Every company should be owned by its employees • Hacker News Board

Re: Every company should be owned by its employees

#741

Post by bumby » Thu, Jul 25, 2024, 6:23 PM UTC

bognition wrote: post #734

overrun11 wrote: post #713

Earlier quoted context omitted.

There's no reason why this is beneficial. Money and stocks are fungible you can freely exchange one for the other as much as your heart desires. There's no difference between which one you receive.

Let's ignore that most of the places people work are not publicly traded companies and pretend that any employee could buy stock in their employer. If that were the case and employees were compensated equally in stock vs cash, then yes there is no _rational_ difference. However, most human are not rational. People like to take pride in their work and do a great job, this is amplified when they stand to directly benef…

>If that were the case and employees were compensated equally in stock vs cash, then yes there is no _rational_ difference.

Even if this assumes an equal net present value, wouldn't the volatility of stock vs. cash make a very rational difference in expected future value? For people who are risk adverse, the cash would probably be preferred; for those who are less risk adverse, the opposite is probably true.

Re: Every company should be owned by its employees

#742

Post by jackcosgrove » Thu, Jul 25, 2024, 6:26 PM UTC

I've wondered if there's some way to structure an accelerator along similar lines, if not employee ownership then a partnership.

For example, it's well known that startups are risky. VCs mitigate this risk by spreading their funding across many startups. Could founders do the same with their equity? Consider an accelerator class with thirty companies. As a condition of being in the accelerator, each founder could agree to give X% of options to every other founder in the class. If one of the companies takes off, the other founders could wind down their own (probably failing) companies and join the one success.

You would probably have to tinker with the ratios to provide good incentives, i.e. every founder doesn't get an equal share of every company; the winning founders get the largest share among their class, etc. And the accelerator would have to exercise a lot of quality control with whom they admit.

But still it's an acknowledgement that business success is in large part random and diversification is how you account for that. Or rather, it's an extension of that acknowledgement to the founding/managing class of early ventures, rather than reserving it for investors.

Re: Every company should be owned by its employees

#743

Post by lupusreal » Thu, Jul 25, 2024, 6:29 PM UTC

kerkeslager wrote: post #710

lupusreal wrote: post #469

Earlier quoted context omitted.

Most companies aren't "major companies". I'm for busting up the big monopolies, but I'm not for throwing the baby out with the bath water and imposing communist reforms on all businesses, most of which are small and generally well behaved, just because some big ones with pathological behavior exist.

So if you acknowledge that pathological behaviors exist, what's the problem with regulating against those pathological behaviors? Given you seem to think most companies are small and well-behaved, it won't affect those companies.

I support regulating businesses and never suggested otherwise!

Re: Every company should be owned by its employees

#744

Post by stagger87 » Thu, Jul 25, 2024, 6:30 PM UTC

victorbjorklund wrote: post #677

nostrademons wrote: post #633

Earlier quoted context omitted.

The article is arguing for ESOPs, basically stock options for employees. The examples cited are actually quite tame by tech industry standards: "During Central States’ worst year, employees earned the equivalent of 6 percent of their pay in stock, during their best they earned 26 percent." By contrast, FANG employees routinely make >50% of their compensation in stock, and it can be up to 80% in good years. As for how…

Getting some of your salary in stock options isn't really an employee owned company. How many % of total Google shares are owned by employees (excluding the founding employees)? 0,0000000001%? At least 50% would be required for it to be viewed as an employee owned company.

In an ESOP, employees typically own 100% of the stock.

Re: Every company should be owned by its employees

#745

Post by lupusreal » Thu, Jul 25, 2024, 6:32 PM UTC

specialist wrote: post #501

lupusreal wrote: post #469

Earlier quoted context omitted.

Most companies aren't "major companies". I'm for busting up the big monopolies, but I'm not for throwing the baby out with the bath water and imposing communist reforms on all businesses, most of which are small and generally well behaved, just because some big ones with pathological behavior exist.

