The Richmond palladium and sun-telegram., 1920-07-30
new WPROFIT-SHARING
PLAN ANNOUNCED BY
HARVESTER COMPANY

The International Harvester COM
pany yesterday announced that every
year it will give its employees 20 per
cent Of it's profits after seven per cent
has been paid on the invested capital.
This extra compensation will be paid
part in cash and part in stock. The
plan probably is the most comprehen-
sive profit sharing program under
taken by a large industrial corpora
ton.
Hundreds Of employees in the local
branch factory, formerly the Amerl-
can Seeding Machine company, will
be affected by the new plan
Some idea of what the plan will
mean to employees may be had from
the fact that for 1919 the company
had a balance of about $12,0OO,OOO
from earnings after paying dividends
on it's capital stock. This division of
profits, which is termed an extra
compensation and stock ownership
plan," is open to all employees of the
company in the United States and
Canada, with certain limitations re-
garding length of service.
Share 1920 Profits
share of this years profits, as the
plan is made operative as OF Jan. l,
1920. : 1 -
The profit sharing plan was ap-
proved by the stockholders yesterday
at a special meeting in Hoboken, N.
J. At the same time it was voted to
increase the preferred stock from
$50, ,oOO, 900 to $1OO,O0O,O00, and the
common stock from $s0,000,00O to
$3.50 900 900.
The additional $4O,000,O00 of pre-
ferred stock and s2O,O0O.OO0 Of the
common stock will be given to en-
ployes in the next few years under
the profit sharing plan.
The remaining $30,000000 common
stock will be used in declaring a 121s
per cent stock divided Immediately on
the present $SO,000,0OO common stock
which will take S10,000,000, and pay
ment Of future semi-annual stock divi,
dends of two per cent. The surplus
of the company on Dec. 81, 1919, was
s71 100000.
Mccormick Talks Of Plan
Commenting on the new plan at the
stockholders meeting, President Har
old f. Mccormick said:
THE directors believe that this
plan, which is the result of careful
consideration and thought on the part
of the executives and directors of the
company extending over long period
will round out policy Of relations
| with the, company's employees which
should produce results highly salts
factory to both stockholders and EN-
ployes.
"A plan put into effect by us in
December, 1915, has demonstrated
that the employees welcome an oppor
i tunity to become stockholders of the
company. The plan Is much more
comprehensive than anything hereto
fore undertaken by us along this line
and, it is believed, will appeal strong
ly to the Harvester organization.
"This distribution furnishes a dis
tinct incentive to every employe to dc
his full share, for upon individual ef
/ fort and team play will depend In E
large measure the amount Of the an
nnal compensation to each employe
who is entitled to participate"
How Plan Will Work
Under the plan employees are di
vided into two general groups. One
group, embracing all eligible employees
| except those in executive and man
ageral capacities, will receive two
thirds of the extra compensation fund
part in cash and part in preferred
stock, which pays dividends on pei
cent. This fund will be distributed
in the proportion which the actua
earnings of each employee for the
year bears to the aggregate earning:
of all employees in the group entitled
to share in the distribution.
Employees must have been continu
ously in service during the calenda
year in which the extra compensation
fund Is earned. and until the time o
distribution, which will be about Ma,
l of the following year. If an employ'
is retired on pension or dies his share
will be payable to him or his estate
Employees also must hold the pre-
ferred stock given them in order tt
share in future distributions.
The second group embraces EN-
ployes in executive and managerial
capacities. This group will receive
one-third of the extra compensation
fund, apportioned as nearly as pos
sible according to the value Of thei
services as determined by the direc
tors.
| Conditions of participation are th
same as for employees in the firs
group except that they will receive
common instead of preferred stock II
part payment of the yearly extra com
ipeusation.