No Trump bump here: This company killed its holiday bonus
Telecom provider CenturyLink canceled its holiday bonus this year, even though some competitors are stuffing extra presents into employees’ stockings.
CenturyLink (CTL), the $19 billion provider of broadband and networking services based in Monroe, La., told employees this week that it it won’t be offering a holiday bonus, as it has before. Last year, the company gave unionized employees $200.
Here’s the body of an email CenturyLink CEO Glen Post sent to employees on Dec. 18, one week before Christmas:
CenturyLink, which has more than 39,000 employees, just completed a major purchase of Colorado-based Level 3 Communications, for roughly $24 billion. That deal gave CenturyLink access to Level 3’s business customers around the world. The combined company offers broadband and networking service to residential, business and government customers throughout the United States. Purchasing Level 3 was meant to shore up a telecom business that’s been struggling as competitors slash prices and offer faster service, and customers consider options besides broadband.
CenturyLink’s services compete with offerings from AT&T (T) and from Verizon (VZ), Yahoo Finance’s parent company. AT&T said on Dec. 20 that, if the Trump tax cuts go through in early January as expected, it will give as many as 200,000 rank-and-file workers a $1,000 bonus. Verizon has not announced anything similar. But other companies, including Comcast (CMCSA), Fifth Third Bank (FITB) and Wells Fargo (WFC), said they’d boost pay or issue bonuses if the tax cuts go through.
CenturyLink’s finances have been suffering, as Post, the CEO, noted in his email to employees. Revenue peaked in 2012 and has been sliding ever since. Net income in the company’s latest fiscal year was down by 50% year-over-year, and by 59% since 2012.
CenturyLink’s stock price has struggled accordingly, falling by 31% so far in 2017. Here’s how CenturyLink, in dark blue, compares with AT&T, Verizon and the S&P 500:
Yahoo Finance asked CenturyLink if it has any plans to reconsider the canceled bonus, given that other companies are moving in the opposite direction. “We decline to comment,” spokesperson Linda M. Johnson replied by email.
Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman
