Tax reform windfall: These companies are hiking pay, delivering bonuses
Starbucks (SBUX) became the latest company to increase wages and enact other perks for more than 150,000 U.S. employees as a direct result of recent tax reform, joining other corporations in rewarding workers.
The Seattle-based coffee chain said on Wednesday it will give all of its U.S.-based hourly and salaried workers an unspecified raise in April, in addition to a wage increase already dispersed earlier in the Starbucks’ fiscal year, which began last October. Starbucks says it is investing roughly $120 million in the wage increases.
Starbucks is also awarding workers stock grants worth a total of more than $100 million to those employed by the chain as of Jan. 1, 2018. Retail employees will receive at least a $500 grant, while store managers will receive grants of $2,000, the chain said.
The $1.5 trillion tax bill reduces the corporate tax rate from 35% to 21% and changes the way the U.S. government taxes companies that also operate internationally.
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FOX Business breaks down how employees at some major companies are benefitting from the corporate world’s good fortune.
Updated as of 1/24/2018
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The California-based tech giant gave employees below the senior level title of “director” bonuses worth $2,500. The awards were composed of restricted stock units, a source familiar with the situation told FOX Business.
The telecom giant said in late December that more than 200,000 of its employees, including union-represented and non-management workers, will be eligible for a $1,000 bonus. The checks will be in the mail in time for the holidays if Trump finalizes the tax bill with his signature before Christmas. AT&T (T) also said it will invest $1 billion more than expected in the U.S. in 2018, once the cuts are final.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” AT&T Chairman and CEO Randall Stephenson said in a statement. “This tax reform will drive economic growth and create good-paying jobs.”
Starting on March 1, Bank of New York Mellon Corp. will raise minimum wage to $15 per hour for roughly 1,000 of its 52,500 employees, the Wall Street Journal reported.
BNY Mellon executives noted the new tax code will allow for savings of roughly $250 million per year, which will be used on technology upgrades.
The aerospace and defense company immediately announced $300 million in investments after the bill passed, with $100 million toward corporate giving including employee gift-match programs, $100 million toward workforce development, training and education and $100 million toward enhancing Boeing’s workplaces.
“On behalf of all of our stakeholders, we applaud and thank Congress and the administration for their leadership in seizing this opportunity to unleash economic energy in the United States,” Boeing (BA) President and CEO Dennis Muilenburg said in a statement. “It’s the single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country.”
The Philadelphia-based telecom corporation said it would award $1,000 bonuses to more than 100,000 non-executive employees. In addition, Comcast (CMCSA) NBC Universal Chairman and CEO Brian L. Roberts said the company plans to spend more than $50 billion in the next five years on infrastructure investments that are expected to create “thousands of new direct and indirect jobs.”
In a press release, Comcast said the initiatives were “based on the passage of tax reform and the FCC’s action on broadband.”
Fifth Third Bancorp
The Cincinnati-based banking corporation said it would raise the minimum hourly wage for all employees to $15 per hour and dispense $1,000 bonuses for more than 13,500 workers. The company says tax reform was directly responsible for the initiatives.
“It is good for our communities, employees and Fifth Third Bank (FITB),” Fifth Third President and CEO Greg Carmichael said.
The country’s largest bank said it will raise wages for roughly 22,000 workers to between $15 and $18 per hour. JPMorgan Chase (JPM) employees are also set to receive a $750 bonus this month.
The New York-based airline said on Jan. 4 that it would grant a $1,000 to each of its 21,000 crewmembers, with the exception of its CEO and other executives.
“We believe these tax changes will be positive for our company, and provide us the opportunity to do good things for our crewmembers, customers and shareholders,” JetBlue President and CEO Robin Hayes said in a letter to company employees.
The Dallas-based airline is awarding a $1,000 cash bonus to all of its full-time and part-time employees. The bonuses will be distributed on Jan. 8. In addition, Southwest said it will donate $5 million toward charitable causes and partner with Boeing to modernize its fleet of planes.
“We applaud Congress and the President for taking this action to pass legislation, which will result in meaningful corporate income tax reform for the transportation sector in general, and for Southwest Airlines, in particular,” Southwest Chairman and Chief Executive Officer Gary Kelly said in a statement. “We are excited about the savings and additional capital, which we intend to put to work in several forms—to reward our hard-working employees, to reinvest in our business, to reward our shareholders, and to keep our costs and fares low for our Customers.”
U.S. Bancorp, the parent company of U.S. Bank, is distributing $1,000 bonuses to roughly 60,000 of its employees and raising minimum wage for hourly workers to $15 per hour. The Minneapolis-based company is also donating $150 million to the U.S. Bank Foundation, upgrading health care packages for its employees and investing in better customer service capabilities.
“We believe that tax reform is positive for the U.S. economy because it provides an immediate opportunity to benefit our employees, our communities and our customers,” said Andy Cecere, U.S. Bank’s president and CEO. “We are proud of our people and their commitment to our customers and communities. We felt it was important to reward their hard work and dedication with this special bonus, the minimum wage increase and the health care enhancements.”
The telecom giant Verizon (VZ) on Tuesday joined several major companies in rewarding employees with incentives tied to the passage of a GOP-backed tax reform bill.
The telecom giant will give nearly all of its employees 50 shares of restricted stock, worth roughly $53 each as of this week, a source with knowledge of the equity award confirmed to Fox News. The share prices will be set on Feb. 1.
Wal-Mart (WMT), the world’s largest employer, with over 2 million workers, the move to boost pay for hourly U.S. workers to $11 underscores the power of the new tax package. Additionally, the retailer will give one-time $1,000 bonus payments to workers, depending on length of service. It is also extending maternity and parental benefits for workers. The changes take place in February.
The Walt Disney Co.
More than 125,000 Disney employees will receive $1,000 cash bonuses, the company announced on Jan. 23. The bonuses will be dispersed in two payments, one in March and another in September. In addition, Disney invested $50 million in an education program to cover tuition payments for hourly employees.
“I am proud we are directing approximately $125 million to our cast members and employees across the country and making higher education more accessible with the launch of this new program,” Disney CEO Bob Iger said in a statement. “I have always believed that education is the key to opportunity; it opens doors and creates new possibilities. Matched with the $1,000 cash bonus, these initiatives will have both an immediate and long-term positive impact.”
Wells Fargo & Company (WFC) said it would raise the minimum wage for its team members to $15 per hour and earmark $400 million for philanthropic initiatives in 2018. Some $100 million of that total will be committed to boosting small businesses, while $75 million will support neighborhood revitalization efforts.
“We believe tax reform is good for our U.S. economy and are pleased to take these immediate steps to invest in our team members, communities, small businesses, and homeowners,” said Wells Fargo President and CEO Tim Sloan. “We look forward to identifying additional opportunities for Wells Fargo to invest, as we continue to execute our business strategies and provide long-term value to all our stakeholders.”