Caterpillar Inc. released its own economic stimulus package this month with the announcement of a record $1.2 billion payment to employees.
“The employee incentive program is based on how the company did in 2011 as part of Caterpillar’s broad philosophy on compensation,” said spokesman Jim Dugan.
Caterpillar broke records last year with sales and revenue totaling just more than $60 billion. The result is that when the company does well, participating employees do, too.
Caterpillar paid out $770 million last year, based on the company’s performance in 2010. The company doesn’t provide any further breakdown of compensation payments.
“We set targets ahead of time. In 2009 – that was a difficult year; we paid out zero for that year,” said Dugan.
With 23,500 of the company’s 125,000 employees located in central Illinois, this area likely receives the biggest benefit from the compensation, he said.
With most of the company’s top management people living in central Illinois, this region stands to gain since the plan is weighted toward managers whose total compensation package is based heavily on incentives.
“Not all of those 23,500 employees in Illinois get incentive payments. Production employees, such as those with United Auto Workers, have a different program with (lump-sum) payouts in November,” said Dugan.
The central Illinois retail scene definitely takes note of the Caterpillar compensation program, said Bob Schertz, marketing manager at Northwoods Mall.
“(The compensation) has a big effect on us. It has a big effect on retail, in general. We can always tell when the bonus checks come out. There’s more activity in the stores. There’s an uptick in mall traffic,” he said.
Mike Murphy, owner of Mike Murphy Ford in Morton, said it’s a good time to be pumping extra spending money into the market.
“Spring always brings people out. The car show is coming (March 30 to April 1). People start to think about replacing that car. We’d definitely welcome Caterpillar people, as any dealer would,” he said.
Dave Smith of Modern TV, 325 E. Lake Ave., said he hoped his store would see some benefit from the compensation program. “The best deals for the money right now are the 42-inch LCD and LED TV sets.”
With Caterpillar projecting sales and revenue to range between $68 billion and $72 billion in 2012, retailers might see another stimulus package next year.
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Info Courtesy of Peoria Journal Star