Feb 05, 2018

Tax Reform Keeps Working: Lowe’s, Hostess Brands, Cigna, UPS & Best Buy Reward Workers – Exxon to Invest Additional $35 Billion in U.S.

Post by Freedom Partners

The Department of Labor issued a report last week announcing historically low unemployment levels helping to fuel some of the highest worker wages in nearly a decade. But these figures only account for 2017.

Paired with the great strides Congress and the Trump administration have made in dismantling many of the great barriers to opportunity and growth imposed by Obama-era regulations, the pro-growth Tax Cuts and Jobs Act is already giving businesses both large and small the ability to help millions of hardworking Americans – and ultimately the communities they serve.

View The Full List Of Businesses From Around The Country Announcing Higher Wages, Bigger Paychecks, More Jobs And Billions Of Dollars In New Investments

Exxon Mobile

CNBC: “Exxon Mobil Announces $35 Billion In New US Investments Over 5 Years, Citing Tax Reform”

Exxon Mobil, the world’s largest publicly traded oil company, on Monday said it plans to invest an additional $35 billion in the United States over the next five years.

Darren Woods, chairman and CEO of Exxon, said in a blog post that the investment is partly due to recently passed corporate tax cuts. The announcement puts Exxon on the board with a number of other companies that have announced employee bonuses and investments following President Donald Trump and GOP lawmakers’ tax overhaul.

“These investments are underpinned by the unique strengths of our company and enhanced by the historic tax reform recently signed into law,” Woods said in the blog post.

“These positive developments will mean more jobs and economic expansion across the United States in a myriad of industries.” (Tom DiChristopher, “Exxon Mobil announces $35 billion in new US investments over 5 years, citing tax reform,” CNBC, 1/29/18)

Lowe’s

CNBC: “Lowe’s To Give Some Employees Bonuses Of Up To $1,000 And Expand Benefits Due To Tax Reform”

Lowe’s will follow rival Home Depot in giving thousands of its hourly employees a one-time bonus of up to $1,000 due to new tax legislation, according to an internal company memo reviewed by CNBC on Wednesday.

The bonuses will be based on an employee’s length of service with Lowe’s, and more than 260,000 part- and full-time individuals are set to receive the payouts, the company said. Lowe’s declined to comment on how the bonuses would be broken out based on tenure.

Effective May 1, Lowe’s will also be expanding its benefits package for full-time workers to include paid maternity leave for 10 weeks, paid parental leave for two weeks, adoption assistance of up to $5,000, and faster eligibility for health benefits, the memo said. (Lauren Thomas, “Lowe’s To Give Some Employees Bonuses Of Up To $1,000 And Expand Benefits Due To Tax Reform,” CNBC, 1/31/18)

Hostess Brand 

Bloomberg: “Hostess Brands Inc., Feeling Flush After Last Month’s Tax Overhaul, Will Offer Bonuses To Workers”

Hostess Brands Inc., feeling flush after last month’s tax overhaul, will offer bonuses to workers — including free snacks. 

The company, which makes Twinkies, Ding Dongs and Ho Hos, is providing its employees one-time payments of $1,250 — with $750 in cash and $500 in the form of a 401(k) contribution. In taking the step, Hostess cited last month’s tax legislation, which slashed the rate for U.S. corporations …

… At Hostess, Executive Chairman C. Dean Metropoulos said he expects to invest further in employees as the company evaluates its tax windfall. 

“The recent tax reform changes have given us the opportunity to review our benefit and compensation structure,” he said in a statement. “The company’s management and board take great pleasure in sharing the company’s success with our employees.” (By Nick Turner & Craig Giammona, “Twinkie Maker’s Response to the Trump Tax Overhaul: Free Snacks,” Bloomberg, 1/31/18)

Best Buy

Associated Press: “Best Buy To Hand Out Bonuses To Workers”

“Best Buy Co., the nation’s largest consumer electronics retailer, says it will be handing out bonuses to more than 100,000 employees, joining a list of companies sharing a portion of their windfall from the corporate tax reform law with employees.

“The Minneapolis-based chain says that this month it will pay one-time bonuses of $1,000 to full-time workers and $500 to part-time employees.” (Anne D’Innocenzio, “Best Buy to hand out bonuses to workers,” Associated Press, 2/2/18)

Cigna

Washington Examiner: “Cigna Raises Wages, Benefits Following Tax Law”

Health insurer Cigna announced Thursday it will increase the minimum wage for its employees to $16 an hour and raise contributions to retirement accounts thanks to the passage of the Republican tax law signed by President Trump late last year.

The total cost invested in higher wages, mostly for frontline employees, will be $15 million, and $30 million for its additional 1 percent match to the 401(k) program. Cigna credited the freed up funds with the tax law, which reduced the corporate tax rate from 35 percent to 21 percent.

More than 30,000 of the company’s workers are expected to benefit from the increased contribution to retirement funds. (Kimberly Leonard, ““Cigna Raises Wages, Benefits Following Tax Law,” Washington Examiner, 2/1/18) 

UPS

Atlanta Business Chronicle: “UPS Uses Tax Reform To Boost ‘Smart Logistics Network,’ Pensions By $12 Billion”

UPS is putting its savings from the upcoming tax cuts to use in a slightly different way than other Georgia-based companies. 

The United Parcel Service Inc. said Thursday that the money is going toward boosting more than $12 billion in investments to “expand the company’s Smart Logistics Network, significantly increase pension funding, and position the company to further enhance shareowner value.”

“This $12 billion investment program is an outgrowth of the opportunity for tax savings created by the Tax and Jobs Act,” said David Abney, UPS Chairman and CEO, in a news release. “We will increase network investments and accelerate pension funding to strengthen the company for the long term, so that we maximize the benefit to our global customers, employees and shareowners.” (Eric Mandel, “UPS uses tax reform to boost ‘Smart Logistics Network,’ pensions by $12 billion,” Atlanta Business Chronicle, 2/2/18)

The New York Times reported earlier this month that “a wave of optimism” is starting to wake up the “animal spirits” of businesses and open the flood gates to new investments, higher wages and more jobs as a result of the new tax law, as well as the Trump administration’s bold efforts to dismantle the many Obama regulatory barriers harming opportunity and growth.