‘People will remember this’: All BankUnited employees get $5,000 bonus

Here’s one more way that wage pressure is impacting banks: End-of-year bonuses have gotten bigger.

Around the holidays, every employee at BankUnited — from tellers to business line heads — received a special $5,000 bonus. The Miami Lakes, Florida, company spent nearly $7 million on the payouts, which were made in recognition of workers’ hard work throughout the COVID-19 pandemic, and were intended to boost employee morale.

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“I cannot tell you the amount of goodwill that the company earned through this $7 million investment,” Chairman, President and CEO Rajinder Singh said during a recent conference call. “I know this will provide a return, which is hard to measure over the many, many years to come. People will remember this. It just changed the dialogue in the company.”

The timing of the bonuses near the holidays further sweetened the deal, Singh added.

A number of banks paid special bonuses to their frontline employees early in the COVID-19 pandemic, and at least a few have done so recently.

First Horizon in Memphis, Tennessee, gave $3 million in bonuses to frontline employees during the fourth quarter, executives said on a recent conference call. Fulton Financial Corp. in Lancaster, Pennsylvania, paid $2.3 million in bonuses to employees who don’t participate in other bonus programs, executives said.

As the pandemic enters its third year, employers are confronting rampant workplace burnout and flagging morale. In the banking industry and elsewhere in the U.S. economy, employee turnover is high. Banks have been hiking wages to stay competitive in an unusually tight labor market.

The $5,000 payments at BankUnited are different from more traditional, performance-driven bonuses, according to Singh. He described them as “a very wise, long-term investment in our people.”

“I'm glad we could do this, and we have the earnings or the one-time earnings to be able to fund this,” Singh said. “That's really what the thinking was.”

BankUnited, which has $36 billion of assets, reported fourth-quarter net income of $125.3 million, which was 46% higher than in the same period in 2020. Earnings per share of $1.41 beat the mean estimate of analysts surveyed by FactSet Research Systems by 54 cents.

Noninterest income grew 29% to $45.6 million, largely because the company sold a portfolio of single-family residential loans for $18.2 million during the quarter.

Expenses increased 52% from the year-ago quarter, driven in large part by higher employee compensation and higher professional fees related to a tax settlement with the Florida Department of Revenue.