Fidelity employees whose base salary is lower than $75,000 will be eligible for merit pay raises this year, thanks to the strong performance of the biggest U.S. mutual fund firm, Reuters reports.
Less than two months ago, Fidelity said it did not have the budget for pay raises. Fidelity spokeswoman Anne Crowley told Reuters "more than a majority" of Fidelitys 29,000 employees would be eligible for the raises.
Robert Reynolds, vice chairman of Fidelity, said Fidelitys operating margins are solid and that its funds performances continue to improve, when he disclosed the plan of merit raises in an internal memo earlier this month. He also said the company saw $4 billion in bond fund inflows in the first quarter of 2003, and that flows into equity funds "turned strongly positive" in March. Stocks have done well since the war with Iraq has been winding down and many companies first-quarter earnings have been better than expected.
Fidelity said all company employees were eligible for merit pay raises last year. But in 2001, the company didn't give merit raises to higher-paid employees. The fund giant laid off 5% of its staff last year, in a cost-cutting measure.
Fidelity managed $799.8 billion in assets at the end of March, up 3.4% from $773.8 billion at the end of 2002.