Industria del Diseño Testil SA, the Spanish family-controlled company better known as Inditex, will share 10% of its annual increase in profit with employees who have been with the company for more than two years,
the
Wall Street Journal
reported
.
The company, which is the parent of clothing retailer Zara, reported a 5.2% increase in net profit to €2.5 billion ($2.65 billion) in the year that ended January 31. Its sales rose 8.3% to €18.12 billion in that period, the
Journal
article said.
About 70,000 employees will receive a cash bonus if profit increases, the article said. The plan will be in effect for two years and is capped at 2% of annual profits, the report noted.
Inditex also said it plans to pay a dividend of 52 European cents per share on 2014 results, a 7.5% increase from a year earlier. The company will distribute €1.62 billion in cash to shareholders. More than half that amount will go to retired founder Amancio Ortega and his family, the
Journal
article said.
Inditex's main rival, Sweden's Hennes & Mauritz AB, another family-controlled company, this year distributed 303 million Swedish kronor ($34.5 million) to employees with a tenure longer than five years, the equivalent of 10% of its profit growth, the
Journal
report noted. (Source:
Wall Street Journal,
March 18, 2015.)
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