Mich. company to pay $4M in holiday bonuses

The average holiday bonus in 2017 — among workers who actually get them — was about $1,800, according to one survey of accountants. But a floral foam maker based in Ludington, Mich., is making that number look almost Grinch-y, announcing a bonus that is likely to average more than $14,000 per worker.

FloraCraft, which manufactures, fabricates and markets foam products — those green or white blocks used in floral and craft projects — has told employees it would be paying out $4 million in bonuses. The move comes after a strong year for the business and a tax reform law that slashed corporate taxes. Also, said Lee Schoenherr, the company’s owner, it was inspired by his concerns about political changes in Washington.

FloraCraft’s bonus, which will be paid out 25 percent in cash and 75 percent through a 401(k) contribution over two years, comes at the end of a year that began with many businesses responding to the Trump tax bill with highly publicized announcements about one-time $1,000 bonuses.

Schoenherr, 83, who has led the company since 1973 and serves as chairman, said he wanted to do something more “meaningful.”

He had typically given an extra week’s pay as a holiday bonus to his workers. But Schoenherr had been thinking for years of making a substantial gift to workers as a way of saying thanks.

“I wanted to show some appreciation for the people who have worked for me and been responsible, to a great length, for the success of the company,” he said.

He decided the timing was right in 2018. The tax cut provided a cushion. The business was reaping the benefits of years of investing in research and development that allowed it to manufacture its own foam, rather than buy it externally, CEO Eric Erwin said. (The private, family-run business does not release financial numbers, but has annual revenue of $70 million.)

Meanwhile, a Pinterestfueled DIY decor and crafting craze has boosted what Erwin calls the “creative products industry” in recent years. “We’ve been very happy with the way digital content has helped us,” inspiring consumers to be more creative with crafts and projects.

Schoenherr said he also began feeling a sense of “urgency” to make the bonus, concerned the environment for business might shift with Democrats taking the majority in the U.S. House of Representatives. He said his company has benefited from President Trump’s policies, including the tax cut and the elimination of some regulations, though he was not able to name any specific regulatory changes during Trump’s term that have benefited his business.

“Things are good now. Who knows what the future is going to bring,” he said. Schoenherr recognized, too, that he wasn’t getting any younger. While he says he has no plans at all to retire, he thought “I better do this while I’m still alive,” he said.

Workers are only eligible for the bonus if they’re below top management, Erwin said — higher-level managers take part in an annual incentive program — and the only factor considered in paying out the bonus is tenure. Workers will receive the equivalent of about $120 a month of service; because the average tenure at the company is 10 years, that would result in an average payment of $14,400, Erwin said.