Share the Profits

Henry Crown, chairman of Chicago's Material Service Corp. and principal owner of Manhattan's Empire State Building, has parlayed his savvy in the financial world into a multimillion-dollar fortune. In 1945 he decided to share his savvy with employees, set up a profit-sharing plan into which the company plunked a sum equal to 15% of the employees' annual salaries. This week the employees got letters telling them of the fund's 1958 performance. The results proved that the fund's chief asset is still Henry Crown.

Crown's investment acumen puffed the fund by $1,700,000 in 1958 (plus $856,048 contributed by the company) for a healthy 40% profit on its investments. One executive's share increased $95,881 for the year, to bring his total holdings in the fund to $305,315. The lower-salaried employees did proportionately well: a secretary was informed that her profit for the year was $5,365; her annual salary is $5,000.

The average fund balance for each employee is now $8,579--and next month the company will distribute $211,993 as a bonus. Crown believes in keeping his money busy, puts the bulk of the fund into 68 issues of common stock, little into bonds. Says he: "One of the surest ways to lose money is to refuse to buy anything except securities that have done well in the past. Just when you think you're being most conservative, some new trend will knock the bottom out of your investment." When the administrator of another profit plan revealed that he was about to buy $5,000,000 worth of tax-exempt bonds, Crown snapped: "You're already tax exempt! Why pay a premium for tax exemption? Would you pay a premium for a third leg?"

The plan's performance has also paid off in better personnel relations, has cut employee turnover to a trickle. Said a girl clerk: "The only thing that would make me quit my job now is a marriage proposal--and I'm not even sure about that."

This file is automatically generated by a robot program, so reader's discretion is required.