Apple Gives Employees $2,500 Bonuses After New Tax Law (bloomberg.com)

Apple told employees that it's issuing a bonus of $2,500 of restricted stock units, following the introduction of the new U.S. tax law. "The iPhone maker will begin issuing grants to most employees worldwide in the coming months," reports Bloomberg. Apple also announced today that it would bring back most of its cash from overseas and spend $30 billion in the U.S. over the next five years. From the report: Apple confirmed the bonuses in response to a Bloomberg inquiry Wednesday. The Cupertino, California-based company joins a growing list of American businesses that have celebrated the introduction of corporate-friendly tax law with one-time bonuses for staff. AT&T, Comcast, JetBlue, and Wal-Mart also said they were giving bonuses.

Comments

Re:Why?

[quantaman]

Can any corporate finance experts explain why companies would do this? Should we buy that they're just being generous/trying to foster goodwill?

IANACFE but...

The tax cut is awesome for corporations, and their major shareholders in particular.

But, it's also extremely unpopular because it's generally considered a handout to corporations at the expense of average people, and that creates two problems.

1) Employees realize the company got a massive pile of cash and can feel resentful that they didn't get any. Resentful employees are employees who might look for work elsewhere.
2) Nationally the tax bill is unpopular, and there's a decent chance that in 4 years Democrats have a super-majority and choose to kill it.

So you give your employees a raise, or better yet, a one-off bonus. The employees stop feeling resentful and you help change the national narrative which helps keep your cheap tax rate around in 4 years.

Re: Why?

[Time_Ngler]

Did the GOP trick Obama into not vetoing it?

Re:Uh-oh, you know what this means

[jwhyche]

So lets look at your original statement here.

So far, every single company that has announced employee bonuses thanks to the tax bill has followed with an announcement of layoffs shortly afterward. In some cases, the dollar savings of the layoffs almost exactly matched the dollar cost of the bonuses.

Which is a pretty broad statement, leading to me to call bullshit, and asking you to cite your sources. What I get is 4 articles about 3 companies that have laid off employees while giving bonus to others. I also requested credible sources, I'm not sure that Vice qualifies but we'll let it slide.

Now then, you calm that in some cases the dollar savings by the layoffs almost exactly match the dollar cost of the bonus. Yet, in none of the articles do they give numbers for you to reach that conclusion. Vice tosses some numbers around but those seem to be just guesses. Vice tosses around a number like 4,000 but the real number seems to be closer to 700 in AT&T case. Plus the fact that Comcast is giving bonuses to the people it laid off clearly shows that your assessment is in error. So that part of your statement is wrong.

Now then. You state that every single company that has give an bonus as also announce a massive layoff. But yet SuperKendall has posted a link to over a 100 companies giving "Trump Bonus." So unless you can provide evidence showing each and everyone of those companies is having a massive layoff that part of your statement is false too.

So basically Bullshit was the correct call. Any questions?

Good Employee-Employer Relations

[pubwvj]

This makes good sense. Apple's getting a windfall from the tax law changes and they're spreading the good cheer. Some of that money goes to employees which makes employees more loyal and more likely to stay and do well at Apple. Most of that money will likely go to Apple's research and development and other initiatives that drive their company. A lot of that spending will be in the USA which is why the politicians wanted to make the change to the laws. This brings home (to the USA) a lot of cash. Good for the USA. Maybe not so good for some other countries. Winners and Losers in everything.

Re:Why?

[dgatwood]

Also, $2,500 is pretty sad.

It probably means a lot more to all those sweatshop workers making iphone parts... oh, wait, they aren't Apple employees, are they? Too bad, kids! Get back to work.

No, but it probably will mean a lot to people working in Apple stores, Apple's corporate cafes, other non-engineering personnel, etc. For the engineers, not so much.