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Every company should be owned by its employees

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Re: Every company should be owned by its employees

#241

Post by aziaziazi »

_thisdot wrote: post #45
xmprt wrote: post #18

I think the most surprising thing about trends in modern executive class pay is just how steep it is compared to the median employee. It makes me wonder why shareholders outside the company are happy with it. For example, the Boeing CEO made 22M in 2022 and 32M in 2023. I'd argue that he did a much worse job in 2023 than in 2022 but somehow got paid almost 50% more. Even Jensen Huang, CEO of Nvidia, is "only" being p…

Counter point. Most of salary is decided based on how much of a loss it would be if you left. A CEO leaving a company can immediately lead to serious consequences whereas an individual employee can leave and no one might bat an eye

> A CEO leaving a company can immediacy lead to serous consequences

Is it something that has been study or observed? Most company are resilient enough to handle the leaving of an individual, being a Chief or not. The opposite would be a flag for an instable company.

Far tangent exemple: Belgium without government.

Re: Every company should be owned by its employees

#242

Post by randunel »

rakoo wrote: post #234
arrowsmith wrote: post #200

Earlier quoted context omitted.

Overoptimize on worker happiness -> underoptimize for profit -> company goes bust -> workers lose their jobs -> no worker happiness

> underoptimize for profit -> company goes bust That's a wild statement that is going to need some strong proof

Proof of what? Proof that non profitable companies go bust, which is what your quote says? Or proof that over optimising for employee happiness results in under optimising for profit, which you haven't quoted?

Re: Every company should be owned by its employees

#243

Post by Nasrudith »

sgu999 wrote: post #201
daedrdev wrote: post #40

If you have every company owned by its employees, it can cause big problems for society. There are many arguments to make, such as how investment and hiring would decrease but an interesting one is that it prevents people from de risking their savings. Normally, if your company goes under your savings which are invested in a wide range of companies will be fjne. But since we cant invest in other companies your saving…

Your savings don't need to be tied to the stock market, it's actually not the case for most people outside of the US afaik. Your retirement pension even more so. How we choose to redistribute the extra wealth generated by others is mostly political.

Isn't the case for most people outside the US government funded pensions essentially just "the Stock Market but with extra steps"? If the market crashes pensioners are going to have a bad time.

Re: Every company should be owned by its employees

#244

Post by typicalset »

dash2 wrote: post #94

Employee stock options are not a new idea, obviously. If the story is "every company should offer stock options to its employees", then sure, that's often a good business plan. The reason not every company does it to all its employees is probably that for those employees, it wouldn't affect incentives much and it would make payment subject to the vagaries of the stock market. Your barista at Starbucks is not going to…

> If the story is "all companies must be fully employee-owned workers' cooperatives", then first, note that you are calling for a restriction on workers' rights: they have to be given part of their pay as stocks, and they can't sell them freely.

This is simply not true. Many workers' coops issue one share per worker (there may not even be stock), which affords them one vote in company matters. In such a scenario the share may not be bought or sold, as it is a case of one share if and only if a member. It is not correct to represent proportional democratic control of a workplace as somehow a restriction on workers rights.

Re: Every company should be owned by its employees

#245

Post by chii »

rich_sasha wrote: post #190

I was wondering about a similar, but different mechanism. There's a pool of shares that are effectively rented for free to employees, and part of their pay is the dividend they get. When you join, you get them for free (maybe there's some vesting schedule), when you leave they go away, not as a sale but just for free again. Soo... It's not like you're always inflating your share base with options. Just part of what p…

> every employee is best served by entirely optimizing only their own utility.

but this would still remain the case in the scheme proposed.

Even suppose those employee-class shares get a voting right, they would want to maximize their own benefits: such as higher dividend payout. As for why - imagine if there's a decision between long term investment in plant & equipment, vs paying out dividend today. An employee who might not wish to stay will vote to get the dividend, as their "share" is going to be gone by the time the long term investment pays off.

So the only way to align employee and owners, is to have employees own regular shares.

