Profit Sharing

[safety stud]

Most of the unions have profit sharing language built into their contracts. Does anybody know how, and when it will be paid out? Rumor has it, we won't see anything till the final year tally. As F/A's, the rumor was $300.00 after taxes per 100 million profit. Given the estimates of 650 to 700 million in profit for the year that would place the F/A check at around $2,100.00... Nice chunk of change if you see it?

 

[700UW]

The formulas are in your CBA.

 

[EricLv2Fish]

At HP it was a little different program for non represented employees and we were paid around the March time frame. In 2003 we got 10% of our annual pay and in 2005 we got 5%. It all depended on your pay grade. It was fair in my estimation based on level of responsibilty. The mechanics union didn't have profit sharing in their scope language and didn't participate.

 

[700UW]

Scope language defines what work is yours, not profit sharing.

 

[EricLv2Fish]

Scope language defines what work is yours, not profit sharing.

Thanks for that correction.

 

[PhxMama]

Now that west csrs hve same profit sharing as east csrs does anyone know what it is? I have tried to read the contract and too much"legaleze". Could anyone give me a clarification in laymans words?I would appreciaet it. Mama

 

[Pylit]

Never.

 

[BoeingBoy]

Now that west csrs hve same profit sharing as east csrs does anyone know what it is?

PhxMama,

I don't know about the CSR's, but I believe the East group's profit sharing generally followed the same formula. This is the ALPA formula:

1 - There has to be a pre-tax annual profit, excluding unusual items.

2 - If #1 occurs, the pre-tax profit margin comes into play (pre-tax profit as defined in #1 divided by revenues).

3 - If the profit margin is between 0.1% and 10%, 10% of the pre-tax profit goes into a pool to be shared by all employees that participate in profit sharing.

4 - If the margin is over 10%, then 15% of the profit above a 10% margin also goes into the pool.

Keep in mind that a 10% profit margin is a huge profit - nearly $1 Billion annually.

Finally, an example:

Annual pre-tax profit excluding unusual items = $250 million with revenues of $10 Billion. Profit margin = 2.5% ($259 Million/$10 Billion expressed as a percentage). Since this is above the 0.1% threshold for profit sharing, 10% of the profit goes into the profit sharing pool - $25 Million - to be shared by all employees eligible for profit sharing.

Jim

 

[PhxMama]

PhxMama,

I don't know about the CSR's, but I believe the East group's profit sharing generally followed the same formula. This is the ALPA formula:

1 - There has to be a pre-tax annual profit, excluding unusual items.

2 - If #1 occurs, the pre-tax profit margin comes into play (pre-tax profit as defined in #1 divided by revenues).

3 - If the profit margin is between 0.1% and 10%, 10% of the pre-tax profit goes into a pool to be shared by all employees that participate in profit sharing.

4 - If the margin is over 10%, then 15% of the profit above a 10% margin also goes into the pool.

Keep in mind that a 10% profit margin is a huge profit - nearly $1 Billion annually.

Finally, an example:

Annual pre-tax profit excluding unusual items = $250 million with revenues of $10 Billion. Profit margin = 2.5% ($259 Million/$10 Billion expressed as a percentage). Since this is above the 0.1% threshold for profit sharing, 10% of the profit goes into the profit sharing pool - $25 Million - to be shared by all employees eligible for profit sharing.

Jim

Thank you for the info, the example pulled it all together.

 

[BoeingBoy]

Just noticed that I "fat fingered" a number:

Annual pre-tax profit excluding unusual items = $250 million with revenues of $10 Billion. Profit margin = 2.5% ($259 Million/$10 Billion expressed as a percentage).

Hopefully, it was obvious that it should have been "($250 Million/$10 Billion..."