Southwest Airlines Co. (NYSE: LUV) announced yesterday it will share $543 million through its ProfitSharing Plan with its Employees for 2017. This equals approximately 11.3 percent of each eligible Employee's eligible compensation—the equivalent of more than five weeks' pay.
This is Southwest Airlines' 44th consecutive ProfitSharing award. The Company will pay part of the ProfitSharing award to the retirement plan and part in cash. Most Employees will receive 10 percent of eligible compensation as a contribution to the ProfitSharing Plan, and the remainder—approximately 1.3 percent—in cash, both of which will be paid on March 15, 2018. Some Employees will receive the entire ProfitSharing award as a contribution to their retirement plan accounts as specified in their collective bargaining agreement.
"Our Employees never lose focus on connecting our Customers to what's important, even in a year of great triumphs and great challenges," said Gary Kelly, Chairman and CEO of Southwest. "They continue to be the primary reason Southwest stands apart from the rest, and it's a pleasure to be able to reward their hard work and dedication to our success."
This ProfitSharing award, when combined with contributions of $476 million to 401(k) plans, represents a total investment of more than $1 billion to reward Southwest Employees in 2017. This is in addition to the $1,000 tax reform bonus paid to each eligible Employee in January 2018, on top of base salaries.
Southwest was the first in the industry to offer a ProfitSharing Plan. Through the ProfitSharing Plan, Southwest Employees currently own more than 4 percent of the Company's outstanding shares.