Fidelity Investments, responding to what it called continuing challenges as the recession lingers, told employees in all but its lowest-echelon bonus pool that they will not get merit increases this year.
In a companywide memo on Wednesday, president Rodger Lawson said the only employees eligible for raises — which take effect in July — are those eligible for bonuses equal to 15% of their base salary, a population that comprises the “lower and middle level of our compensation structure,” said Fidelity spokeswoman Anne Crowley.
Mr. Lawson also warned all employees that their year-end bonus and profit-sharing awards are likely to be slashed this year. Bonuses range from as low as 12% to greater than 100% of base pay, she said.
Boston-based Fidelity for the past several years has given most employees 10% of their salaries in profit-sharing.
“Our president is saying it is quite probable, given business forecasts, that we won’t be funding that at as high a percentage,” Ms. Crowley said. “Our bonus-pool dollars also may be lower than they’ve been in past years.”
Fidelity late last year said it would lay off at least 3,000 employees by the end of March. Mr. Lawson’s memo did not address layoffs, and the company declined to comment beyond saying that the target has been reached.
“Fidelity is, and has been, ahead of the downturn in the financial markets and as a result is positioned very well for the future,” Ms. Crowley added in an e-mail. “While we cannot know when the economy will turn around, we will continue to recognize and reward the contributions that each individual and business unit makes.”
Fidelity employs about 40,000 people worldwide and had $2.4 trillion in assets under custody, including managed assets of nearly $1.2 trillion, as of Feb. 28.