AT&T Inc., the phone carrier locked in a battle with the US government over its Time Warner Inc. acquisition, lauded President Trump and Congress for their tax-cut bill and said 200,000 US workers will get a special $1,000 bonus to celebrate.
The payout is part of an effort by corporate America to defy criticism that tax cuts for companies will benefit shareholders more than workers. Boeing Co. separately pledged $300 million Wednesday for employee training, improved workplace infrastructure, and corporate giving, crediting the tax cuts.
Trump cited AT&T’s bonus plan at a news conference Wednesday. “That’s because of what we did. So that’s pretty good,” he said.
AT&T’s relationship with the Trump administration has had its ups and downs. Even as AT&T chief executive Randall Stephenson praised the president, the administration’s Justice Department is busy preparing its antitrust case against AT&T’s $85.4 billion acquisition of Time Warner. Stephenson has characterized the deal as strategically vital, but Trump has said the transaction would harm consumers.
On the other hand, AT&T scored a victory when the Republican-led Federal Communications Commission gutted utility-style regulations for Internet service providers.
AT&T has an immediate financial incentive to persuade the Justice Department to end the Time Warner suit instead of slogging through months of legal wrangling. A settlement would let AT&T avoid paying hundreds of millions of dollars in fees to creditors to amend the terms of bonds issued to finance the merger, according to Bloomberg Intelligence.
AT&T’s payment will go to union-represented, nonmanagement and front-line management employees, the company said Wednesday. The Dallas-based telecommunications giant also reiterated its plan to invest an additional $1 billion in the United States next year.
“This is a capital-freeing event,” Stephenson said of the tax bill at an Economic Club of New York luncheon on Nov. 29. If Trump signs the bill before Christmas, employees will get their bonus over the holidays, AT&T said.
Phone carriers are among the companies that are likely to increase their capital spending because of the bill, which allows immediate tax deductions for such investments. AT&T and its rivals are upgrading their networks to provide faster speeds and more ubiquitous coverage as more devices get connected to the Internet.
In the 2016 US elections, Republican candidates got 62 percent of $2.7 million in donations to federal candidates from AT&T’s political action committee that pools contributions from employees, according to the Center for Responsive Politics.
Stephenson has averaged a bonus of about $5.2 million over the past three years.