With new tax legislation in place, Home Depot joins the growing list of corporations who plan to use the legislation to give back to its employees. Companies, such as AT&T, Boeing, Starbucks, and Walmart, have promised higher hourly wages, bonuses, or a combination of the two as a result of the new tax laws. And now, with the new windfall, hourly employees at the home improvement superstore will receive a one-time Home Depot bonus of up to $1,000.
The bonuses work on a sliding scale. All U.S. employees will receive at least $200, though long-term employees will receive larger bonuses. The largest payout should be no more than $1,000. Craig Menear, Chief Executive Officer, says, “this incremental investment in our associates was made possible by the new tax reform bill. We are pleased to be able to provide this additional reward to our associates.”
However, due to the new legislation, taxes tied to offshore earnings will cost the company around $150 million for the fourth quarter. Between the new bonus structure and taxes on offshore earnings, Home Depot’s 2017 move will cost the company 19 cents per share – less than 1/10% by today’s stock price. By fiscal 2018, however, Home Depot expects the impact of the tax reform to be beneficial.
As the retail landscape changes, the company also plans more future investments into their associates. They realize that, as the labor market tightens up, employers are now facing more pressure to incentivize their existing employees. In other words, good help can be hard to find. Wage raises, bonuses, and other perks of the job can keep current employees happy and working hard.
Home Depot Bonus Structure
- Less than 2 years: $200 bonus
- 2 – 4 years: $250 bonus
- 5 – 9 years: $300 bonus
- 10 – 14 years: $400 bonus
- 15 – 19 years: $750 bonus
- 20+ years: $1,000 bonus
Moving Forward
Home Depot will also look to improve their physical store locations. The retailer has earmarked improving the overall customer shopping experience as a priority as well. Ostensibly, the tax reform will help the company accomplish these things, as well as the aforementioned employee benefits.
Home Depot expects to release more details about their plans for future investments toward the end of February.
