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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

#861

Post by emporas »

sotix wrote: post #431
stavros wrote: post #122

Earlier quoted context omitted.

Then maybe "taking over the market" is a bad metric, and we should be optimizing for making a company that makes the workers' lives better. The US cultural bias is showing here, as it's assumed that profit is above all else, and a company that forgoes profit to make workers happier must thus be less good. The vast majority of people in companies are workers. Let's stop optimizing for owner wealth and start optimizing…

> The US cultural bias is showing here, as it's assumed that profit is above all else I asked my Greek teacher what they biggest change she experienced moving to the US was, and she said that in Greece, her community prioritized happiness above all else, but everyone she met in the US prioritized making money. I also asked her what the financial crisis was like in Greece, and she said that you couldn’t find an empty…

If Greeks were lazy, they would not be working towards creating powerful nuclear weapons. Based on my calculations, by 2030, maximum 2035, we will have personal nuclear weapons. By we, i mean millions and billions of people on the planet, including of course Greeks.

In general, what an individual is doing with his free time, is no one's business.

Re: Every company should be owned by its employees

#862

Post by kreims »

nostrademons wrote: post #633
Nifty3929 wrote: post #594

I think it's easy to look at this with an existing, successful business in mind - but things don't always work out that way. How would a business like this get started? Usually the owner is the one who invests a lot of their own time and/or money into the business to get it off the ground in the first place. Would we be asking workers to pony up in those early years when failure is likely? With Central States, the st…

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…

ESOPs are common in the civil engineer world. I have mixed feelings about it. Private company stock valuations look like a magic show to my untrained eyes. Employee-only buying can lead to weird cash-flow schemes, like your ESOP contribution being held, unbeknownst to you, in a zero-interest slush fund until stock frees up.

What gets me most is that rank and file employees in the ESOP almost never have directly exercisable rights as shareholders to vote or have any say in the business. You don’t get to say no to a merger. You don’t get to fire the CEO when his big idea is a flop. The ESOP vote is wrapped up in a trust or some abstraction controlled by an advisor or a board probably appointed by the real board of the company. Ultimately the executive staff and hand-picked insiders will have all the real authority of ownership. Employee stock thus is not much more than a complex pension program for almost everyone. Regular employees will not be real owners in any meaningful sense unless they get into the small trust network of existing owners.

If you’re an early arrival to an ESOP with good growth potential, you will do way better than someone with a little 401K match. They also get great tax breaks. Overall they’re good for employees, but the messaging is usually misleading.

Re: Every company should be owned by its employees

#863

Post by phyzix5761 »

charles_f wrote: post #569
SoftTalker wrote: post #537

This is a really bad idea for the average worker. "We've got a number of people that have been here 15, 20 years and they have $1 million plus balances" Sounds good but they are catastrophically undiversified. Nobody should have their entire nest egg in one stock. Yes they are motivated for the company to do well, but so many things play into a stock price that are out of any one person's control. Just giving them pr…

This is so backwards! Workers are always at the mercy of shareholders (for whom apparently it's not bad to own a share?), and whom again and again will do a little layoff here and there because we need a percent or two more this quarter. Profit sharing will be the first thing to stop if results are temporarily worse. On the other hand, if the company is owned by its workers, nothing prevents them from redistributing…

What do you do when 51% of the workers vote to not redistribute profits and to lay off 10% of the other workers so the shares they own can grow by a percent or two next quarter?

edit: spelling

Re: Every company should be owned by its employees

#864

Post by triceratops »

randomdata wrote: post #443
piva00 wrote: post #398

Earlier quoted context omitted.

> Unions should put their money where their mouth is and invest in cooperatives. Unions aren't structured for investing, and that's not their reason to exist. I don't know where you are from so I can't comment on how unions function in your society, where I live they're definitely not in the same realm as a potential investor for cooperatives. You are also asking for unions to compete against VCs, and banks, let's be…

> Unions aren't structured for investing, and that's not their reason to exist. Depends on the union. A credit union is structured for investing and is literally their reason to exist.

Most marriages - a kind of union - also don't invest in cooperatives. Even if they meet the accredited investor standard.

Neither does the Union of European Football Associations, otherwise known as UEFA. They make up for it with a dope anthem.

Neither the Kalmar Union, nor any other personal union of monarchs, ever invested in a cooperative. Although some may have invested in joint stock companies, such as the various East India companies.

Maybe the Soviet Union was into worker cooperatives? Not sure.

And finally, the union of the set of workers at cooperatives and the empty set invests in cooperatives. Hey look, we found one type of union that definitely invests in cooperatives!

(I was just having fun making this as absurd as possible. Sorry, no malice intended).

