Lowe’s will follow rival Home Depot in giving thousands of its hourly employees a one-time bonus of up to $1,000 due to new tax legislation, according to an internal company memo reviewed by CNBC on Wednesday.
The bonuses will be based on an employee’s length of service with Lowe’s, and more than 260,000 part- and full-time individuals are set to receive the payouts, the company said. Lowe’s declined to comment on how the bonuses would be broken out based on tenure.
Effective May 1, Lowe’s will also be expanding its benefits package for full-time workers to include paid maternity leave for 10 weeks, paid parental leave for two weeks, adoption assistance of up to $5,000, and faster eligibility for health benefits, the memo said.
“We’ll continue to make investments to improve the employee and customer experience,” Lowe’s wrote to its workers.
The company said it will provide more details on those investments in the coming weeks. Lowe’s is set to report fourth-quarter earnings Feb. 28.
Lowe’s now marks one of many companies, and notably many retailers, touting bonuses and wage hikes in 2018. But the labor market for retail businesses is increasingly under pressure, making it more necessary for companies to attract and keep talent with incentives like these.
The news comes just days after Lowe’s board approved a stock repurchase program of up to $5 billion. The company also just recently nominated two independent board members and plans to add a third following “constructive” talks with hedge fund D.E. Shaw Group, which now maintains an activist stake in the home improvement chain.
D.E. Shaw is concerned about Lowe’s performance relative to its peers, sources have told CNBC. Shares of Lowe’s are up about 43 percent from a year ago, while Home Depot’s stock has soared roughly 46 percent over the same period.