Arco to Give Employees 5% Bonuses for Christmas
About 19,000 Atlantic Richfield Co. employees will have an especially merry Christmas this year, in the form of a 5% bonus announced Wednesday by Chairman Lodwrick M. Cook.
In “special recognition” of the employees’ contributions during the last five years of restructuring, Cook told employees to expect an extra check in their Christmas stockings, effective Monday.
“Arco employees can take great pride in the way they have responded to this challenge and in their contributions to the company’s sustained superior performance over this period,” Cook said in a memo to employees distributed Wednesday.
The bonuses amount to 5% of the annualized base income for all of Arco’s regular full-time employees as of last Monday, excluding some senior managers and chemical company workers.
Arco spokesman Albert Greenstein declined to say how much money Arco would spend to supply the bonuses, but observers note it will be in the tens of millions of dollars.
Analysts said Arco’s move was unusual among oil companies.
And at least one vocal oil industry critic was outraged that Arco was giving out bonuses while gasoline prices remain near record levels.
“I think it says to the general public, ‘We’re doing so well by charging higher prices for gasoline that we’re going to convert it into higher bonuses for employees instead of keeping gasoline prices lower,’ ” said Ed Rothschild, energy policy director with the advocacy group Citizen Action in Washington.
Greenstein denied that the bonuses were related to any profit gained during the current Middle East crisis.
He added that Arco has already lowered gasoline prices an average of 3.5 cents a gallon since Dec. 1; lowering them any further would create a run on gasoline and create shortages similar to those Arco experienced when it held the line on price increases after Iraq invaded Kuwait on Aug. 2.
Even Rothschild admitted that Arco has kept its price increases below those of other major oil companies.
Analysts said that Arco’s financial performance was good even before the crisis began and that it had ample cash on hand to fund any bonuses.
“One could never say that Arco is gouging the public to benefit Arco employees,” said Bernard J. Picchi, an industry analyst with Salomon Bros. in New York.