Re: Every company should be owned by its employees

#246

Post by choeger »

While this might sound great at first, it comes with a tangible risk: In a worker-owned enterprise, workers cannot freely sell their stock (or it would not be worker-owned for long). So their wealth is tied to the company and the value of every stock hinges on the company's long-term success. Imagine going into retirement with this six-year plan to learn that the company goes bankrupt one year later.

Of course, there are probably ways to try to minimize the risk (e.g., saving the profits for the payout and keeping them separate from business cash) but it won't be very diverse. Or maybe several such companies could put their stocks in a basket and allow employees to diversify their portfolio.

So I think it's a great idea as an add-on, but no one should bet their retirement on it.

Re: Every company should be owned by its employees

#247

Post by phoyd »

Giving employees stock options does not solve the "employes should own the company" problem, when there is a market to sell the stock. Shareholders and employees have different goals and interests regarding the company. For example, the employees they may have to decide on the elimination of their own jobs in order to secure the value of their stock holdings (which btw. would make the company not owned by their employees anymore)

A more interesting approach would be a model where being a employee automatically gives you a vote on company wide decisions including. the distribution of profits, just how being a cititzen of a democratic country gives you a vote on the fate of your country (similar to the Mondragon Corporation in Spain)

Re: Every company should be owned by its employees

#248

Post by throwaway2037 »

nutrie wrote: post #166
eru wrote: post #151

Earlier quoted context omitted.

German companies come pretty close. See https://en.wikipedia.org/wiki/Codetermination_in_Germany Also see how many cooperatives are run. You can definitely make these kinds of things work and eg worker cooperatives are generally legal to set up around the world, but they don't necessarily work any better than vanilla companies (and that includes not necessarily being better for the employees).

> German companies come pretty close. Worked for one with this setup. It was all great until the stock price fell to ~20 % of its original value and has stayed that way since. Employees didn't like it, which was kinda funny (it's a risk they signed up for).

Jeez, that must have been some giant scandal to lose 80% of market cap. What is accounting fraud?

Re: Every company should be owned by its employees

#249

Post by phkahler »

cen4 wrote: post #222
dash2 wrote: post #94

Employee stock options are not a new idea, obviously. If the story is "every company should offer stock options to its employees", then sure, that's often a good business plan. The reason not every company does it to all its employees is probably that for those employees, it wouldn't affect incentives much and it would make payment subject to the vagaries of the stock market. Your barista at Starbucks is not going to…

Now please use the barista argument on what house wives should be paid.

>> ...what house wives should be paid.

House wives are often very well compensated. They have a home they don't pay for. They often have a bank account they can use to cover expenses (effectively direct deposite). The entire reason alimony exists is an acknowledgement that she has effectively been getting that benefit from the marriage and is not prepared to abruptly lose it in a divorce even after splitting the assets. Assets? Right, that's also part of the compensation package.

Re: Every company should be owned by its employees

#250

Post by germandiago »

ffgjgf1 wrote: post #28
germandiago wrote: post #17

Earlier quoted context omitted.

I see. And you keep looking at billionaires instead of regulations or the things that make it possible, like housing regulations (talking Europe now, Idk America well enough). If you really set the market more free, you will automatically have more reasonably wealthy people bc of competition. When thede few billionaires exist due to governments favors we should think what is wrong with some people selling favors to o…

Free markets almost never can survive longterm without (sometimes extensive) regulation. Historically there might have been a few exceptions to that, but basically always you have a few good years and then the winner(s) who emerges starts abusing their position (even without any regulation that might make it easier for them to do that). Unregulated markets tend to be inherently unstable. And it’s not so much less vs…

I jsut know that compare to 30-40 years ago we have been following this path of increasing regulations and the results are starting to be harmful.

However, some people ask for more of this, instead of less. It is curious when the solution to a problem is throwing more of the problem at it. If it was a transition period of some kind where the effects of some policies cannot be seen yet... but it is years and years and years. The result is high debt and collusion, or that is more of what I see around me, in all Europe. It is a chain of favors and they regulate more and more aspects of our lives, yet we are not better. We pay more, the services are not better either.

I think something is broken here and I am very aware that the result is not giving more control to regulators to even smash us more. It is quite the opposite: leave people alone. At least, this is my experience right now. I can assure that 25 years ago my country had much more balance in most areas and people were more free. I am almost 41 FWIW.

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