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I've always been curious about trying a system that rewarded people for the value they created now, instead of owning shares/options and waiting for a liquidity
by pm 10y ago
I've always been curious about trying a system that rewarded people for the value they created now, instead of owning shares/options and waiting for a liquidity event. Bonuses are the traditional option I guess, but is there anything else? How else might you distribute a portion of funds earned by the company in a meaningful manner to employees?
- EpicEng 10y agoSalary?
- williamscales 10y agoSome companies have a profit-share program where they pay a percentage of the profit earned that year to employees in addition to salaries.
- moxious 10y agoThat's great but only for profitable companies which doesn't describe most startups. The other reason they usually use equity is because they're relatively cash poor
- williamscales 10y agoThe company I work for has in past years paid a bonus based on metrics that try to approximately characterize the value being created at the company. This could be considered an alternative to profit-share for companies that have no profit.
- pm 10y agoI was leaning more towards a profitable business than a startup in my thinking.
- deleted 10y ago[deleted]
- currymj 10y agogrant actual shares of restricted stock (as opposed to options) and then pay dividends?
- williamscales 10y agoPreferred stockholders usually have terms on their preferred shares that entitle them to a cut of any dividend paid. I think that in those cases, most of the dividend would end up going to the investors which is probably not what's intended.