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Their employees get a share of the profits (like many regular businesses). They are also quite firm in their goal to stay private, so why would equity be releva

Their employees get a share of the profits (like many regular businesses). They are also quite firm in their goal to stay private, so why would equity be relevant to an employee any way?

paxys 8y ago
What share of profits though? The most recent article I can find (https://mailchimp.com/culture/investing-in-people-through-profit-sharing/ https://mailchimp.com/culture/investing-in-people-through-pr...) boasts of contributing "up to 19%" of annual salary to employees' 401k. While obviously not a bad deal, it's a far cry from options/RSUs and other standard annual bonuses offered at other tech companies.
- manigandham 8y ago
  The other tech companies are vastly outside the norm and have severely affected the entire industry with inflation. And if people cared and wanted to work at those other companies, then they would. Don't assume to know what's best for everyone else.
- tomschlick 8y ago
  > What share of profits though? The share that goes into your yearly salary, bonuses, raises, and benefits (like the 401k match you disregard). They owe you nothing else, and each employee is free to ask for more or leave for greener pastures if they are unhappy.
  - C1sc0cat 8y ago
    Shares are often a much more tax efficient way of rewarding employees and having an actual share has numerous advantage's in term of morale retention and so on. Also shares keep on producing income after you have left a company.
    - ajcodez 8y ago
      “Also shares keep on producing income after you have left a company.” If I was making $120k per year working at MailChimp the last thing I would want is 30% or more of my net worth tied up in private shares. What employee wants that much exposure? It’s a private tech company with no plans for liquidity potentially ever.
      - C1sc0cat 8y ago
        Private company shares can pay dividends though.
        ajcodez 8y ago
        It is severely limiting. You can’t sell private shares on the open market to buy a condo, pay off college debt, invest in your own company, quit and travel the world, etc. It could be decades before you receive the full share value. If hypothetical employee is working full time it’s probably because they don’t have enough assets 2M+ to live off passive income and need to work. Let’s say they are frugal and save $40k per year. If you have comp like a public co and receive $40k+ per year in shares does it really make sense to have 50%+ of your net worth in a single private tech company? It would probably work out great but 10 years is a long time to wait. I’m pretty sure there is issues with tax too but I don’t know the math.
    - manigandham 8y ago
      Shares are worthless unless you can convert them to something. If the company is not public or doesn't have a secondary market, you're just getting paper money that you can never spend. Morale will definitely tank once people figure that out.
- to_bpr 8y ago
  >While obviously not a bad deal, it's a far cry from options/RSUs and other standard annual bonuses offered at other tech companies. Nobody is forcing people to work there.

Their employees get a share of the profits (like many regular businesses). They are also quite firm in their goal to stay private, so why would equity be relevant to an employee any way?

paxys 8y ago

What share of profits though? The most recent article I can find (https://mailchimp.com/culture/investing-in-people-through-profit-sharing/ https://mailchimp.com/culture/investing-in-people-through-pr...) boasts of contributing "up to 19%" of annual salary to employees' 401k. While obviously not a bad deal, it's a far cry from options/RSUs and other standard annual bonuses offered at other tech companies.

manigandham 8y ago
The other tech companies are vastly outside the norm and have severely affected the entire industry with inflation. And if people cared and wanted to work at those other companies, then they would. Don't assume to know what's best for everyone else.
tomschlick 8y ago
> What share of profits though? The share that goes into your yearly salary, bonuses, raises, and benefits (like the 401k match you disregard). They owe you nothing else, and each employee is free to ask for more or leave for greener pastures if they are unhappy.
- C1sc0cat 8y ago
  Shares are often a much more tax efficient way of rewarding employees and having an actual share has numerous advantage's in term of morale retention and so on. Also shares keep on producing income after you have left a company.
  - ajcodez 8y ago
    “Also shares keep on producing income after you have left a company.” If I was making $120k per year working at MailChimp the last thing I would want is 30% or more of my net worth tied up in private shares. What employee wants that much exposure? It’s a private tech company with no plans for liquidity potentially ever.
    - C1sc0cat 8y ago
      Private company shares can pay dividends though.
      - ajcodez 8y ago
        It is severely limiting. You can’t sell private shares on the open market to buy a condo, pay off college debt, invest in your own company, quit and travel the world, etc. It could be decades before you receive the full share value. If hypothetical employee is working full time it’s probably because they don’t have enough assets 2M+ to live off passive income and need to work. Let’s say they are frugal and save $40k per year. If you have comp like a public co and receive $40k+ per year in shares does it really make sense to have 50%+ of your net worth in a single private tech company? It would probably work out great but 10 years is a long time to wait. I’m pretty sure there is issues with tax too but I don’t know the math.
  - manigandham 8y ago
    Shares are worthless unless you can convert them to something. If the company is not public or doesn't have a secondary market, you're just getting paper money that you can never spend. Morale will definitely tank once people figure that out.
to_bpr 8y ago
>While obviously not a bad deal, it's a far cry from options/RSUs and other standard annual bonuses offered at other tech companies. Nobody is forcing people to work there.