ost, but not all, Fidelity workers will get a pay raise after all. Earlier this year the Boston Behemoth had said that it would forego this year's merit raises and revisit the matter later in the year. Fidelity typically awards the raises at the end of June.
The loosening of the purse strings at Fidelity likely reflects both the stabilizing stock market and the string of five consecutive months during which Fidelity has seen positive cash flows into its funds.
The latest word out of Boston is that workers earning less than $75,000 will be eligible for merit increases this year after all, repots the Boston Herald
. Those earning more than $75,000 will have to wait until next year. This marks the second time in the past three years that Fidelity has limited merit raises.
based its report on an internal memo authored by Robert Reynolds
, chief operating officer. Reynolds was also the author of the February 14 dated memo that said "there will be no merit cycle increases planned for 2003." That memo called the suspension a "temporary but prudent measure required in response to current economic conditions" and added that "as business conditions improve, we will review this decision."
Obviously, business conditions must have improved. At least a little.
Reynolds' memo said that Fidelity is "navigating successfully though these tough times," reports the Herald
. "Our operating margins are solid. Our fund performance continues to improve. We have brought $4 billion to our bond funds in the first quarter of this year, and flows into our equity funds turned strongly positive in March."
"And while today's decision means that some of our employees will have to forgo salary increases this year, we trust that you will join us in recognizing that it is the best choice for Fidelity at this time," wrote Reynolds.
Fidelity is privately owned and Edward "Ned" Johnson and his daughter Abigail hold a controlling interest.
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