Green Bay-based Associated Banc-Corp announced plans Thursday afternoon to raise its minimum hourly wage to $15 once the federal tax reform legislation is signed into law by President Donald Trump. The president signed the legislation this morning.
The company, which operates about 200 Associated Bank branches in Wisconsin, Illinois and Minnesota, currently pays a minimum of $10 per hour. In addition to the pay raise, Associated plans to give a $500 bonus to all hourly, non-commissioned employees.
In an SEC filing today, Associated Banc-Corp indicated it expects to save $14 to $16 million on its taxes in the quarter the tax legislation becomes law, in the form of valuation allowance of its deferred tax assets.
The company expects the one-time bonus payments to hourly employees to total $1 million, and the wage increase to cost about $2 million in 2018, including the impact of its pending Bank Mutual acquisition.
Philip Flynn, president and chief executive officer of Associated, said in the statement the reduction in business tax rates spurred the company to increase employees’ pay.
“Every day our customers share stories of our colleagues delivering a positive customer experience,” Flynn said. “Our ability to recognize their work in this way is something we are proud to do.”
Associated Bank has about $30 billion in assets. It reported 2016 profits of $200.3 million. Its 2016 income tax expense totaled $87 million, up $6 million from 2015, an effective tax rate of 30 percent.
Several other companies also made announcements today about plans to increase wages in response to federal tax reform.
Pittsburgh-based The PNC Financial Services Group Inc., which has a significant Milwaukee presence, said it would raise its minimum pay rate to $15 by the end of 2018, deposit $1,500 in employees’ defined benefit pension plan accounts and pay out a $1,000 cash bonus to about 47,500 employees in the first quarter.
PNC also will make a $200 million donation to its foundation.
“The tax reform law creates an opportunity to reward our employees who are working hard each day to serve our customers, build strong relationships in our communities and create long-term value for our shareholders,” said William Demchak, chairman, president and CEO of PNC. “The board’s decision to recognize our employees and support our communities is reflective of our commitment to PNC’s success.”
Boeing, AT&T, Fifth Third Bancorp, Wells Fargo, Comcast and other companies also have announced bonuses, pay raises and other capital expenditure plans since the tax reform bill was passed this week.
