Porsche gives all employees close to $14,000 in bonus

PHOTO: Reuters

In the United States, working full-time does not always mean earning even just a living wage. But in Germany, things are pretty different.

And there, Porsche is providing a whole new level of comfortably paid employment - every single one of the company's 21,000 employees is set to receive a massive €9,111 (S$13,700) bonus, as The Drive reports.

Why? The luxury carmaker reached record sales last year - US$24 billion (S$33.60 billion) in revenue, marking a 4 per cent increase, according to a statement.

So rather than piling all that extra money at that top of the corporate totem pole, Porsche decided to reward its thousands of workers.

The exact amount of each bonus is €9,111, a reference to the Porsche 911. That extra paycheck will be paid to everyone - factory workers, janitors, senior staff, engineers, cafeteria workers, and so forth.

Talk about #careergoals. That sort of generosity would be nice to find in the well-endowed corporations of America.

"For Porsche, 2016 was an eventful, emotional and, above all, highly successful year," Oliver Blume, chairman of the executive board of Porsche AG, said in a statement.

"The expertise and passion of our staff forms the basis of a successful future for Porsche."

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Of course, the company itself isn't the only one to thank for such a generous offering. Labor policies in Germany are remarkably different from those in the US.

These days, Germany has stronger unions and labour representation at the highest levels of power in large companies.

Groups called "works councils" offer employees the opportunity to take part in their company's top decision-making.

This happens through a labour representative that they elect.

And that's a system that simply doesn't exist in the US, where executives make labour policy decisions behind closed doors.

Read the full article here.

Read also: Indian boss gives 1,260 cars, 400 flats and jewellery as Deepavali bonus to staff

What to do with your bonus

  • “It is important to note that there is no single formula that fits all. What works for others may not work for you. No one knows you better than your own self,” says Mr Chris Gill, regional general manager of Friends Provident International.
  • Your first bonus feels like a huge hongbao, but resist the urge to splurge. Young adults should consider reducing their student loans. Mr Lam of DBS says: “After you have addressed your key financial gaps, you can consider allocating a third of your remaining bonus to paying off an existing loan, especially if the interest on the loan is higher than the potential return on investment.”
  • IPP’s Mr Lam says such families typically have higher household expenses compared with singles. Building cash reserves of three to six months’ worth of household expenses is even more crucial in case the breadwinner has a major illness or loses his job.
  • “Parents may like to set aside funds for future university expenses. This can be accomplished through investing in endowment plans or by setting up a regular savings plan,” he says.
  • “If you are planning to buy a home this year, you may wish to consider placing your funds in an account, such as POSB eMSA- Home, that will earn you higher interest on your savings when you take up a home loan with the bank subsequently,” he adds.
  • Those in this category are likely to enjoy bigger bonuses, says Mr Siong, but their family commitments are also likely to be higher. “Bonuses are typically set aside for their children’s higher education and other obligations such as taking care of aged parents.”
  • They should also be thinking about retirement. Mr Siong says: “If they have not already done so, they should allocate part of their bonus for their retirement, more if their spouse is not working.” Mr Lam of DBS suggests a third of their bonus could go into investment or retirement planning, depending on age.
  • On top of retirement planning, IPP’s Mr Lam also suggests tax planning through the use of the Supplementary Retirement Scheme (SRS), which qualifies the investor for tax reductions. The amount of tax relief allowed under this scheme depends on the amount contributed to the SRS account, he explains.
  • “Bonus time is a time of general exuberance. Receiving a huge bonus may result in an individual feeling richer than he really is and may result in overspending. A bonus should be regarded as a bonus, in its literal sense, meaning that it is something that one should not take for granted.”

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