Yahoo Finance | Delta started sharing profits with its 100,000 employees two decades ago. CEO Ed Bastian says shareholders love it

Delta started sharing profits with its 100,000 employees two decades ago, with CEO Ed Bastian saying shareholders have embraced the program. Launched in 2007, the profit-sharing initiative began modestly but grew significantly after Delta emerged from bankruptcy under Bastian’s leadership, transforming into the $43.6 billion most profitable U.S. airline. The formula allocates 10% of the first $2.5 billion in adjusted profits and 20% of anything above that, resulting in an effective 15% return on profits for employees.

This year, Delta distributed over $1 billion to its workforce—marking the ninth time in the past decade it surpassed that threshold—and has paid out more than $11 billion since 2015, exceeding the total profit-sharing of all other U.S. airlines combined. Employees receive roughly four weeks’ extra pay annually, and nearly 90% say they plan to stay long-term, well above the Fortune 100 Best Companies average. Bastian attributes this loyalty to a culture where sharing success is central, which in turn drives customer satisfaction and financial performance.

The program initially faced skepticism from shareholders who viewed it as giving away "their money," but Bastian maintained it was a win-win: motivated employees serve customers better, which boosts shareholder returns. Today, investors support the model so strongly that Bastian says they would oppose any attempt to end or alter it. Delta’s profitability remains highest among U.S. carriers even after profit-sharing payouts, creating what Bastian calls a "virtuous circle" where caring for employees leads to customer loyalty, which rewards shareholders—proving that taking care of people is not just ethical, but profitable.

Read more: https://finance.yahoo.com/markets/stocks/articles/delta-started-sharing-profits-100-152451804.html

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