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Armageddon Continues

Mike Reed - January 23, 2018

Three more large job, bonus, and/or salary increase announcements from major U.S. employers today because of the Tax Cuts and Jobs Act.

When will the Armageddon end?!

Just today, because of tax reform:

  • Disney announced $1,000 cash bonuses to 125,000 employees.
  • JPMorgan Chase will give 22,000 workers pay hikes, add 400 new branch locations, and boost small business lending and charitable giving.
  • Verizon is giving its employees a total of $400 million in stock in the company.

 

125,000 Disney employees to receive $1,000 cash bonus, company launches new $50 million education program
Michael Sheetz
January 23, 2018
CNBC

  • Disney announces a one-time cash bonus of $1,000 for over 125,000 employees.
  • The company will also make a $50 million investment into a new employee education program.

Disney announced Tuesday it will pay over 125,000 employees a one-time cash bonus of $1,000, as well as make a new $50 million investment into education program for employees.

"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," CEO Bob Iger said in a statement.

Some of the biggest companies in the United States have been giving out bonuses to employees, often citing the recently-passed tax bill as the motive. BoeingAT&TWells FargoComcastBank of America and Walmart are just a few of those distributing new tax benefits to workers.

The bonus applies any full-time and part-time employees who have been working for Disney since before January 1. Those eligible will receive the bonus in two parts, with one in March and the other in September. Executive level employees are exempt.

Disney's education initiative will be available to nearly 88,000 hourly employees in the U.S.

"Participants can pursue qualifying higher education or vocational training, including courses unrelated to their current responsibilities at Disney," the company said in a statement.

It will not affect Disney's ongoing education reimbursement program, the company noted, which will continue to be open to all full-time employees.

 

JP Morgan Chase to build 400 new branches, raise wages because of the tax cut
Liz Moyer
January 23, 2018
CNBC

  • Some 22,000 workers will get hourly pay hikes, with the new pay range from $15 to $18.
  • Chase plans to increase branches by nearly 8 percent with 400 new locations.
  • The bank will also boost small business lending and charitable giving.

J.P. Morgan Chase announced plans to spend $20 billion over five years to raise hourly pay for a portion of its workforce, add jobs and open 400 branches in new U.S. locations.

The bank says tax breaks, reduced regulation and an improved business climate have made it possible to make these changes, which also include adding 4,000 jobs and increasing its charitable giving.

Earlier this month, the bank reported fourth-quarter profit that beat expectations despite a $2.4 billion charge related to the tax cuts and a difficult trading environment for its investment bank.

"Having a healthy, strong company allows us to make these long-term, sustainable investments," said J.P. Morgan CEO Jamie Dimon in a statement Tuesday. "We are excited about further investing in our outstanding workforce and expanding into new U.S. markets."

Several large U.S. companies have announced one-time bonuses, investments in jobs and facilities, and growth plans since the tax overhaul enacted in Washington late last year.

J.P. Morgan has more than 252,000 employees, about half of whom work in its consumer and community banking group. It has a little more than 5,100 branches in 23 states.

Hourly wages for some 22,000 workers will rise to between $15 and $18 in more than 100 cities, the bank said. In New York, San Francisco, Boston and Jersey City, New Jersey, the increase will be at the highest end of that range. Employees are also each getting a $750 bonus later this month.

The branch expansion, which includes 3,000 jobs, will target 15 to 20 new markets in several new states over five years, the bank said. Chase has branches throughout the U.S. but some pockets where it currently does not operate include Washington, D.C., Boston and Philadelphia. Adding 400 locations will boost the number of branches by nearly 8 percent.

The bank also says it will increase small business lending 20 percent, to $4 billion, over three years.

 

Verizon says many workers will receive shares of stock
David Faber & Anita Balakrishnan
January 23, 2018
CNBC

  • Verizon employees (other than top management) will receive 50 shares of restricted stock, the price of which will be set on February 1.
  • Verizon reported mixed quarterly results on Tuesday.
  • Verizon told investors earlier on Tuesday it expects savings from tax reform will add $3.5 billion to $4 billion to its operating cash flow this year.

Verizon says employees (other than top management) will receive 50 shares of restricted stock, the price of which will be set on February 1.

The award could total over $400 million, based on Verizon's current share price. Shares traded around $53 a share on Tuesday, after quarterly earnings were released.

Verizon CEO Lowell McAdam will appear on CNBC's "Fast Money: Halftime Report" in the noon eastern hour.

Tax reform could provide a boon for a company mounting an uneasy transition into the media business.

Verizon told investors earlier on Tuesday it expects savings from tax reform will add $3.5 billion to $4 billion to its operating cash flow this year, boosting earnings by 55 to 65 cents a share for the full year. That's on top of a previously announced one-time increase of about $16.8 billion under the new tax scheme.

It also hinted in its morning earnings report that "employees will further share in the company's success."

 


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