AutoNation to use tax-law savings toward employee benefits

Jan. 16--Fort Lauderdale-based AutoNation, the nation's largest auto retailer, announced Tuesday it plans to use savings from the new tax law toward retirement and cancer benefits for employees.

AutoNation said it expects a $41 million quarterly benefit and a $70 million to $100 million annual benefit from the tax law, which chops the corporate tax rate from 35 percent to 21 percent.

With the savings, AutoNation said it will double its match of employee savings in the 401-k retirement plan and launch a cancer benefit program that includes cancer insurance for employees and their families, as well as a cash payment of up to $5,000 when diagnosed.

"We are excited about the pro-growth environment for business in the U.S., which includes the recently signed tax reform bill," said AutoNation Chairman and CEO Mike Jackson. "As a U.S.-based company, our employees, customers and shareholders will benefit greatly from a reduction in our corporate tax rates."

AutoNation's announcement comes on the heels of Jackson's appointment last week as chairman of the Federal Reserve Board of Atlanta.

The company said it will pay fully for MetLife cancer insurance for employees as families, and match 50 cents of every dollar an employee contributes to the company's retirement plan, up to 4 percent of eligible compensation. Previously, the match was half of up to 2 percent.

Marc Cannon, spokesman for AutoNation, said the company decided on an approach to tax-benefit savings that would be ongoing, rather than a "one and done" employee bonus.

According to a 2017 survey by the Society for Human Resource Management in Alexandria, Va., nearly one-third of organizations surveyed increased their overall benefits in the last 12 months, with the largest growth in health and wellness benefits. The top reason for increased benefits was to remain competitive in the marketplace for talent, the association said.

AutoNation has long supported breast cancer research and patients through its annual "Drive Pink" campaign, which involves both fundraising and employee involvement. In 2018, AutoNation raised more than $11 million for cancer research.

Marcia Heroux Pounds

The Sam's Club in Lantana is one of 63 stores around the country that Wal-Mart Stores is closing.

Lantana Mayor David Stewart said he received notification this week that the store would close on Jan. 26 and that 191 workers would be affected. Sam's Club, at 7233 N. Seacrest Blvd., is a membership...

The Sam's Club in Lantana is one of 63 stores around the country that Wal-Mart Stores is closing.

Lantana Mayor David Stewart said he received notification this week that the store would close on Jan. 26 and that 191 workers would be affected. Sam's Club, at 7233 N. Seacrest Blvd., is a membership...

(Marcia Heroux Pounds)

U.S. President Donald Trump signed the massive tax overhaul into law in December. Major consumer companies across the country, including American Airlines, Walmart and Wells Fargo Bank, have reacted to the new tax law by providing new benefits that include employee bonuses, increased minimum wage or new charitable contributions.

Observers say the moves have to do with public relations in the wake of the swell of tax savings companies are slated to receive under the new tax law.

AutoNation warned in its news release and securities filing that its tax savings estimates could change, as they have not yet been reviewed by the public company's independent auditor.

OTHER NEWS:

Wal-Mart raises its lowest wage to $11 an hour, crediting tax cuts and facing competition for workers

AutoNation CEO Mike Jackson appointed chairman of Federal Reserve in Atlanta

AutoNation announces deal with Alphabet's self-driving technology company

[email protected] or 561-243-6650, twitter: @marciabiz

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