Delta Air Lines to Award Employees Huge Bonus in February

Kathy Gurchiek By Kathy Gurchiek January 22, 2020
Delta Airlines

​Delta Air Lines employees will receive profit-sharing bonuses next month that are equivalent to an additional two months of pay, the company announced Jan. 21.

All eligible employees will get a check next month for 16.6 percent of their annual salary. The only workers excluded from the profit-sharing plan, CNN reported, are the company's officers, directors and general managers; they will, however, be paid performance-based bonuses.

Full-time and part-time workers, whether or not they are union members, will receive a bonus. 

"Delta would be nothing without our 90,000 people. They deserve all the credit," Delta CEO Ed Bastian said on LinkedIn. The company has made Fortune magazine's list of 100 best companies to work for the last three years. 

SHRM Online collected the following articles on bonuses and profit-sharing. 

Delta Giving Its Employees 2 Months of Extra Pay

Delta Air Lines announced it would pay its workers $1.6 billion in profit-sharing bonuses as a thank you for their contribution to the company's strong performance in 2019. It's a business decision that can pay dividends in company loyalty, productivity and retention. "Research shows that cash profit-sharing plans, combined with a supportive corporate culture that encourages employees to offer suggestions and participate in solving company problems, can reduce turnover and improve corporate performance and personal motivation," said Joseph Blasi. He is director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University.
(CNN Business)  

Maryland Real Estate Company Surprised Workers with $10 Million Bonus 

Christmas came early in 2019 for the 198 employees at St. John Properties in Maryland. Company founder and chairman Edward St. John announced during the company's annual holiday party on Dec. 7 that they would share in a $10 million bonus—an average of $50,000 per employee. Bonuses will vary based on years of service. The gift—which is in addition to a year-end bonus—celebrates the company's goal of developing 20 million square feet of office, retail and other commercial real estate space in eight states.
(USA Today)    

[SHRM members-only HR form: Bonus Award Letter

Disney Heir Calls on Company to Give 50% of Exec Bonuses to Lowest-Paid Employees 

In April 2019, Abigail Disney—granddaughter of Roy Disney, co-founder of the Disney company—created a stir when she proposed distributing half of what she called the "insane" bonuses paid to its top executives to those in the bottom 10 percent of its wage-earners. "I believe that Disney could well lead the way, if its leaders so chose, to a more decent, humane way of doing business," she wrote in an opinion piece that appeared in the Washington Post.

Bonuses Drop, Signaling Tax-Cut Payouts Were a One-Time Windfall 

A boom in employee bonuses handed out by some companies in the wake of the 2017 Republican tax cut proved to be temporary, Labor Department data released Jan. 21 showed. Private-sector companies' spending on nonproduction bonuses fell 24% in the first quarter of 2019 from a year earlier, the largest decrease for the category of benefit costs on record back to 2005.
(Wall Street Journal)   

Profit Sharing

Profit sharing refers to companies distributing a portion of their profits to their employees. For small businesses, profit sharing provides an important means of increasing employee loyalty and tying employee compensation to company performance. Profit sharing is a particularly attractive option for newer small businesses with uncertain profit levels, as it allows business owners to share the wealth during good times without obligating them to do so during lean years. Profit-sharing also includes some potential pitfalls. 
(Encyclopedia of Small Business)   

Tax Rules of Employee Gifts and Company Parties

As a general rule, an employer can't really give you a "gift" under the tax code. With only a couple of exceptions, the IRS considers anything your employer gives you to be taxable compensation for your services. Here's what employers and employees should know.


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