It’s bonus time for some employees

More than three dozen of the biggest American companies shared their tax-cut windfalls with employees, mostly through one-time bonuses but also with hourly wage increases and bigger 401(k) matches after the tax law passed in December.

Home Depot was the latest big name to say it will share some of the financial benefits from the Tax Cuts and Jobs Act of 2017, which slashed the corporate tax rate to 21% from 35%. The home improvement chain said Thursday that it will pay a one-time cash bonus up to $1,000 to its U.S. hourly workers. The bonus follows similar moves by employers such as Walmart and Walt Disney. Overall, the tax law should boost the profitability of large U.S. companies by 8% this year, according to Credit Suisse.

As of Thursday, 37 companies in the Standard & Poor’s 500 index — comprising 500 of the nation’s largest companies — said they are providing additional financial rewards to workers, citing benefits from the tax law, according to a USA TODAY analysis of corporate news releases and company statements, as well as other forms of publicly available communication tracked by multiple sources, including Americans for Tax Reform, FactSet

and S&P Global Market Intelligence.

Two dozen of the companies are paying cash bonuses, four are issuing bonuses in company stock, seven are lifting wages and two are boosting the company’s 401(k) match. Combined, these companies represent 7.4% of the S&P 500.

USA TODAY’s research estimates that more than 1.3 million workers will receive either cash or stock-based bonuses totaling $1.7 billion or more. Still, the bonuses announced by S&P 500 companies are small compared with the total compensation — wages, salaries and benefits — of $10.3 trillion paid by companies last year, according to the Department of Commerce.

Overall, S&P 500 companies are expected to pay $75 billion to $100 billion less in taxes in 2018 compared with last year, according to Credit Suisse.

Though getting an extra $1,000 check is welcome, employees would have been better off had more companies boosted their pay as wage gains are permanent, economists said.

“A bonus is a one-time event paid without consideration of employee performance, providing only a temporary lift,” said Mark Hamrick, senior economic analyst at Bankrate.com.

It will do little to close the wage gap between workers and CEOs. In 2016, S&P 500 CEOs earned a median $11.5 million in compensation from salary, bonus, stock and other compensation, up 8.5% from the prior year, according to a study by executive data firm Equilar for the Associated Press. CEOs earned 347 times what the average worker did in 2016, according to the AFL-CIO’s Executive Paywatch study.

“It’s a drop in the bucket,” said Nick Sargen, chief economist at Fort Washington Investment Advisors, a moneymanagement firm in Cincinnati. “Companies are doing it mainly as a PR gesture. It looks good that they are sharing a portion, however small, of the corporate tax cuts.”

Edward Yardeni, president and chief investment strategist at Yardeni Research, said companies are unlikely to boost wages because they remain cost-conscious in a tight labor market.