Hubbardton Forge Distributes $1,137,000 in Employee Bonuses

Hubbardton Forge, a manufacturer of hand-forged wrought-iron lighting, located in Castleton, VT, announced the distribution of its 2003 profit bonus, amounting to $1,137,000 total contribution, split between the employee's 401(k) retirement accounts (which are fully vested on day one) and a direct cash distribution. Divided among its 181 employees, the combination of 401(k) and cash bonus distribution averaged about 20% of each employee's annual compensation.
The premise that Hubbardton Forge has followed for over ten years is that the company needs 7% to be healthy, to grow, to provide opportunities for all employees, and to provide a return on investment. Beyond that 7%, the company has shared 50% of every dollar of profit with the employees through the bonus plan. "Although a bonus plan can never be guaranteed," explained co-founder and CEO George Chandler, "it empowers each employee and every team to play a role in the company's success. At monthly company meetings, we go over the numbers; each employee knows how we are doing and how much is being added to the bonus pool."
"We had a very strong year," CFO Don Merkle explained after the Company's annual employee meeting. "Sales were strong, process improvements allowed us to lower variable costs, internal changes kept fixed costs below budget…these are the key reasons that we are enjoying this record bonus distribution. It's also significant to note that these wins are translated into wins for our customers, as process improvements enable us to pass along savings to our customers too."
Hubbardton Forge has had twenty consecutive years of double-digit sales growth. The company was honored by Vermont Business Magazine in October with the first annual 5 x 5 x 5 Growth award given to the fastest-growing manufacturer in Vermont over the past five years. Over the last two years the number of employees has increased by 50%, with plans for more hiring in all areas of the company in 2004.
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