E-Cigarette Maker Juul Just Gave Its Employees an Average $1.3 Million Bonus


What would you do with an extra $1.3 million? The 1,500 employees of e-cigarette maker Juul are going to get the chance to answer that question. Although the company has made no public announcement, insiders told CNBC that the company had received a one-time dividend payment of $2 billion as part of an investment deal with Altria (the parent company of Philip Morris), which is spending $12.8 billion to buy 35 percent of Juul's shares. The sources inside Juul, who remain anonymous, say that the company decided to divide that bonus among its employees. 

It's a brilliant, brilliant move. To begin with, the company just turned into the employer everyone wants to work for. Commentators on CNBC wryly noted that the rest of us are all in the wrong business. That's a big asset in these days of historically low unemployment, with companies battling for talent, especially tech talent. If it weren't for the talent wars and the difficulty in hiring skilled employees these days, it's a safe bet that Juul would have decided that increased R&D or a new manufacturing facility or some other asset for the business would be the best use of its $2 billion windfall.

Speaking of Juul's tech talent, it seems likely that they, along with the company's senior executives, might get the best bonuses under this deal. The anonymous sources report that the $2 billion will be divided up according to longevity with the company and how much stock they own, among other factors. The Juul website says that every employee is a "stakeholder" in the company, but with stock options a popular incentive in Silicon Valley, my guess is that the most highly skilled, most hard-to-recruit employees are also the ones with the most stock.

Good news for a change.

So Juul's move is helping the company win the talent wars. It's also helped the company win the news cycle. Up until recently, most of the news about the company had to do with federal regulators accusing Juul of selling its product to minors, creating an addiction to nicotine and possibly affecting their brain development. Last month, the company closed down its Facebook and Instagram accounts and stopped selling its mango, fruit, creme, and cucumber pods in retail stores, in a bid to reduce teenage usage ahead of potential governmental action.

In the past few days, the big news about Juul has been the Altria investment. Juul's mission is to improve the lives of the world's 1 billion smokers by giving them an alternative to "combustible" cigarettes, as the company calls them. "We envision a world where fewer people smoke cigarettes," according to the company's mission statement. So selling more than a third of Juul to the nation's largest tobacco company could seem like an odd choice at best and a sellout at worst. It was a controversial enough move that CEO Kevin Burns issued a public statement offering a detailed explanation of his rationale for accepting Altria's investment and assuring the company's constituents that the deal would help Juul achieve its goal to enable more people to switch from cigarettes to e-cigarettes.

But no one is talking about that controversy anymore. Instead, they're talking about the generosity of a company that would give 1,500 employees an average seven-figure bonus just in time for last-minute holiday shopping. Way to go, Juul! And if you're an employer, have you considered what your own company could gain by giving employees headline-grabbing bonuses for 2018? Think about it. You still have a few days left.

Published on: Dec 22, 2018