Verizon and Disney announce bonuses for employees

Two more big companies are passing savings from the tax bill along to employees.Verizon said in an internal me...

Posted: Jan 24, 2018 8:38 AM
Updated: Jan 24, 2018 8:38 AM

Two more big companies are passing savings from the tax bill along to employees.

Verizon said in an internal memo Tuesday that it's giving 50 shares of restricted stock, or a cash equivalent, to full-time employees who aren't executives. The amount will be calculated based on Verizon's stock value on February 1.

The company explained that the grant will vest over two years and appreciate with dividend payments.

On Tuesday, Verizon shares closed over $53. At that price, eligible workers who choose the cash equivalent would get more than $2,650 each.

Altogether, Verizon will give about 153,000 of its 155,500 employees the bonus.

"The Verizon Special Award confirms that we're all owners of the business and gives us a chance to create value for ourselves, our customers and our shareholders," the company said in its note to employees.

Verizon teased the news when it reported its fourth quarter earning results Tuesday. The company said it was able to award the bonuses because of the tax bill.

Related: Walmart is raising its minimum wage and handing out tax cut bonuses

"Our employees drive the innovation and success of our business so it's vital that we all share in the success of not only tax reform, but the overall performance of Verizon," CEO Lowell McAdam said on the earnings call.

The tax bill will also allow the company to increase donations to the philanthropic Verizon Foundation, which focuses on funding STEM educational initiatives, by $200 to $300 million over the next two years, McAdam said. He added that the funds will be used to help improving customers' lives with tech.

Verizon employees weren't the only ones who got good news Tuesday.

Disney announced that it will give 125,000 employees a $1,000 cash bonus, thanks to the new tax law. Plus, Disney plans to invest $50 million in a new program that will help cover tuition costs for hourly employees.

Related: Some of the companies giving out raises and bonuses because of tax reform

The Disney bonus will be given to full- and part-time, non-executive employees who have worked for the company since at least January 1 of this year.

"I am proud we are directing approximately $125 million to our cast members and employees across the country," said Disney CEO Bob Iger in a statement.

"These initiatives will have both an immediate and long-term positive impact," he added.

Several companies have handed out bonuses in response to the tax overhaul, which cut the corporate tax rate from 35% to 21%.

Last month, AT&T promised to give qualified employees a $1,000 bonus -- as did American Airlines ,Bank of America and Comcast. Fiat Chrysler promised some workers a one-time $2,000 bonus. And Walmart promised employees a $1,000 bonus, plus higher minimum wages and better benefits.

President Trump has cheered these bonuses and benefits to employees. But others warn against seeing the new law as primarily beneficial to workers.

"This is the greatest gift to corporate America in decades," said Ian Winer, head of equities at Wedbush Securities, of the tax law. "It's far better for investors than it is for employees."

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