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Entries in Bonuses (5)

Thursday
Apr182013

CEO Gives Away Bonus to Employees

Courtesy Next Media(LONDON) -- "Good Lord!" says the headline in a British newspaper, praising business leader Lord Wolfson, for having been uncommonly generous.

Wolfson, CEO of Next, the U.K.'s biggest department store chain, gave his entire annual bonus — $3.6 million — to his employees.

How uncommon was his gesture?

ABC News could not find another example of a CEO of a public company who has done the same in recent years, either in the U.K. or in the U.S.

The closest we found was from academia: Lou Anna Simon, president of Michigan State University, who last year gave her $100,000 annual retention bonus back to MSU, according to the Lansing State Journal.

A few U.S. CEOs have donated their bonuses to charity. John Mackey, head of Whole Foods, donated his 2009 bonus of nearly $380,000 to the Global Animal Partnership, according to Philanthropy Today.

But in the U.S. no CEO of a public company, so far as we could find, has recently given his bonus back to his employees. That's not to say some CEOs haven't foregone what's due them. Just last week a judge nixed a $20 million severance deal for Tom Horton, CEO of American Airlines.

Nor has any CEO in the U.K, other than Wolfson, according to Alistair Mackinnon-Munson, a spokesperson for Next. "It's the first time that any chief executive has ever done anything like this," he confirms. "All our staff of 19,400 will share in it as a cash bonus. It works out to about 1 percent of their basic salary."

The reaction from Next employees has been positive. "We've gotten tweets from staff," he tells ABC News.

According to the Daily Telegraph, Wolfson sent an email to Next employees in which he explained his action. The Telegraph quotes Wolfson as saying that his donation of his bonus was "a gesture of thanks and appreciation...for the hard work and commitment you have given to Next over the past three years and through some very tough times." He said, too, "I remain very grateful for the way in which everyone has helped to navigate our business through this recession."

In the U.K., public reaction to Wolfson's gesture has been positive -- so much so that commentators have speculated there now will be pressure on other English CEOs to do likewise.

How do unions view Wolfson's act? Next's spokesman says the unions representing Next workers have been silent.

As for U.S. unions, the one that represents the most department store workers will not be sending Wolfson a bouquet.

Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union (RWDSU), tells ABC News he couldn't care less that Wolfson has donated his bonus. He likens it to John D. Rockefeller's having handed out dimes to strangers, to curry public favor.

"Working people," says Appelbaum, "do not want charity. They need guaranteed wages and benefits -- the kind that come with a union contract. They shouldn't be forced to hope that their employer will have a momentary impulse -- a munificent impulse -- to share his massive wealth."

The RWDSU represents Macy's workers, among others. Says Appelbaum, "We don't need the head of Macy's to turn over his bonus to his employees. We want him to recognize that his employees need to be treated with dignity."

Copyright 2013 ABC News Radio

Monday
Jul232012

CEO of Lenovo Gives $3 Million in Bonuses to Employees

Lenovo(NEW YORK) -- Lenovo CEO Yang Yuanqing has decided to use a $3 million bonus he received for the company’s record-setting year to reward thousands of the company’s rank-and-file employees.

The 47-year-old gave around 10,000 employees worldwide bonus checks for their hard work, Lenovo spokesman Jeffrey Shafer said.

The computer company announced its fourth quarter earnings in May. According to a press release, net profit for the company rose 73 percent year over year. The brand’s global PC sales rose by 35 percent year over year.

The employees, who worked in different areas of the company -- from manufacturing to administration to other non-management positions, each received around $300 as a part of Yuanqing’s generosity.

“We ended the year as the number two PC maker,” Shafer said. “Yuanqing felt that he was rewarded well simply as the owner of the company," said Shafer, who noted Yuanqing owns about 8 percent of the company.

Shafer said the CEO felt like it was the right thing to do to, “redirect [the money] to the employees as a real tangible gesture” for their efforts.

Copyright 2012 ABC News Radio

Monday
Feb202012

Union Workers' Bonuses Boost Economy

Stephen Morton/Bloomberg via Getty Images(DETROIT) -- At last: bonuses for ordinary Joes, not Wall Street wheeler-dealers. Union workers at GM, Ford, Chrysler and Boeing are seeing bonus checks of up to $7,000 each.

