Marriott Plans To Distribute $ 140 Million To Employees After Benefiting From Corporate Tax Cuts
Company CEO revealed it will contribute the funds to employee retirement savings plans
Marriott International Inc. employees should expect to see a financial benefit from the federal tax cuts recently enacted by Congress, according to company officials.
The company announced in its fourth-quarter financial results that it expects to receive a sizable windfall from the roughly 8-percentage point deduction in its effective tax rate, which was reduced to about 22 percent.
Marriott CEO Arne Sorenson said in a company press release the company will take $70 million from its sale of the procurement platform Avendra to Aramark and couple it with $70 million in cash to distribute a total of about $140 million to employees.
Marriott sold Avendra to Aramark in December for about $1.35 billion.
The $140 million will be distributed to the retirement savings plans of corporate employees and eligible associates at its hotels through a one-time $5-to-$1 company match of up to $1,000.
Soreson said in a statement the “vast majority” of employees should receive the incremental company contribution.
“As we considered how we might leverage this good news, we considered our long-term cultural maxim that in the hospitality business, strong guest loyalty and economic results are derived from high associate satisfaction and engagement,” Sorenson said in an earnings call Wednesday with investors. “To put it plainly, at Marriott, we try to take care of our associates, our associates take care of our guests, and our guests keep coming back. Attracting and keeping the best talent is critical for us, so we plan to invest roughly $140 million for 2018 in our most important asset, our people.”
The positive news for employees comes after a successful year for Marriott, according to the company. The Bethesda-based hotel company reported returning $3.5 billion to shareholders in stock purchases and dividends during the year and plans to return about $2.5 billion to shareholders in 2018.
The company opened 76,000 new rooms last year and attributed stronger returns on its hotel revenue in part due to demand after hurricanes in North American and the Caribbean as well as better-than-expected leisure demand in Orlando, Miami, New Orleans and Los Angeles.
“We are bullish about our future,” Sorenson said in the earnings call.
The company’s strong financial outlook comes as it prepares to move its headquarters from an office park on Fernwood Road in Bethesda to a new building in downtown Bethesda in 2022.