There's A LOT of daylight between liberal capitalism and communist socialism. The social democracies, a middle path, as the Nordic countries have experimented with, seem to have done quite well. And there's now strong evidence that our system (neoliberalism) has stunted economic growth. Regardless... I support simple social reforms, like sovereign wealth funds (Alaska, Norway) and universal healthcare, greatly reduci…

This discussion is about the proposal to, by law, force all businesses to be workers cooperatives. That's not the liberal capitalism found in Nordic countries, it's communism.

Re: Every company should be owned by its employees

#746

Post by BeFlatXIII » Thu, Jul 25, 2024, 6:32 PM UTC

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…

Regarding point B, how often do they prioritize worker welfare to the point that they do the equivalent of cutting through the branch they sat on?

Re: Every company should be owned by its employees

#747

Post by unbalancedevh » Thu, Jul 25, 2024, 6:33 PM UTC

WalterBright wrote: post #640

li2uR3ce wrote: post #458

Earlier quoted context omitted.

> companies need to attract customers - i.e. make their lives better. Companies need to sell the *idea* of making lives better. They don't actually have to make a customer's life better and many don't despite selling lots of product. Profitability is not a strict function of quality. If it were, we'd not give the slightest fuck about monopolies. It takes a great amount of effort to get companies to compete on "making…

Do you buy things you don't want?

People get convinced in the heat of the moment that they want something, when if they had time to reflect/research/etc. they might very well conclude that their money is better spent elsewhere. Marketing in a capitalist system is highly motivated to make you think you want or need something more than you actually do.

One tactic that some people find helpful when they want to buy a discretionary item is to wait a few days/weeks, and make sure that it's not just a whim that they'd regret.

Re: Every company should be owned by its employees

#748

Post by stagger87 » Thu, Jul 25, 2024, 6:33 PM UTC

overrun11 wrote: post #713

nostrademons wrote: post #633

Earlier quoted context omitted.

The article is arguing for ESOPs, basically stock options for employees. The examples cited are actually quite tame by tech industry standards: "During Central States’ worst year, employees earned the equivalent of 6 percent of their pay in stock, during their best they earned 26 percent." By contrast, FANG employees routinely make >50% of their compensation in stock, and it can be up to 80% in good years. As for how…

There's no reason why this is beneficial. Money and stocks are fungible you can freely exchange one for the other as much as your heart desires. There's no difference between which one you receive.

In an ESOP, stocks are not normally fungible and cannot be traded easily. Usually they are bought back post employment. In my case I was able to either get cash or have it put into a 401k.

Re: Every company should be owned by its employees

#749

Post by overrun11 » Thu, Jul 25, 2024, 6:33 PM UTC

bognition wrote: post #734

overrun11 wrote: post #713

Earlier quoted context omitted.

There's no reason why this is beneficial. Money and stocks are fungible you can freely exchange one for the other as much as your heart desires. There's no difference between which one you receive.

Let's ignore that most of the places people work are not publicly traded companies and pretend that any employee could buy stock in their employer. If that were the case and employees were compensated equally in stock vs cash, then yes there is no _rational_ difference. However, most human are not rational. People like to take pride in their work and do a great job, this is amplified when they stand to directly benef…

The private company case is worse because now it's completely illiquid. This all strikes me as a rich person's idea of what poor people want. Someone making $15/hour wants the $15 not $10 + equity in a private company worth $5 which they cannot sell but gives them 1/1000 voting rights and maybe sometimes a 7 cent a quarter dividend subject to board approval and market whims.

Most workers are not sophisticated investors and I'd rather they put excess savings into broadly diversified index funds instead of low quality equity in whatever small business they happen to be working at.

Re: Every company should be owned by its employees

#750

Post by rangerelf » Thu, Jul 25, 2024, 6:35 PM UTC

WalterBright wrote: post #640

li2uR3ce wrote: post #458

Earlier quoted context omitted.

> companies need to attract customers - i.e. make their lives better. Companies need to sell the *idea* of making lives better. They don't actually have to make a customer's life better and many don't despite selling lots of product. Profitability is not a strict function of quality. If it were, we'd not give the slightest fuck about monopolies. It takes a great amount of effort to get companies to compete on "making…

Do you buy things you don't want?

No, but it's very probable li2uR3ce bought things that were portrayed as being much better than they actually were. These days "profitable" for the seller rarely equates with "good value" for the buyer.