Eastman Kodak Analysis

Benefiting the Employee

Beyond his inventive genius, Eastman blended human and democratic qualities, with remarkable foresight, into the building of his business. He believed employees should have more than just good wages -- a way of thinking that was far ahead of management people of his era.

Early in his business, Eastman began planning for "dividends on wages" for employees. His first act, in 1899, was the distribution of a substantial sum of his own money -- an outright gift -- to each person who worked for him.

Camera manufacturing in the 1890's.

Later he set up a "Wage Dividend," in which each employee benefited above his or her wages in proportion to the yearly dividend on the company stock. The Wage Dividend was an innovation, and represented a large part of the distribution of the company's net earnings.

Eastman felt that the prosperity of an organization was not necessarily due to inventions and patents, but more to workers' goodwill and loyalty, which in turn were enhanced by forms of profit sharing.

In 1919, Eastman gave one-third of his own holdings of company stock -- then worth $10 million -- to his employees. Still later came the fulfillment of what he felt was a responsibility to employees with the establishment of retirement annuity, life insurance, and disability benefit plans. With these benefits, and the Wage Dividend, employees could confidently look forward to a more secure future.

Carl W. Ackerman, a biographer, writing in 1932, said: "Mr. Eastman was a giant in his day. The social philosophy, which he practiced in building his company, was not only far in advance of the thinking during his lifetime, but it will be years before it is generally recognized and accepted."

Giving Away His Fortune

Eastman is almost as well known for his philanthropy as he is for his pioneering work in photography. In this field, as in others, he put the direction of an enthusiastic amateur to work.

He began giving to nonprofit institutions when his salary was $60 a week -- with a donation of $50 to the young and struggling Mechanics Institute of Rochester, now the Rochester Institute of Technology.

He was an admirer of the Massachusetts Institute of Technology because he had hired some of its graduates, who had become his best assistants. This admiration, after thorough study, was translated into a handsome gift to M.I.T., eventually reaching $20 million. It was given anonymously from a "Mr. Smith," and for several years the identity of mysterious "Mr. Smith" was speculated about, even finding expression in a popular M.I.T. song.

Dental clinics were also of great interest to Eastman. He devised complete plans and financial backing for a $2.5 million dental clinic for Rochester. He then started a large-scale, remedial dental program for children. Dental clinics were also given to London, Paris, Rome, Brussels and Stockholm.

When asked why he favored dental clinics, he replied, "I get more results for my money than in any other philanthropic scheme. It is a medical fact that children can have a better chance in life with better looks, better health and more vigor if the teeth, nose, throat and mouth are taken proper care of at the crucial time of childhood."

Eastman loved music and wanted others to enjoy the beauty and pleasure of music. He established and supported the Eastman School of Music, a theatre, and a symphony orchestra. "It is fairly easy to employ skillful musicians. It is impossible to buy appreciation of music. Yet without a large body of people who get joy out of it, any attempt to develop musical resources of any city is doomed to failure," he said. So his plan had a practical formula for exposing the public to music -- with the result that the people of Rochester have for decades supported their own philharmonic orchestra.

Interest in hospitals and dental clinics had grown with Eastman's work and study of the field. He promoted and brought to fruition a program to develop a medical school and hospital at the University of Rochester, which became as nationally prominent as the university's music school. Rochester is filled with Eastman landmarks that contribute to the enrichment of community life.

His sincere concern for the education of African Americans brought gifts to the Hampton and the Tuskegee Institutes. One day in 1924, Eastman signed away $30 million to the University of Rochester, M.I.T., Hampton and Tuskegee. As he laid down the pen he said, "Now I feel better."

In explaining these large gifts, he said, "The progress of the world depends almost entirely upon education. I selected a limited number of recipients