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

Re: Every company should be owned by its employees

#771

Post by parpfish » Thu, Jul 25, 2024, 7:25 PM UTC

overrun11 wrote: post #749

bognition wrote: post #734

Earlier quoted context omitted.

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 investo…

how does equity in privately held companies work? I get that some share provide voting rights, but that's not generally what to employees.

when the people in the article cash out their ESOP shares to buy a house... who's on the other end of that deal to buy those shares? is it some other employee? Wouldn't that mean that money is just switching hands between your employees rather than helping all your employees get rich?

related: i exercised some options for a startup that i used to work at a few years ago. they're now >10 years old and financially healthy, but no IPO in sight. what's the point of those shares if there's never an exit?

Re: Every company should be owned by its employees

#772

Post by andrepd » Thu, Jul 25, 2024, 7:29 PM UTC

apantel wrote: post #534

bccdee wrote: post #466

Earlier quoted context omitted.

> We forcibly allocate capital less efficiently Efficiency with regard to what goal? The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. Billionaires have far more capital than they know what to do with, and since they're unaccountable for their investment choices, they strongly tend to steer the economy toward vanity projects. Meanwhile, many families ca…

The system is not perfectly efficient because humans aren’t efficient. I think the idea is, keeping a market relatively free (with a sane amount of regulation) allows capital to seek returns. This leads to a lot of independent, decentralized value production, like startups popping up out of nowhere because some founders have an idea and attract capital. The thing is, people who pile up capital don’t have to be effici…

>If you wanted to implement a perfectly-efficient system, would that mean banning the fulfillment of any desire that wasn’t strictly a need? I don’t think anyone would want to live in such a system.

Holy mother of slippery slopes x) Do you think $current_economic_system can be improved? Ah so you want to ban fulfillment of any desire? Sheesh

Re: Every company should be owned by its employees

#773

Post by baggy_trough » Thu, Jul 25, 2024, 7:30 PM UTC

eszed wrote: post #509

nindalf wrote: post #468

Earlier quoted context omitted.

We actually have two mechanisms: laws/regulations and customers voting with their wallet. Since we see that a majority of customers consistently go with the cheaper option, we know how they feel. So the "better" firm gets outcompeted. So regulation, you say. But those regulations are set by governments voted in by the same consumers. Their preference for lower prices is clear, and government follows their preference.…

We already do this in lots of areas. It would be "cheaper" - and doubtless more profitable; lots of people would choose them! - to produce / buy, say, bicycle helmets that are made out of cardboard and nails, but we collectively recognize that would be counter-productive and require that only the "expensive" types be offered for sale. I'm sure there are some people who are upset by this.

It would be hard to sell bicycle helmets made out of cardboard and nails, so no collective recognition is necessary.

Re: Every company should be owned by its employees

#774

Post by robertlagrant » Thu, Jul 25, 2024, 7:32 PM UTC

adrian_b wrote: post #417

robertlagrant wrote: post #220

Earlier quoted context omitted.

> "The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself." The board decides the CEO's salary, no?

The board members are frequently CEOs of other companies, where the CEO whose salary is decided may be a board member.

Can you cite this, please?

Re: Every company should be owned by its employees

#775

Post by niederman » Thu, Jul 25, 2024, 7:35 PM UTC

I find it incredibly ironic that this article is describing this system as a positive form of capitalism when in fact having workers own the capital is the _definition_ of socialism.

Re: Every company should be owned by its employees

#776

Post by YokoZar » Thu, Jul 25, 2024, 7:35 PM UTC

jonas21 wrote: post #763

victorbjorklund wrote: post #677

Earlier quoted context omitted.

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.

Google spent $22 billion on stock-based compensation in 2023 [1]. That's over 1% of the stock of the company transferred to employees in one year. Now, many people probably sell that stock as soon as they can, so the employee ownership isn't cumulative over the years. But it would be quite hostile to employees to stop them from doing this in an effort to make the company more employee-owned. [1] https://abc.xyz/asset…

Indeed, employees often effectively sell their stock to existing owners via share buybacks.

This seems entirely rational to me - I've bet a significant part of my career on the success of the company I work for, why should I also bet my savings? Diversification has real value, and going all-in on one company is just a bad bet.

Re: Every company should be owned by its employees

#777

Post by sofixa » Thu, Jul 25, 2024, 7:36 PM UTC

Miner49er wrote: post #715

sofixa wrote: post #24

Earlier quoted context omitted.

Individual companies being owned by their employees isn't socialism. For that matter, the Soviet Union wasn't socialist either - the workers owned nothing, the state owned everything. All the land, all the factories, all the manufactured goods.

> Individual companies being owned by their employees isn't socialism. Actually, yes, this is the literal definition of socialism. It's workers owning the means of production.

Not individual companies, but at the wider scale. Socialism is an economic system, not the specific act of one group of employees owning where they work.

In the same way that China having private companies doesn't make it capitalistic.

Re: Every company should be owned by its employees

#778

Post by niederman » Thu, Jul 25, 2024, 7:36 PM UTC

I find it ironic that this is being described as some better form of capitalism when in fact having the workers own the capital is quite literally the _definition_ of socialism.

Re: Every company should be owned by its employees

#779

Post by robertlagrant » Thu, Jul 25, 2024, 7:38 PM UTC

Gormo wrote: post #414

Nevermark wrote: post #267

Earlier quoted context omitted.

It would be nice to have a legal framework for companies to increase employee ownership, but be able to do it incrementally with no requirement to go straight to 100%. Or ever. For instance, even public companies might increase the percentage of employee ownership over time. But capital needs could still be met, as the public or private non-employee stock class would still exist.

> It would be nice to have a legal framework for companies to increase employee ownership, but be able to do it incrementally with no requirement to go straight to 100%. Or ever. But this framework exists, and is used by a huge number of firms.

"Legal framework" is a euphemism for "mandate by force". Of course companies do this today, as you say. The commenter wants to force them.

Re: Every company should be owned by its employees

#780

Post by andrepd » Thu, Jul 25, 2024, 7:39 PM UTC

WalterBright wrote: post #647

bccdee wrote: post #466

Earlier quoted context omitted.

> We forcibly allocate capital less efficiently Efficiency with regard to what goal? The current allocation of capital in the US is quite inefficient if we're interested in the welfare of the public. Billionaires have far more capital than they know what to do with, and since they're unaccountable for their investment choices, they strongly tend to steer the economy toward vanity projects. Meanwhile, many families ca…

Without American billionaires, there would be no SpaceX. YCombinator is billionaires investing in startups.

This is literally like a peasant in the middle ages saying "without your Lord you wouldn't have a mill".