That money, in turn, is helping boost economies in Detroit, Seattle, Charleston and other cities. The payouts come on the heels of improved or record corporate profits.

GM, which went bankrupt in 2009, reported 2011 net income of $9.19 billion on Thursday, an all-time high for the company. Starting in March, part of that profit will go to 47,500 members of the United Auto Workers in checks of up to $7,000 each, according to the Detroit Free Press.

The Lansing State Journal says that 4,690 unionized hourly workers at GM's Lansing facilities will get a total bonus of $32.8 million, a strong boost to the capital city's economy.

Ford and Chrysler also are paying bonuses.

About 26,000 union workers got checks averaging $1,500 at Chrysler earlier this month. Ford, which reported a $20.2 billion profit last year, will pay its workers an average $2,450 starting in mid-March. Ford workers earlier received $3,750, profit-sharing for the first half of 2011.

The windfall might be enough to lift the economy of the Midwest, especially states such as Michigan, Ohio and Kentucky, which are home to union auto factories, economists say. States dependent on the auto industry have already been improving faster than the U.S. economy in general.

Federal Reserve Board data predict Michigan will outperform all other states economically for the next six months.

Donald Grimes, a University of Michigan research specialist who follows labor and the economy, said such performance is the flip-side of the great recession's auto bust. "This is a reversal of the first half of the 2000s, when Michigan and other auto states bore the brunt of the downturn," he told Bloomberg News. "Now, they're getting a bigger share of the recovery."

The bonuses are a dramatic change from the recent past. GM paid no bonuses whatsoever to its union workers from 2005 to 2010. In all but two of those years, Ford and Chrysler paid no bonus, according to Michigan's Center for automotive Research.

Boeing's net income in the fourth quarter improved 20 percent to almost $1.4 billion. Workers in Seattle and in Charleston, S.C., including members of the International Association of Machinists and Aerospace Workers, got their bonuses before Christmas.

About 29,000 machinists in the Seattle-Tacoma region saw checks of $3,500 to $4,000 each. Economist Dick Conway told the Seattle Times the payments would inject $217.5 million into the local economy. In Charleston, bonus checks went to 4,500 Boeing workers.

Retailers, hoping to cash in, have introduced marketing programs aimed at newly prosperous workers. In Michigan, Art Van, the state's largest furniture store chain, has a special promotion aimed at GM workers.

There's plenty of pent-up demand for spending on wants, instead of needs, a store spokeswoman told Bloomberg News. "Many folks," she said, "are beginning to replace furniture, carpet and televisions."

Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass., calls the bonus payments a significant development nationally for labor-management relations.

"Over the past decade," he said, "workers in perhaps a third of contract negotiations did get bonuses, but of a different type: 'signing' bonuses of anywhere from $500 to $7,000 if they ratified collective agreements with wage freezes or cuts."

Profit-sharing bonuses of the kind being paid now by the Big Three are considerably rarer.

For most union workers in the United States, Chaison says, a traditional percentage increase is still the norm. The change at GM, Ford and Chrysler is significant because, "the auto makers and the UAW are the big-timers, when it comes to negotiation. They're the trend-setters."

"What happens in autos usually gets copied in heavy manufacturing in general," he said, "and then in smaller manufacturing."

Copyright 2012 ABC News Radio

Tuesday
Jan242012

Bank of America Investment Bankers to Get 25% Pay Cut

Jin Lee/Bloomberg via Getty Images(CHARLOTTE, N.C.) -- Investment bankers at Bank of America are the latest traders to get news of deep pay cuts at Wall Street firms. The investment bankers at the Charlotte, N.C.-based company were told to expect lower compensation packages by 25 percent, the latest dour news this bonus season, as reported by Bloomberg.

Bank of America reported earnings of $2 billion in the last three months of 2011, up from a net loss of $1.2 billion in the same period a year ago, boosted in part from a one-time gain on the sale of China Construction Bank. During a conference call last week, Bank of America's CEO, Brian Moynihan, revealed the failed plan to impose a $5 debit card monthly fee contributed to a 20-percent increase in closed accounts in the last three months of 2011.