Re: Every company should be owned by its employees

#865

Post by phyzix5761 »

munificent wrote: post #656

> “It's hard to build true wealth for yourself if you don't have some type of ownership in something, and it's hard for most people to get ownership in something,” Ruger says. I think this is a really good insight. But it also touches on something that many of the HN crowd, especially in the Bay Area find uncomfortable: home ownership. One of the ownership assets that is most attainable by many Americans is a little…

It costs about $400k to own a home but I can buy a share of VOO for less than $500 and own a piece of the top 500 companies in the US. Ownership of pieces of companies (stocks) is far easier and more affordable than home ownership.

Additionally, your return over the long term on personal real estate is only 4% per year while the S&P 500 average returns per year are 10%.

Home ownership is not always desirable or the best financial decision for many people.

Re: Every company should be owned by its employees

#866

Post by sgammon »

fuzzfactor wrote: post #572
freilanzer wrote: post #440

Earlier quoted context omitted.

Do you realise that CEOs don't all start at a company from day 1 and instead get hired and immediately have a huge salary? According to Wikipedia: As of 2024, Huang has been Nvidia's chief executive for over three decades, a tenure described by The Wall Street Journal as "almost unheard of in fast-moving Silicon Valley".[14] He owns 3.6% of Nvidia's stock, which went public in 1999.[5] He earned US$24.6 million as CE…

>CEOs don't all start at a company from day 1 and instead get hired and immediately have a huge salary? With 20/20 hindsight which seems like the better path now? >This should tell you all you need to know.

Man what? Is this some sort of gotcha? I honestly do not understand. Is your point that hindsight grants better insight into decision making? Or

Re: Every company should be owned by its employees

#867

Post by sotix »

negus wrote: post #619
sotix wrote: post #431

Earlier quoted context omitted.

> The US cultural bias is showing here, as it's assumed that profit is above all else I asked my Greek teacher what they biggest change she experienced moving to the US was, and she said that in Greece, her community prioritized happiness above all else, but everyone she met in the US prioritized making money. I also asked her what the financial crisis was like in Greece, and she said that you couldn’t find an empty…

> (ignorant of the history that led to 2008) can you share your version please?

I’m not sure if it’s “my version” or simply a more macro lens at history.

Like all history, it’s tricky to pick a starting point, but an easy one is the end of 400 years of Ottoman Turk occupation leading into the 20th century with the Balkan Wars, WWI, and then WWII.

Greece successfully fought off Italy in WWII but then was quickly occupied by Nazi Germany for four years. During this time, the Nazis successfully exterminated every Greek Jew. This period created extremely radical political parties that persist to this day. Following WWII, Greece then transitioned into a dictatorship lasting until 1974. Greece presently has the youngest democracy in the EU (50 years old).

The past 500 years have been hard on Greece, and the past century was no exception. Modern Greece is a young country with tons of recent scars that have led to corruption and bribery that a healthier nation may not have developed as intensely. My grandfather fled the region with his father in the early twentieth century when the Italian army began regularly hanging people in their town square. It really traumatized him.

Anyway, 2008 wasn’t some event that happened in a vacuum. There were many events that shaped the country leading up to it. To simply claim it happened because the Greeks were lazy is itself a lazy take.

A very good book on the topic is Inside Hitler’s Greece[0].

[0]: https://yalebooks.yale.edu/book/9780300089233/

Re: Every company should be owned by its employees

#868

Post by shric »

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.

Also it's generally unwise to hold onto your employer's stocks that you were granted as single stock ownership is inherently risky. There's no reason to believe your employer's shares are going to beat the market.

Also, the majority of employees in a company other than small startups do not have the ability to shift their company's success materially to make it a worthy incentive to own and hold employer issued stock.

Re: Every company should be owned by its employees

#869

Post by VirusNewbie »

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.

wow. Off by millions of orders of magnitude, impressive!

Re: Every company should be owned by its employees

#870

Post by eszed »

Gormo wrote: post #807
eszed wrote: post #509

Earlier quoted context omitted.

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.

No, I don't think that's right at all. I don't think anyone is "collectively recognizing" anything, and the reason why bicycle helmets made of cardboard and nails are not being sold is because people -- as individuals and not "collectives" -- do not in fact want them.

Forgive me some exaggeration for comic effect. What we'd actually see are helmets which advertise themselves as safe, and which look safe to uninformed external examination, some (but not all) of which are very, very cheap, but any of which (and good luck guessing which ahead of time) might as well be made out of cardboard and nails, and so when you bump it your head explodes. (Alert: black comedy again.)

Instead, in the US the DOT or the CPSC (can't be arsed to look up which) says: "every helmet sold must meet this standard of safety", and then backs that up with guns. Now you're free to price-compare, with the assurance that your head won't explode. (Yah: I keep doing it! Sorry. I like injecting levity into serious subjects. Try not to get distracted.)

Consumers, acting as individuals, have negligible influence over corporate behavior, and are easily misled.

People, acting collectively (in this case as a "government", but as other collective organizations, too - including "corporations"), can stand up to other collectives and force them to adjust their behavior in pro-social ways.

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