Earlier this month, Delta Air Lines announced that it was paying out over $1.1 billion in profit sharing to its more than 80,000 employees, which Fortune reported was the second-largest payout in its history after the $1.5 billion it shared last year. Over the past five years, Delta said it had paid out nearly $5 billion through its profit sharing program, which returns 20 percent of its annual pre-tax profits to the employees if they exceed $2.5 billion and 10 percent if not.
Profit sharing has become an increasingly common feature of progressive employers in recent years, in sectors from manufacturing to tech and show business. Advocates have touted it as a potential remedy to the problem of wage stagnation at a time when many corporations are posting record profits.
The good news for Delta’s employees was somewhat less welcome to its competitors, however. At American Airlines, which introduced profit sharing in 2016 at a rate of 5 percent, and whose profits for 2017 were smaller than Delta’s, employees are “concerned because their profit sharing rate is less than at either Delta or United,” Ted Reed observed at Forbes:
A Delta captain will get a payout of $29,000 to $59,000, according to the Allied Pilots Association, which represents 15,000 American pilots, while a United captain gets between $9,300 and $20,500 and an American captain gets $3,600 to $7,500. … The union wants to discuss higher profit sharing with management, APA spokesman Dennis Tajer said Wednesday.
The original cast of the hit Broadway musical Hamilton have struck a deal with producers that will give them a cut of the show’s immense profits, New York Times’ Michael Paulson reports:
The deal, which was announced by a lawyer representing more than two dozen actors and dancers who were part of the show’s development and first productions, is a major victory for the cast and could have ripple effects in the theater industry, where the huge success of “Hamilton,” and the lack of profit-sharing, catalyzed a growing debate about actor compensation.
The agreement means that actors will have a piece of “the profit stream from the play,” Ronald H. Shechtman, a leading labor lawyer in the theater industry who represented the “Hamilton” performers, said in a statement. Jeffrey Seller, the lead producer of “Hamilton,” a megahit now generating upward of $500,000 in profit every week on Broadway, confirmed the agreement. Neither Mr. Seller nor Mr. Shechtman would discuss details, some of which remain to be hammered out, and Mr. Shechtman said that the performers were not ready to comment on the deal.
The Best Workplaces in Manufacturing and Production, a list released this week by Fortune and Great Place to Work, illustrates how the American manufacturing industry is embracing the value of talent just as wholeheartedly as tech and service sector organizations. Employees at the top-rated firms—including Hilcorp, Tactical Electronics, and Arthrex—expressed a sense of pride and purpose in their work, felt challenged to fulfill their potential, and said their employer fostered a positive work culture in addition to offering meaningful rewards.
“These organizations stand apart not only for the level of trust their employees express in anonymous surveys, but also for defying outdated perceptions of working in these industries,” Great Place to Work’s director of research and content Ed Frauenheim and executive vice president Kim Peters write at Fortune:
Take job security: 92 percent of employees at companies on the list say their leaders would lay people off only as a last resort. That’s even better than the response from people at companies on the broader ranking of the Fortune 100 Best Companies to Work For, which includes organizations in healthcare and technology experiencing much faster growth. Although the recent crash in oil prices will no-doubt affect energy companies on the manufacturing list, their employees can at least face 2016 with confidence that their organizations will handle the turmoil in good faith.
People at the best employers in manufacturing and production also feel they get a fair shake during positive economic cycles, with an average of 82 percent saying they receive a fair share of profits. This is helped by innovative compensation programs like Hilcorp’s practice of letting employees invest in – and collect returns from – specific company projects. The share-of-profits survey question also reveals another surprising area where companies on the manufacturing list collectively outperform their peers among the broader Fortune 100 Best Companies to Work For.