With tax cuts, U.S. companies planning worker bonuses

With tax cuts, US companies planning worker bonuses

The ink is barely dry on Congressional Republicans' final version of the tax-cut bill, and already companies are rolling out their own press releases.

AT&T stock was up by 1.22 percent, to $39.02 on the day; Fifth Third stock was up by 1.34 percent, to $30.92 on the day; Comcast was up by 2.48 percent to $40.36; and Boeing was up by 0.36 percent, to $296.84. The legislation, which is now on the move to the President's desk to be signed into law, represents the largest one-time tax reduction in USA history, cutting an estimated $1.46 trillion in overall tax collections by the government.

Boeing said $300 million of investments would move forward, split equally between corporate giving, workforce training and facilities for the aircraft maker's employees.

Fifth Third Bancorp, a regional bank based in Cincinnati, said it will raise the minimum wage for all of its almost 3,000 hourly employees to $15, and would distribute a one-time bonus of $1,000 for more than 13,500 employees by the end of the year if the bill is signed by December 25.

These are just the first out of the gate, and probably won't be the last. If this time around that also means some extra money in workers' pockets, all the better.

AT&T's planned bonus pales in comparison to the benefits it estimates it will get from the Time Warner deal.

Take AT&T and Boeing. The Justice Department is now suing to block a proposed $85 billion merger between AT&T and Time Warner, a deal Trump has objected to as "not good for the country". Airbus SE acquired a majority stake in Bombardier's C Series plane, the Canadian government is choosing to buy used jets over new Boeing products and the United Kingdom has warned Boeing could lose defense contracts there. Neither company needed a tax overhaul to make these investments possible.

Neither Boeing nor AT&T is exactly short on funds.

With these investments, the company expects to add thousands of new direct and indirect jobs.

Alberto Gallo, partner at Algebris Investments, said in a note that the tax cuts "will support growth in 2018, acting as a tailwind to both consumption and capital spending".

Others expressed skepticism and called the announced bonuses a public relations stunt that came off as disingenuous, given the pay gap between average workers and executives, and given the timing of those bonuses that some say were earned through union negotiations.

The bank has also been in Trump's sights after employees created fraudulent customer accounts that led to a $100 million fine by the Consumer Financial Protection Bureau.

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