Starbucks (NASDAQ: SBUX) will use some of the savings from the new U.S. corporate tax cuts to give domestic employees pay raises, company stock and expanded benefits with a combined worth of more than $250 million, the company said on Wednesday.
With the announcement, the world's biggest coffee chain joins companies like Wal-Mart (NYSE: WMT), Apple (NASDAQ: AAPL), Comcast (NASDAQ: CMCSA), and American Airlines (NASDAQ: AAL) in sharing their tax savings with employees.
Starbucks is known for giving its workers, which it calls "partners," more generous pay and benefits than other mass-market restaurants and retailers.
"Investing in our partners has long been our strategy, and due to the recent changes in U.S. tax law, we are able to accelerate some significant partner investments," Chief Executive Kevin Johnson said in a letter to employees.
Starbucks declined to say how much it expected its tax bill to drop under the new plan, and said executives would give details on its earnings call on Thursday.
An analyst with Credit Suisse recently estimated that Starbucks' global tax rate could fall to about 24-25% from around 33%, which would drive roughly $425 million in annual tax savings.
Seattle-based Starbucks said it will give hourly and salaried employees, who received pay raises in January, a second wage increase in April.
It is also giving additional stock grants to eligible employees through mid-April.
Coffee shop workers will receive a grant of at least $500 and store managers will receive $2,000 grants.
Shares in Starbucks shed 53 cents to $61.16
