6 ms·

Article is long but well written and argued. I found this paragraph about a proposal in UK especially interesting: "The Labour Party’s plan is detailed. It ens

by gniv 7y ago

Article is long but well written and argued. I found this paragraph about a proposal in UK especially interesting: "The Labour Party’s plan is detailed. It ensures that investors are not injured by having their share value diluted because it institutes a transition process: every year, employees gain a 1 percent ownership stake, up to a cap of 10 percent. Once funds are in a trust, then the shares are not available to be resold. This is crucial: the stakes are not a private, freely transferable wealth asset, and since employees don’t purchase stakes, they can’t sell them when they leave employment. Rather, by becoming an employee of the corporation, you receive an ownership stake in the employee collective trust—a stake that remains in the trust if you move to a different job. So long as you are an employee, though, that stake grants you governance rights and the right to receive a share of the profits."

chrisseaton 7y ago
> In September 2018 the UK Labour Party proposed a policy for “Inclusive Ownership Funds,” which would require corporations with over 250 employees to ensure that employees receive dividends. But most professional employees get an 'ownership stake' (shares) in the company as part of their compensation anyway.
- MarcScott 7y ago
  Really? Most - greatest in amount or degree i.e. greater than 50% Professional - engaged in a specified activity as one's main paid occupation rather than as an amateur. Were you being facetious, or do you honestly believe that most people in the world receive shares as compensation in their full time jobs? Neither I, nor anyone I know, has ever received shares as part of an employment contract.
  - chrisseaton 7y ago
    That's not what 'professional' means in this context, and I'm sure you know that. https://en.wiktionary.org/wiki/professional_class https://en.wiktionary.org/wiki/professional_class Most public-sector jobs for university educated people include shares of some form or another for employees. Some times it's a very large proportion of the compensation, or even essentially all of it, for some management.
    - MarcScott 7y ago
      But the Labour party aren't using this definition. They are talking about all employees, regardless of education, training or position. Forgive me if I am misreading your post, but it appear you're saying that a minority elites that are employed by a company already receive shares, so this is already happening. Under this plan, all employees receive a stake in the company, which is more in line with what the original article was suggesting.
      - chrisseaton 7y ago
        > But the Labour party aren't using this definition. ...err well they aren't using the word at all so it's a bit odd to say it's not the definition they're using. > Forgive me if I am misreading your post My point was that it wasn't some new radical idea - many people (not really elites - random programmers at tech companies, or marketers at agencies, or whatever aren't 'elites' by any stretch) are already getting this and it works fine without government intervention. I would guess that at least 10% of Google, for example, is already owned by the employees? I may be wrong.
    - vonmoltke 7y ago
      Most? I have been working for almost 17 years and have only had shares of any kind as part of my compensation for the past 15 months. I have yet to actually get any of those shares as I switched companies in the middle of that period, so I have literally never, to date, received shares as compensation in my career. My wife has never received, and likely will never receive, shares as part of her compensation considering all of her experience is with non-profits. Also, I suspect you meant "private-sector" here, not "public-sector" (i.e., government work).
  - ScottBurson 7y ago
    Restricted Stock Units (RSUs) are a standard component of compensation, at least for higher-performing employees, at many large tech companies. An RSU grant is a direct grant of shares, conditional only on the employee remaining at the company through the vesting date. I've received them, and know others who have.
    - pizzazzaro 7y ago
      Can you vote with these RSUs? Or does the bank holding them get that right? Because last I checked with mine, they really belong to the bank, and are used to fill in my balance sheet. No voting allowed.
- vkou 7y ago
  The shares I and my peers receive for employment add up to ~0.3% of my employer's outstanding shares/year. In 30 years, that might pool into ~10%. However, there is no mechanism for me, and my fellow coworkers to turn those shares into any kind of power over the board. Me personally controlling a tiny fraction of a percent of voting shares does not make my interests align, in any meaningful way with the board. It also means that I have no ability to influence the board to consider my interests. I need to act collectively, with like-interested co-workers, to have any influence. However, there is way too much friction for me, and like-minded coworkers to meaningfully undertake any collective actions. In fact, this is understood so well by my employer, that I, and my peers receive non-voting shares as my compensation. I'd never be able to put the voting power to use, anyways, and neither will anyone else who has to gasp - work for a living.
- pizzazzaro 7y ago
  As an employee with just such a package? Fidelity gets to vote with my shares. Have you experienced otherwise?
ijpoijpoihpiuoh 7y ago
I wonder how that would work. Suppose the UK generates a unicorn with a billion pounds of profit per year. Suppose that unicorn employs 10k employees. Presumably, everyone gets an equal stake in the employee share. So each employee is entitled to 1B pounds * 1/10 * 1/10000 = 10k pounds of profit. For folks earning the minimum wage at the company, that would be huge, since that profit sharing effectively increases the wage floor. For everyone else, I imagine the company would just pay reduced wages on the order of the amount of profit sharing, since it would not need to pay more to attract the requisite talent. Of course, that's only if the company offers a dividend. I wonder how buybacks are modeled in this case? Since the employee share isn't marketable, the employee doesn't derive any immediate benefit from a buy-back. I guess you'd have to increase the employee share beyond the 10% limit at that point. In theory, the company could over time buy back all the non-employee shares, then it would be employee-owned in its entirety. And if the company offers more shares? Do the employees get diluted? I guess not. That seems weird too.
- ScottBurson 7y ago
  > the company would just pay reduced wages on the order of the amount of profit sharing, since it would not need to pay more to attract the requisite talent Not necessarily true. Much of that talent might have joined precisely on the hope of receiving above-market compensation if the business did well.
hogFeast 7y ago
It it amazing that people take the UK Labour Party seriously. Their policy ideas are very unusual, they often make no economic sense (even internally), they consult no-one outside trade unions and their hard left sect grouping within the Party (Momentum), they use no research or any evidence to make policy proposals...it is extraordinary. With this idea O'Donnell literally announced it, and then tried to fill in the details later (iirc, this came out months ago, and it was a total mess, it made no sense...and they have been trying to polish it ever since). For a modern political party (they aren't modern, most of their ideas are from the 70s), this is unusual. The sum total of their policies involve either taking stuff from other people or redistributing power to their party. One other gem of theirs was moving the BoE back under govt control, printing £100bn, and then appointing their allies to spend it...I am yet to come across anyone who takes their ideas seriously (it isn't only this, the guy responsible for this policy has also said he is going to "lynch" people...srs). Increasing the level of knowledge amongst voters is really critical. Economists and, in fact, most of the people in the Parliamentary Labour Party do not take these policies seriously. They aren't serious. Voters in the UK really deserve better.

