Aramark chief executive Eric Foss on Nov. 13 touted the Philadelphia food-service company’s financial results for the year ended Sept. 30. He said Aramark had record sales and its highest profit margin ever, meeting an aggressive target set in 2015.
Three days later, Aramark let managers know that the company match on their 401(k) contributions up to 6 percent of their pay was just 25 percent for fiscal 2018, down from 50 percent the year before and 65 percent in fiscal 2016.
Adding salt to that wound was a Dec. 3 notice to “All US Bonus Eligible Employees” that annual bonuses would be late.
“This is to inform you that bonus payments, historically paid in December, will be paid in February," a letter to the employees noted. "We know this timing is an inconvenient change, and greatly appreciate everyone bearing with us as we take some extra time to finalize the process as quickly as we can.”
Aramark’s adjusted operating income in fiscal 2018 was $1.1 billion, up 15 percent from the previous year. The company employs 274,400 people globally, according to its latest annual report — about 14,000 in Pennsylvania, including nearly 6,500 in the Philadelphia region.
As of last week, managers said they had received no explanation for the delay.
An Aramark spokesperson said Tuesday that the bonuses would be paid Feb. 15, adding that the company’s annual incentive plan allows “for a payout window from December thru mid-March for salaried bonus eligible employees.” The company would not provide an exact number, but a few thousand managers are eligible for the bonuses.
Meanwhile, Aramark explained in the Dec. 21 proxy statement for its annual meeting Wednesday in Center City that it had tweaked the future pay structure of its top executives, including the expansion of clawback provisions to cover more than 165 executives, after the company a year ago received weak shareholder support for the pay packages awarded to Foss and his top lieutenants.
The company spokesperson said slashing the 401(k) match had nothing to do with meeting the 7.2 percent “adjusted operating income” margin target set in the fall of 2015. “The match has always been discretionary,” the company spokesperson said.
One manager said the 401(k) match was the lowest he could remember in decades.
The actual margin cited by Foss on the November earnings conference call was 7.05 percent, slightly lower than the 7.2 percent target. The company said it met 7.2 percent after adjusting for the cost of natural disasters and currency translation.