Despite how much controversy e-cigarettes have generated lately, tobacco giant Altria will be paying a $2 million dividend to e-cigarette company Juul. Instead of doling the sizable payload out to company bigwigs, Juul announced that it will be splitting the $2 million among its 1,500 employees as a bonus.
Altria, which owns Marlboro, bought a 35 percent stake in Juul for $12.8 billion, People reported. The $2 million dividend averages out to be approximately $1.3 million per person, People noted, but that amount ultimately will vary depending up how long an employee has worked at Juul and how much equity is owned.
Because of the deal, Juul is now worth $38 billion, catapulting it up the list of high-valued startups in Silicon Valley, People reported. The U.S. Food and Drug Administration planned to announce restrictions placed on the company after disclosing that a “public health tragedy” was occurring due to a shocking number of teenagers illegally using e-cigarettes.
Juul dominates the market for e-cigarettes, controlling 74 percent. The company did decide last month to cease selling flavored pods in stores and halt social media promotions in an effort to end the “epidemic” of teenage vaping.
Juul stated that it was never the company’s goal to attract teens to its product, especially since they aren’t old enough to purchase them in the first place. Instead, the company wanted to provide an alternative to toxin-heavy cigarettes for current smokers.
Juul to Split $2 Billion Bonus Among 1,500 Employees — an Average of $1.3 Million Per Person https://t.co/TDTMbp6LXe— People (@people) December 21, 2018
However, while Juul and other e-cigarettes may contain fewer toxins than traditional cigarettes, they still provide a higher dose of nicotine and are considered to be highly addictive.
“We don’t want anyone who doesn’t smoke, or already use nicotine, to use JUUL products,” Juul CEO Kevin Burns said in a statement last month.
“We certainly don’t want youth using the product. It is bad for public health, and it is bad for our mission.”
The FDA raided Juul offices in October to seize more than 1,000 pages of documents to help their investigation into the company’s sales and marketing practices that they believe attribute to the excessive and illegal use of the product by teenagers younger than 18. People noted that undercover operations during the summer revealed that many national retailers such as 7-Eleven and Walgreens were illegally selling e-cigarettes to minors.
To try and curb this, the FDA sent warning letters to Juul and other manufacturers pointing out the problem and their lack of effort to combat it. Juul’s products are particularly popular among teens because they resemble a flash drive and come in different fruity flavors.