Kodak Bonus Is Smallest Since 1934
ROCHESTER, N.Y. (AP) _ Those who survived the big jobs cuts at Eastman Kodak Co. _ and even the 16,600 who didn’t _ got an annual wage bonus Friday that evoked memories of the photo giant’s leanest year during the Great Depression.
Weak profits drove down Kodak’s late-winter payout to its second lowest level since founder George Eastman launched an ``extra pay for extra good work″ dividend in 1912.
At least it wasn’t 1934 all over again, when no bonus was awarded.
``I’ll take it,″ said John Ivey, 30, an industrial engineer who joined Kodak in 1992 and was laid off in December. ``I’m surprised that there’s anything there given the roughness of the year. I’m definitely going to stow it away.″
Late last year, after Japanese rival Fuji cut into Kodak’s U.S. market share by sharply lowering film prices, Kodak said it was shedding 17 percent of its worldwide payroll of 95,000 by the end of 1999.
The dividend amounted to 2.06 percent of each employee’s base pay _ an average bonus in the United States of $1,015 a person vs. $3,058 a year ago.
In all, the payout shared by 39,600 U.S. employees and ex-employees totaled $40.2 million, compared with $124.8 million last March.
For decades, Kodak guaranteed workers an annual bonus no lower than 5 percent of their base pay, but also no higher than 15 percent.
There are no longer any guarantees. In 1996, Kodak began linking the bonus more closely to the company’s performance _ its return on net assets. The formula will be refigured once again next year to couple the bonus to a financial measure known as ``economic value added.″
``Over the years, there was a static formula that really didn’t link the size of the payout to the performance of the company,″ said Kodak spokesman Charlie Smith.
The latest method, he said, ``will be a better (one) for judging shareholder value. We’re trying to get the employees lined up so that doing what’s right for themselves is right for the shareholder.″