Waste Management CEO: Tax cut bonus good for employee retention, more could come
- Waste Management CEO Jim Fish, during a Jan. 12 interview on Fox Business, characterized the company's recent announcement of $2,000 bonuses for an estimated 34,000 employees as a new way to improve retention and hinted that future wage increases or other bonuses could be possible. "We will continue to spend money on our people," he said.
- The interview was prefaced by a clip of House Minority Leader Nancy Pelosi dismissing such bonuses as "insignificant" compared to the pay-outs that executives and shareholders will see from the recent tax cut. "In terms of the bonus that corporate America received versus the crumbs that they are giving to workers to kind of put the schmooze on is so pathetic," said Pelosi.
- When asked by Fox Business' Liz Claman for his response to Pelosi, Fish described this as "important" to employees such as drivers, helpers, MRF sorters, landfill workers and customer service agents that may make between $40-60,000 per year. As for shareholders, Fish said he hadn't received any pushback so far. "I view a well-thought-out investment in our people as being a good investment for shareholders too," he said.
Last week, Waste Management joined the growing list of companies to announce bonuses or other incentives for employees since President Trump signed legislation reducing the corporate tax rate to 21%. The estimated $68 million package will cover all of Waste Management's hourly and salaried employees not already on bonus or sales incentive plans. They will be receiving the money in December.
As noted by Fish, employee turnover is still too common during the first two years. That process is both disruptive and expensive to any company's operations. This has become especially urgent as the commercial driver shortage grows, leading the industry to try a range of new approaches for hiring and recruitment. In some markets starting pay has already been increased for drivers, mechanics and other high-demand positions.
Aside from positive optics, and possible retention benefits, Fish also described the move as a way to boost earnings. Economic growth often leads to higher waste volumes, and more profits in turn.
"Whatever benefits the economy benefits us," said Fish. "So if we inject $68 million into the economy it helps the economy and that helps our business."
More details will be known about the effects of this tax cut when the industry's publicly traded companies host their quarterly earnings calls next month. Fish and his fellow CEOs were very supportive of the tax cut leading up to its Dec. 2017 passage. Others have projected that such a cut would lead to increased acquisition activity, which has already begun to bear out with multiple announcements in the early weeks of 2018.
Such activity will likely have a large benefit to high-income shareholders and executives, as Pelosi and some tax analysts have suggested. Whether these benefits will also reach front-line workers, beyond one-time bonuses, will become more clear in the coming months and years.
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