleeping and walking study tested whether participants were slow or fast metabolisers of coffee. Those that were slow metabolisers slept nearly an hour less on the nights they drank caffeinated coffee, while the fast metabolisers didn’t experience any impact on sleep.

Where to get your caffeine

The best source of caffeine is unsweetened coffee or tea, says Dr. Frank Hu, professor of nutrition and epidemiology at Harvard T.H. Chan School of Public Health. These drinks have other beneficial ingredients, such as polyphenols, which have antioxidant effects which reduce inflammation.

The caffeine content in coffee and tea can vary, but soda can’t have more than 71 milligrams per 12 ounces, per Food and Drug Administration regulations.

Adults get most of their caffeine from coffee, but the market for energy drinks is growing. Pay extra attention to the caffeine in these drinks, because some contain very high levels.

Getting caffeine from soda or energy or sports drinks makes it more likely you are also getting a high dose of sugar and empty calories, says Hu.

Extra caution

Kids under 12 should avoid caffeine, while 12- to 18-year-olds should have no more than 100 milligrams a day, according to the American Academy of Pediatrics. Pregnant women are advised to have no more than 200 milligrams of caffeine a day.

People with chronic conditions like high blood pressure, diabetes or heart disease might want to be more cautious about their caffeine consumption, Hu adds. The NEJM study found that on the days when participants consumed caffeine, they had more abnormal heart rhythms in the lower chamber of the heart, which is associated with a greater risk of developing heart failure.

And people who get migraine headaches should try to drink no more than 100 milligrams of caffeine a day, the equivalent of a mug of coffee, says Dr. Amaal Starling, a headache specialist and neurologist at Mayo Clinic in Scottsdale, Ariz. She advises her patients who have daily or severe headaches not to drink any caffeinated beverages or switch to decaffeinated coffee.

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The new east coast capital outranking Melbourne for property values

The median home value in Brisbane has surpassed Melbourne for the first time in 15 years following a staggering 50 percent increase in home prices since the onset of the pandemic in March 2020. CoreLogic Head of Research, Eliza Owen said the price data reflects “the substantial impact that the pandemic has had on housing preferences” in Australia. Before the pandemic, Brisbane’s median dwelling value was $187,000 lower than Melbourne’s and today it is $7,000 higher at $787,000.

Brisbane now has the third-highest median dwelling value among the capital cities, behind Sydney and Canberra. Home values in the nation’s capital overtook Melbourne in 2021, with Canberra’s median dwelling value rising 31 percent between March 2020 and today. Over the same time frame, Melbourne values rose by just 11 percent, which was the weakest growth among the capital cities. Melbourne was last year rated the third most liveable city in the world on the Global Liveability Index by the Economic Intelligence Unit, the highest ranking for any Australian city.

“[Brisbane’s] appeal amid an increase in remote work helped fuel strong population growth, increasing housing demand, driving down supply and making it a seller’s market,” Ms Owen said. “The reason for such varied capital growth outcomes may be partly due to lifestyle factors, where the appeal of South East Queensland rose through the pandemic. The normalisation of remote work for many professionals made interstate migration to Queensland more feasible, while Melbourne’s extended lockdowns from March 2020 through to October 2021 may have prompted people to leave the city.”

Net interstate migration to Queensland reached a record high of 51,500 in the year to March 2022, according to the Australian Bureau of Statistics. Over the same period, net interstate migration to Victoria was -20,000. “Net internal migration to Victoria bottomed out at a loss of -35,600 people in the year to June 2021, and was still negative as of June last year,” Ms Owen said. “Value falls across Melbourne were also exacerbated by the loss of overseas migration through COVID.”

Over the 12 months to June 2022, Brisbane’s population grew by 2.3 percent compared to Melbourne’s 1.1 percent. However, Melbourne’s residential population is almost double the size of Brisbane at an estimated 5,031,000 people compared to 2,628,000 in Brisbane.

Ms Owen also explained a technical reason why Brisbane’s median dwelling value has surpassed that of Melbourne. Dwelling median values combine all types of properties. If the data is separated into houses and apartments, Melbourne remains more expensive than Brisbane – but only just. Melbourne’s median house price is $72,000 higher than Brisbane and the median apartment price is $49,000 higher. “The reason for this is that Melbourne has a higher share of units as a portion of the dwelling market. Because units are generally lower value than detached houses, a higher portion of units brings down the median dwelling [value] across all houses and units.”

Ms Owen said Brisbane remains a seller’s market, although the pace of growth in home values is now easing.

“As home values in the city continue to rise, there is less claim to Brisbane being relatively affordable, and some prospective interstate movers may decide to remain in their city,” she said. “Recent weeks have also demonstrated there is some added risk to pockets of the Brisbane property market from extreme weather and flooding, which could impact demand in the near term.”

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Slowly but surely, inflation moves in the right direction

It’s a happy new year for mortgage holders following the release of data on the Consumer Price Index today. The CPI rose to 4.3 percent in the 12 months to November last year, down from 4.9 percent in October, taking pressure off the RBA for another rate rise. 

“This month’s annual increase of 4.3 per cent is down from the 4.9 per cent rise in October and is the smallest annual increase since January 2022,” said Michelle Marquardt, ABS head of prices statistics.

The results make a further rise in the cash rate unlikely when the RBA Board meets in February, the first meeting of the year. December inflation is expected to follow a similar pathway, further reducing the chances of another interest rate hike.

Once again, housing, insurance and food and beverages placed the strongest pressure on prices, although there are signs that services inflation, which has remained stubbornly high, is finally starting to dip, down from 5 percent in October to 4.7 percent.

It’s welcome news for mortgage holders who shouldered significant rate rises over the past 18 months as the official interest rate rose to 4.35 percent. Some experts are so optimistic about the news that they have predicted the possibility of cuts as early as May. However, the country’s largest mortgage lender, the Commonwealth Bank, anticipates September 2024 as the most likely time for the first fall in rates.