Roughly 145,000 Bank of America employees will be getting an extra holiday gift this year.
Bank of America CEO Brian Moynihan announced in a memo to staff that, thanks to a hefty corporate tax cut included in the tax bill signed into law by President Donald Trump Friday, Bank of America would distribute some of its savings among staff “in the spirit of shared success,” CNBC reports.
All U.S. employees who make $150,000 or less annually will receive a $1,000 bonus before the end of the year, according to the memo.
The tax cut cited by Moynihan, part of a far-reaching, $1.5 trillion overhaul of the U.S. tax system, reduces corporation’s tax rate by 14% — from 35% down to 21%. As a result, large companies such as Bank of America stand to gain quite a bit, prompting big names including AT&T, Comcast and Wells Fargo to promise workers holiday bonuses.
Wealthy Americans will also see significant tax cuts from the new tax reform, while members of the middle and lower classes will see smaller cuts.
The full text of the Bank of America memo, which was obtained by CNBC, reads:
To my teammates:
As we approach the end of the year and another holiday season with family and friends, it’s a good time to recall the progress we made this year in living our purpose: To help make financial lives better through the power of every connection. We did this the right way, through responsible growth.
Through the third quarter, we have earned $15.7 billion – an improvement of nearly 20 percent from 2016 – by focusing on our customers and clients, managing risk, and doing it in a sustainable way.
As we have discussed often, sustainability has many dimensions. Sustainability includes all of our ESG work, including responsible corporate governance, and our $125 billion environmental initiative. At the end of this year, we’ll be nearly halfway through that 10-year goal, which we announced in 2015. Sustainability includes the many ways we share our success with the communities we serve, through our $200 million in philanthropy and the more than 2 million hours of time you and your teammates volunteer to help worthy causes we care about. Sustainability also means operational excellence, continuing to improve our company and reinvesting those savings into future capabilities.
Another dimension of sustainability is our commitment to be a great place to work. We focused on that in many areas this year. In February, we crossed the $15 per hour level after years of regular increases in the starting compensation level for U.S. teammates, a level we’ve seen other companies start to match more recently. We will continue to review and adjust that as part of our commitment to fair and equitable compensation for all of our teammates. We also kept our 2017 annual medical premium increases below the national average and lower than many other large companies, and will do so again in 2018. We have taken a long-term approach to managing this program. For U.S. employees making less than $50,000 a year, we decided in 2010 to reduce annual medical premiums for 2011 by 50 percent for family coverage and have kept premiums flat for six consecutive years. For employees making between $50,000 and $100,000 per year, we reduced the premiums by 15 percent in 2011 and have kept premium growth well below the national trend.
Also this year, in October we adopted an extended bereavement policy to provide up to 20 days paid time for the loss of a spouse/partner or child. This follows our 2016 industry-leading expansion of paid parental leave to 16 weeks. Together with these improvements, teammates in 2017 also derived significant benefits from our leading programs for career development and learning, wellness, diversity and inclusion and support for life events during moments that matter most. We saw too many such events this year between man-made and natural disasters, but we also saw how much we accomplished by coming together as a team to help each other, and help our clients and communities.
Against the backdrop of the progress we made this year, I want to highlight the December 20 passage in the United States Congress of the most fundamental tax reform since 1986. When the legislation is signed into law by the President, these reforms will impact our company in different ways. For instance, we will see an immediate reduction in earnings as a result of a write-down of the value of our deferred tax asset. Beginning in 2018, we will see benefits from the tax reform, too, in the form of lower corporate tax rates.
In the spirit of shared success, we intend to pass some of those benefits along immediately. U.S. employees making up to $150,000 per year in total compensation – about 145,000 teammates – will receive a one-time bonus of $1,000 by year-end.
We also continue to see the benefits from economic growth in the United States, the EU area, and Asia, including additional lending and rising U.S. interest rates. Combined with the lower tax expense, we may have the opportunity to accelerate investments we are making in many areas, including:
• Accelerate both the consumer capabilities build-out in Indianapolis, Pittsburgh, Minneapolis, Denver, and other key markets where we serve clients but lack an extensive financial center network, and the refresh of financial centers elsewhere
• More accelerated Wi-Fi expansion for those parts of our financial center network without it
• Greater technology spend to continue to improve our mobile, digital, and AI-assisted capabilities, including Zelle and Erica
• Continued electronification of our Global Markets sales and trading capabilities
We have work ahead to continue to drive responsible growth, deliver results, and continue to share our success. We made great progress this year, and we will continue that next year I’m sure. Enjoy the holiday season, get some rest, and let’s look forward to a strong 2018.