No Grinch here: FloraCraft bonus will be paid 25% in cash and 75% via a 401 (k) contribution over two years
The average vacation bonus in 2017 – among workers who actually receive it – was around $ 1,800, according to investigation accountants. But a Ludington, Mich.-Based floral foam maker gives that number an almost Grinch-y appearance, announcing a premium that is expected to average over $ 14,000 per worker.
FloraCrafts, which manufactures, manufactures and markets foam products – those green or white blocks used in floral and craft projects – told employees it would pay out $ 4 million in bonuses. The move comes after a solid year for the company and a tax reform law that reduced corporate taxes. In addition, said Lee Schoenherr, owner of the company, it was inspired by his concerns about political changes in Washington.
FloraCraft’s bonus, which will be paid 25% in cash and 75% via a two-year 401 (k) contribution, comes at the end of a year that began with many companies responding to the Trump tax bill with High-profile ads on a $ 1,000 -time bonus.
Schoenherr, 83, who has run the company since 1973 and is its chairman, said he wanted to do something more “meaningful”.
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He had generally given an extra week’s pay as a vacation bonus to his workers. But Schoenherr had thought for years of giving a substantial gift to the workers as a thank-you.
âI wanted to show some appreciation to the people who worked for me and who were responsible, to a great extent, for the success of the company,â he said.
He decided the time was right in 2018. The tax cut provided a cushion. The company was reaping the rewards of years of investment in research and development that allowed it to make its own foam, rather than buying it outside, CEO Eric Erwin said. (The private, family-owned business doesn’t publish financial figures, but has an annual turnover of $ 70 million.)
Meanwhile, a Pinterest-fueled decorating and craft craze has spurred what Erwin calls the âcreative products industryâ in recent years. âWe’re very happy with how digital content has helped us,â prompting consumers to be more creative with crafts and projects.
Schoenherr said he was also beginning to feel a sense of “urgency” to do the bonus, fearing the business environment would change with Democrats taking a majority in the US House of Representatives. He said his company had benefited from President Trump’s policies, including cutting taxes and eliminating certain regulations, although he was unable to cite specific regulatory changes during his tenure. Trump that would have benefited his business.
âThings are going well now. Who knows what the future holds, âhe said. Schoenherr also admitted that he was not getting any younger. While he says he has no plans to retire at all, he thought “I’d better do it while I’m still alive,” he said.
Workers are only eligible for the bonus if they are below senior management, Erwin said – senior managers participate in an annual incentive program – and the only factor taken into account in paying the bonus is seniority . Workers will receive the equivalent of approximately $ 120 per month of service; because the average tenure in the business is 10 years, that would translate to an average payment of $ 14,400, Erwin said.
Laura Sejen, executive director of Human Capital and Benefits practice at Willis Towers Watson, said such a bonus is unusually large for hourly workers in manufacturing, but it’s easier for Schoenherr to do so because of the size of his business and his controlling interest in it. .
“These are things you can do quite easily if you are a small private company – your hands are not tied by shareholders or formal programs like they are if you are, on the other hand, a global conglomerate,” a- she declared. “It’s very unusual.”
Unusual, perhaps, but not unknown. In 2015, for example, Houston-based oil and gas company Hilcorp paid bonus checks of $ 100,000 to its employees, pro rata based on service time over the past five years, according to the Houston Chronicle. And in 2016, founder of Chobani and CEO Hamdi Ulukaya said he would give all of his 2,000 full-time employees rewards that could be worth up to 10% of the future value of the private business if it goes public or sold, along with a salary average estimated at $ 150,000.