Cigna Corp. plans to give every employee five shares of stock, an unusual move that the company said was aimed at bolstering employee commitment as it moves ahead after the demise of its merger deal with Anthem Inc.
Cigna said the giveaway, which involves about 40,000 employees, will cost around $35 million. At the same time, Cigna will unveil a new policy that will allow employees up to four weeks of paid leave for needs such as caring for newborns and ill family members.
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A stock award to an entire employee base is very rare, particularly among large, publicly traded companies, though they are more common at small startups, often in the technology field, said Sue Holloway, executive compensation practice leader at WorldatWork, a professional association focused on employee compensation and benefits.
Often, larger companies' incentive plans involving shares are focused largely on the upper tiers of management, she said. "Pushing it down beyond the executive level is less common for large firms," she said.
Cigna Chief Executive David Cordani said the award of five shares -- each worth about $162 at Wednesday's closing price -- was intended to ensure workers felt they had an ownership stake in their employer at a time when Cigna is in a "pause moment as we relaunch into our future."
"Your people are your greatest asset, and you want to reinvest in that asset," he said.
He said Cigna also wanted to thank employees for pushing forward during nearly two years of limbo associated with the Anthem deal, which was first announced in July 2015 and was finally terminated earlier this month after courts blocked it on antitrust grounds.
Anthem and Cigna are now poised for a legal battle over the failed merger, with each seeking damages against the other. The fight is likely to be ugly and personal. Anthem has accused Mr. Cordani and his team of sabotaging the deal, while Cigna has argued that Anthem botched the antitrust defense.
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(END) Dow Jones Newswires
May 25, 2017 10:14 ET (14:14 GMT)