(Bloomberg) — Prudential Financial Inc. is spending about $57 million to reward workers after topping Chief Executive Officer John Strangfeld’s profitability goal last.
Prudential, the No. 2 U.S. life insurer, is distributing a one-time bonus of $1,300 to about 44,000 employees who don’t usually get such payouts, said Bob DeFillippo, a company spokesman. The cost hurt fourth-quarter earnings by about 9 cents per share, Strangfeld said on a conference call with analysts today.
Prudential’s adjusted return on equity in 2013 was 15.2 percent, beating Strangfeld’s target of 13 percent to 14 percent. The Newark, New Jersey-based insurer didn’t announce the payout when it reported earnings yesterday. Profit missed estimates by 3 cents a share, sending the stock lower and prompting remarks on the call about the lack of disclosure.
“It changes the perception of your quarterly results overall,” John Nadel, an analyst at Sterne Agee & Leach Inc., told Prudential executives. “ I’m just trying to understand why it wasn’t necessarily called out.”
Strangfeld said the insurer didn’t release more information last night because the company hadn’t yet given employees details about the payout. The company told employees today, DeFillippo said.