The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-12-25

Year-End Bonuses
This Year Best
in Some Time.
by VINCENT s. LYONS.
Times Financial Editor

During the last few weeks, and
particularly in the last 10 days or
so. there has been a revival Of
happy custom in corporation cir
cles-the declaration of extra divi-
dends to stockholders Or the dis
tribution of special compensation
to employees. Christmas Day thus
has been made a festive occasion
for the persons participating IN
such benefits.
Several years ago, or before signs
Of the current depression appeared
on the economic horizon, holiday
bonuses we're quite the vogue
Money expended in the form OF
special remuneration to stockhold-
ers and workers ran up into sub
stantial figures. Stock brokerage
firms we're particularly liberal in
this respect. their workers being
the envy Of employees in other
branches Of industry.
Since 1929 extra and increased
dividends to owners Of stock and
bonuses to workers have been abb
sent at the year-end. The ravages
Of the depression forced all bust
ness enterprises TO institute econo-
mics Although no general sur
vev has been undertaken, it would
seem that the aggregate Of money
spent in this manner this year has
been the heaviest in four or five
years.
THIS trend, more than anything
Il else. is a barometer of what is
happening in the business chan
nels of the country. 1t is safe to
assume that the special compensa-
ton voted this year was paid be-
cause executives feel that the cur
rent volume of business being ham
died by them warrants such dis
burSementS.
It would not be correct to say
that all of the funds distributed IN
year-end bonuses came out OF
earnings during the year. Many of
the corporations decided upon such
gratuities because of substantial
surpluses. In view of the fact that
there has been a certain amount OF
fear in business circles that the
Government might place a tax on
corporation SURPRISES, some OF the
disbursements might have been
made because of the anxiety.
On the other hand, it is ques-
tionable whether corporations
which were apprehensive of such
action would give the money TO
stockholders or workers rather
than use it to retire bond issues or
otherwise improve their positions.
The giving OFT of special compen-
sation to avoid taxation while their
own finances could very we'll stand
some readiustment would seem to
constitute a leaning over backward
attitude.
"THILE some of the larger cor
w porations have been among
those which voted special year-end
dividends to their stockholders, a
further analysis will reveal that of
the companies which distributed
special compensation to their work
ers a great many of them have
been more Or less smaller enter
prises. The big corporations are
virtually prohibited from making
such adjustments by virtue of the
huge number of persons they carry
on their pay rolls.
Disregarding the pros and cons IN
the matter. the disbursements are
a robust commentary on the times.
Wherever the bonuses fall they will
have the effect of stimulating con-
fidence. which can do no harm.
Many of the disbursements, espe-
cially the dividend declarations,
actually will not be received be-
fore the end of the holidays. How
ever. as announcement of the pay
ments are looked up as equivalent
to the receipt of the sums. it is
quite safe to say that a good part
of these extra funds has already
found itSolf into the business
stream of the nation.