CEO Gives Away Bonus to Employees
Courtesy Next Media(LONDON) — “Good Lord!” says the headline in a British newspaper, praising business leader Lord Wolfson, for having been uncommonly generous.
Wolfson, CEO of Next, the U.K.’s biggest department store chain, gave his entire annual bonus — $3.6 million — to his employees.
How uncommon was his gesture?
ABC News could not find another example of a CEO of a public company who has done the same in recent years, either in the U.K. or in the U.S.
The closest we found was from academia: Lou Anna Simon, president of Michigan State University, who last year gave her $100,000 annual retention bonus back to MSU, according to the Lansing State Journal.
A few U.S. CEOs have donated their bonuses to charity. John Mackey, head of Whole Foods, donated his 2009 bonus of nearly $380,000 to the Global Animal Partnership, according to Philanthropy Today.
But in the U.S. no CEO of a public company, so far as we could find, has recently given his bonus back to his employees. That’s not to say some CEOs haven’t foregone what’s due them. Just last week a judge nixed a $20 million severance deal for Tom Horton, CEO of American Airlines.
Nor has any CEO in the U.K, other than Wolfson, according to Alistair Mackinnon-Munson, a spokesperson for Next. “It’s the first time that any chief executive has ever done anything like this,” he confirms. “All our staff of 19,400 will share in it as a cash bonus. It works out to about 1 percent of their basic salary.”
The reaction from Next employees has been positive. “We’ve gotten tweets from staff,” he tells ABC News.
According to the Daily Telegraph, Wolfson sent an email to Next employees in which he explained his action. The Telegraph quotes Wolfson as saying that his donation of his bonus was “a gesture of thanks and appreciation…for the hard work and commitment you have given to Next over the past three years and through some very tough times.” He said, too, “I remain very grateful for the way in which everyone has helped to navigate our business through this recession.”
In the U.K., public reaction to Wolfson’s gesture has been positive — so much so that commentators have speculated there now will be pressure on other English CEOs to do likewise.
How do unions view Wolfson’s act? Next’s spokesman says the unions representing Next workers have been silent.
As for U.S. unions, the one that represents the most department store workers will not be sending Wolfson a bouquet.
Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union (RWDSU), tells ABC News he couldn’t care less that Wolfson has donated his bonus. He likens it to John D. Rockefeller’s having handed out dimes to strangers, to curry public favor.
“Working people,” says Appelbaum, “do not want charity. They need guaranteed wages and benefits — the kind that come with a union contract. They shouldn’t be forced to hope that their employer will have a momentary impulse — a munificent impulse — to share his massive wealth.”
The RWDSU represents Macy’s workers, among others. Says Appelbaum, “We don’t need the head of Macy’s to turn over his bonus to his employees. We want him to recognize that his employees need to be treated with dignity.”
Copyright 2013 ABC News Radio
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