Even as some research suggests that employee bonuses are on the decline, two major financial institutions recently announced they are doling out bonuses to employees.
Wells Fargo is giving out a one-time bonus of $1,000 to some of its employees, while Bank of America (BoA) will give restricted stock bonuses worth a collective $800 million to roughly 97 percent of its staff, according to reports.
The news comes as two recent reports found that year-end bonuses were down in 2023, compared to 2022.
SHRM Online rounded up additional news on the topic, as well as on the state of bonuses in general.
Which Employees Are Getting Bonuses
There are some salary stipulations attached to the bonuses from the banks. Wells Fargo will give $1,000 special cash awards to U.S. employees who were paid less than $75,000 in salary last year, American Banker reported. Eligible employees’ total cash compensation for 2023 must not have exceeded $85,000, according to the publication, and staff also must meet certain job performance and conduct criteria.
Bank of America’s restricted stock bonuses will apply to employees who earn less than $500,000 in total annual pay. It’s the seventh year that BoA has given out restricted stock awards on a wide scale—and the third in which it has included employees who make less than $100,000 annually.
(Banking Dive and American Banker)
Year-End Bonuses Were Down in 2023
In 2023, year-end bonuses were down between 3.8 percent and 36.2 percent from 2022 depending on industry, and down between 12.3 percent and 36.7 percent compared to 2021, according to data from payroll company Gusto, which analyzed data from more than 300,000 clients.
In December, bonuses paid by firms on Gusto’s platform averaged $2,145, a 21 percent decline from the $2,730 average in December 2022. The 2023 amount is also a 40 percent drop from the $3,583 average bonus handed out in December 2019.
The decline is largely the result of a less competitive labor market, meaning employers are feeling less motivated to give big bonuses or pay increases to woo and keep workers. Meanwhile, employers are also feeling the effects of the persistently high cost of living and are growing more cautious about spending.
“Bonuses have gotten smaller over the last two years,” said Liz Wilke, principal economist at Gusto. “That’s been largely driven by the labor market stabilizing and employers feeling squeezed by inflation. Declining bonuses indicate to us that employers are rethinking their aggressive talent acquisition and retention strategies as they look ahead to the next year.”
Economic Fears May Be at Play
In general, the strength of the economy plays into corporate decisions about bonuses, including those awarded during the holiday season, said Eric Cormier, manager of HR services with Insperity, an HR services firm headquartered in Kingwood, Texas. In an interview with SHRM Online in November, Cormier said that although bonuses continue to be awarded by many organizations and can boost employee morale, some employers refrained from bonuses altogether the past couple of years due to fears of a recession.
Mark Cuban to Give Big Bonuses to Dallas Mavericks Employees
Mark Cuban told Dallas Mavericks employees via email in January that they would soon be receiving significant bonuses—worth a cumulative $35 million.
The bonuses come not long after investor Cuban sold his majority stake of the NBA team to casino guru Miriam Adelson and her family, including her son-in-law Patrick Dumont, who is the president and chief operating officer of Las Vegas Sands Corp. Under the deal, which was approved in late December, Cuban will keep partial ownership and is still expected to run basketball operations for the team.
“As a thank you for all your hard work making the Mavs an amazing organization, each of you will be receiving a bonus from myself, and the Adelson and Dumont families,” Cuban’s email to Mavs employees read. “In total we will be paying out approximately $35 plus million dollars in bonuses to you all. To calculate your bonus, we used a framework that took into consideration how long you have worked for the Mavs. You will receive your bonus in the very near future.”
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