Add Starbucks Corp. (NASDAQ: SBUX) to the growing list of companies that have announced bonuses, pay raises and other benefit improvements for employees following the new tax law enacted last month. Starbucks said that its plans were “accelerated” by the tax law changes.
Beginning in April, all hourly and salaried employees (called “partners”) will receive a pay increase in addition to any pay raise they may already have received in the fiscal year. The company reckons the wage hikes will cost around $120 million.
Also in April, the company will award an additional stock grant for 2018 to eligible employees who have been employed since January 1 of this year. Retail partners will receive a stock grant valued at $500, while store managers’ grants will be $2,000. Starbucks estimates this action will cost more than $100 million.
Starbucks also will create a new Partner and Family Sick Time benefit and extend parental leave for all non-birth parents to six paid weeks. Starbucks noted that the company already pays more than minimum wage in all U.S. states.
The company reiterated its plans to create more than 8,000 new retail jobs and an additional 500 at its Augusta, Georgia, soluble coffee plant. Capital spending plans for the next five years call for $7 billion to deploy to build and renovate U.S. stores, manufacturing plants and technology platforms.
Other large companies that have announced $1,000 cash bonus payments include AT&T, Bank of America, several major airlines and Walmart.
Starbucks stockholders are not amused. Shares traded down about 1.8% in the early afternoon Wednesday, at $60.59 in a 52-week range of $52.58 to $64.87. The 12-month consensus price target is $64.29.