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Delta has high expectations for 2020 0:59
(CNN Business) - Delta Air Lines had a very good year last year. Instead of verbally thanking his employees for the company's strong performance, he announced that he would pay them $ 1.6 billion in profit-sharing bonuses.
That means that each eligible employee will receive a check next month for 16.6% of their annual salary, which is the equivalent of an additional two-month payment.
“Delta would be nothing without our 90,000 people. They deserve all the credit, ”said Delta CEO Ed Bastian on LinkedIn.
The payment of earnings to employees for 2019 is a record amount. It is also the sixth consecutive year that the company has paid more than $ 1 billion to workers, a Delta spokesman said. The profit sharing plan began in 2012, after the merger of Delta with Northwest.
The company's profit-sharing bonus is above all other financial benefits that it normally provides to employees, such as an equal contribution to the 401 (k) pension fund and other bonus programs for grassroots workers, according to the spokesman.
Full-time and part-time workers, whether unionized or not, will receive checks. The only people excluded from the profit sharing plan are the company's officers, directors and general managers, although they will be paid their own performance-based bonuses.
Payment to Delta employees is good business, said Joseph Blasi, director of the Institute for the Study of Employee Property and Participation in Earnings at Rutgers University.
“Research shows that cash-share participation 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. "
Direct cash payments are not the only way companies can share profits with workers. Some make contributions of profit sharing to workers' retirement accounts or pay them in stock.
Profit sharing is a way of demonstrating what the members of the Business Roundtable have said is the purpose of a corporation: to serve all stakeholders, including employees.
“For years, Wall Street hit me. They thought the profits were theirs ... [But] Wall Street has really closed the circle and realized that Delta is the most awarded airline by its employees. And they are happy to make sure our employees know, ”Bastian said at a local chamber of commerce event in Marietta, Georgia, last week.
Delta is not the only company that offers a profit sharing plan in cash. But such plans are more common in the airline and car industries, Blasi said.
Since 2015, GM, Ford and Fiat Chrysler, for example, issued nearly $ 5 billion in combined checks to their workers, which is the equivalent of six months of extra pay per employee, according to Automotive News.
However, such high payments are not the norm.
According to a 2018 survey conducted by the National Opinion Research Center at the University of Chicago, 38% of adult workers in the US They said they receive a share in the cash earnings, but the average amount reported was only US $ 2000, or 5% of the payment.
Delta Air Lines