Companies attribute employee bonuses to Trump tax cuts
But awaited earnings statements will reveal the real source of the benefits
In one breath, Connection, a publicly traded technology sales and services company based in Merrimack, said it expects to benefit from the Tax Cuts and Jobs Act, signed into law by President Donald Trump last December.
Im another breath, Connection announced that it was giving one-time $1,000 cash bonuses “as a special reward to our valued employees for their hard work and commitment to excellence,” said President and CEO Timothy McGrath.
Both are included in the same press release last week, but whether the two are related is not clear.
If Connection is giving out bonus because of the Tax Act, they would not be alone.
Companies including AT&T, Chipotle Mexican Grill, Comcast, Home Depot, Southwest and Wal-Mart have all announced one-time $1,000 bonuses (about $20 a week before taxes). Anthem is making a $1,000 contribution into workers’ 401Ks.
The White House is touting these bonuses as proof that the Tax Act is improving the life of the average worker. Unions that have been pressuring these companies to share the tax breaks also claim some credit, though they note that most of these employee payouts account for only a fraction of the amount the company benefits.
Connection doesn’t say what impact the tax cut will have and probably won’t until it files its next earnings statement with the Securities and Exchange Commission. Many of these filings will come out next month.
Bottomline Technologies, the Portsmouth financial services provider, said in its earnings release last week that it had already received a $4.2 million benefit from the tax cut, enough to push it into the black last quarter. There was no announcement of any employee pay raises or bonuses.
But not all companies benefited, at least right away. Standex International, a conglomerate based in Salem, said that it estimated an initial $15 million quarterly impact, though in the long run it predicted that the cut will marginally decrease its effective tax rate. The tax cut contributed to a quarterly loss of $2.8 million, despite quarterly revenue increasing more than 20 percent year over year to $210 million.