Copyright 2012 ABC News Radio

Monday
Jan092012

Wall Street Bonuses May Reach Lowest Level in Years

Hemera/Thinkstock(NEW YORK) -- Wall Street banks will announce their annual compensation and bonuses starting this month, and forecasts are generally expecting cutbacks across the board, though the rewards will still be rich at least by non-1 percenter standards.

"Obviously this is not a good year for Wall Street compensation and an awful lot of the pressure is going to fall on managing directors," Brad Hintz, research analyst with Sanford C. Bernstein & Co., who said lower compensation -- largely paid from stock -- and volatility in the markets will lead to higher turnover and attrition.

Hintz said bankers in the fixed income market and credit trading will be most affected.

"Becoming a partner at a Wall Street firm is very much like becoming an NFL lineman," he said, in reference to their job's lifespan of five or six years. "After a while, your knees go and you're politely shown the door."

Employees of the biggest Wall Street banks could see compensation sink 27 to 30 percent from a year ago to the lowest level since the 2008 financial crisis, executive consulting firm Options Group reported. Johnson Associates forecasts that Wall Street bonuses may decrease by an average of 20 to 30 percent from 2010, with sharper declines for bond traders, compensation consulting firm reported in November.

A large number of the 400 partners and Goldman Sachs could see pay cuts in 2011 by half from those of 2010, the Wall Street Journal reported Monday. As banks report their year-end results, total compensation may be the lowest since 2008, the Journal reported.

Embattled Swiss bank Credit Suisse may cut bonuses by 40 percent, Swiss newspaper Der Sonntag reported.

Executives at investment bank Jefferies, based in New York City elected not to receive any bonuses this year, including CEO Richard Handler, aligning themselves with shareholders and their "tough year." Several employees were reportedly disgruntled with their pay but have since completed negotiations, the Wall Street Journal reported. A spokesman for Jefferies said the bank had no comment.

While companies across the U.S. have been subject to a volatile economic environment over concerns about Europe's debt crisis and unemployment here, employees are steeling to see how that may affect bonuses and compensation. According to professional services company Towers Watson, a majority of North American companies overall, not limited to the finance sector, expect to pay executive bonuses that are as large as or larger than last year's, a survey of 265 mid-size and large publicly traded companies showed.

Bonuses grew larger and became more prevalent across industries during last bonus season. Median total bonus payouts for S&P 500 CEOs increased to $2,150,000 in 2010, up 43.3 percent from the 2009 median of $1,500,000, Equilar, an executive compensation data firm, reported in May. Bonuses this year may or may not continue the previous upward trend. In 2010, 85.1 percent of CEOs received an annual bonus payout, compared with 73.6 percent in 2009.

JPMorgan Chase will disclose compensation figures in its fourth quarter and year-end earnings statement, scheduled to be released on Friday. The bank generally pays bonuses four to six weeks into its first quarter.

Financial services and technology companies had the largest increase in median total compensation for CEOs, rising 31.3 percent and 60.5 percent, respectively, from 2009 to 2010. Executives in the basic materials industry had the highest median total compensation of $9.9 million; they were the highest-paid executives by industry last year.

But The New Bottom Line, a coalition of local, state and national grassroots organizing groups gathered on behalf of struggling and middle-class communities, published a report forecasting the biggest banks by assets will pay high bonuses and compensation.

"Whether it's $180 or billion or $150 billion, there are billions of dollars going to executives who crashed the economy," Tracy Van Slyke, co-director of The New Bottom Line, said," when instead they should be reducing the principal for all underwater homeowners and paying their fair share of taxes."

Van Slyke forecasts the six largest banks will have a near record year of bonuses and compensation.

The report projects total bonus and compensation for Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs will total $146.7 billion for 2011. The actual previous high was $146.8 billion in 2007 for the same banks, which included banks that have since been acquired, like Washington Mutual and Merrill Lynch, by the biggest firms.  

Copyright 2012 ABC News Radio







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