MO Altria Group Inc

By Jennifer Maloney 

The holidays just got a lot happier for the 1,500 employees of Juul Labs Inc.

That's because more than $2 billion of the $12.8 billion that Altria Group Inc. is investing in the e-cigarette maker is cash going directly into its workers' pockets. That comes out to about $1.3 million per employee, though the money won't be distributed equally.

As part of the deal, employees will receive $150 for every share or restricted stock unit they own. Because of a recent hiring spree, most staffers have been at the company for less than a year.

Those hired within the past six months will receive payments based on the number of units that will have vested six months from the date they begin vesting. The payouts will come for some employees as early as Christmas.

On top of that, Juul is offering retention packages. Each employee will receive a special bonus, equal to four times his or her usual bonus, and paid out in four installments over the next two years. That could entice some staffers to stay despite misgivings about the startup's new alliance with a tobacco company, one current employee said.

At an all-hands meeting Thursday, Juul co-founder Adam Bowen acknowledged that a partnership with the Marlboro maker was counterintuitive, given the company's mission of helping cigarette smokers switch to less harmful products.

At the meeting, staffers applauded when CEO Kevin Burns displayed a mock-up of a Juul promotion inserted into a pack of Marlboros -- one of the marketing tools the startup now has at its disposal.

Altria's cash investment values Juul at about $38 billion, vaulting the closely held company's valuation past public companies such as Ford Motor Co. and Target Corp.

Forbes on Thursday declared Mr. Bowen and co-founder James Monsees billionaires. The duo, former smokers who met as graduate students at Stanford University, set out to create an alternative to cigarettes. The company began as Ploom Inc., then became Pax Labs Inc., and in 2017 Juul was spun off as a closely held company.

Write to Jennifer Maloney at jennifer.maloney@wsj.com

(END) Dow Jones Newswires

December 21, 2018 10:28 ET (15:28 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.