by gniv 7y ago

chrisseaton 7y ago

> In September 2018 the UK Labour Party proposed a policy for “Inclusive Ownership Funds,” which would require corporations with over 250 employees to ensure that employees receive dividends. But most professional employees get an 'ownership stake' (shares) in the company as part of their compensation anyway.

MarcScott 7y ago
Really? Most - greatest in amount or degree i.e. greater than 50% Professional - engaged in a specified activity as one's main paid occupation rather than as an amateur. Were you being facetious, or do you honestly believe that most people in the world receive shares as compensation in their full time jobs? Neither I, nor anyone I know, has ever received shares as part of an employment contract.
- chrisseaton 7y ago
  That's not what 'professional' means in this context, and I'm sure you know that. https://en.wiktionary.org/wiki/professional_class https://en.wiktionary.org/wiki/professional_class Most public-sector jobs for university educated people include shares of some form or another for employees. Some times it's a very large proportion of the compensation, or even essentially all of it, for some management.
  - MarcScott 7y ago
    But the Labour party aren't using this definition. They are talking about all employees, regardless of education, training or position. Forgive me if I am misreading your post, but it appear you're saying that a minority elites that are employed by a company already receive shares, so this is already happening. Under this plan, all employees receive a stake in the company, which is more in line with what the original article was suggesting.
    - chrisseaton 7y ago
      > But the Labour party aren't using this definition. ...err well they aren't using the word at all so it's a bit odd to say it's not the definition they're using. > Forgive me if I am misreading your post My point was that it wasn't some new radical idea - many people (not really elites - random programmers at tech companies, or marketers at agencies, or whatever aren't 'elites' by any stretch) are already getting this and it works fine without government intervention. I would guess that at least 10% of Google, for example, is already owned by the employees? I may be wrong.
  - vonmoltke 7y ago
    Most? I have been working for almost 17 years and have only had shares of any kind as part of my compensation for the past 15 months. I have yet to actually get any of those shares as I switched companies in the middle of that period, so I have literally never, to date, received shares as compensation in my career. My wife has never received, and likely will never receive, shares as part of her compensation considering all of her experience is with non-profits. Also, I suspect you meant "private-sector" here, not "public-sector" (i.e., government work).
- ScottBurson 7y ago
  Restricted Stock Units (RSUs) are a standard component of compensation, at least for higher-performing employees, at many large tech companies. An RSU grant is a direct grant of shares, conditional only on the employee remaining at the company through the vesting date. I've received them, and know others who have.
  - pizzazzaro 7y ago
    Can you vote with these RSUs? Or does the bank holding them get that right? Because last I checked with mine, they really belong to the bank, and are used to fill in my balance sheet. No voting allowed.
vkou 7y ago
The shares I and my peers receive for employment add up to ~0.3% of my employer's outstanding shares/year. In 30 years, that might pool into ~10%. However, there is no mechanism for me, and my fellow coworkers to turn those shares into any kind of power over the board. Me personally controlling a tiny fraction of a percent of voting shares does not make my interests align, in any meaningful way with the board. It also means that I have no ability to influence the board to consider my interests. I need to act collectively, with like-interested co-workers, to have any influence. However, there is way too much friction for me, and like-minded coworkers to meaningfully undertake any collective actions. In fact, this is understood so well by my employer, that I, and my peers receive non-voting shares as my compensation. I'd never be able to put the voting power to use, anyways, and neither will anyone else who has to gasp - work for a living.
pizzazzaro 7y ago
As an employee with just such a package? Fidelity gets to vote with my shares. Have you experienced otherwise?

ijpoijpoihpiuoh 7y ago

I wonder how that would work. Suppose the UK generates a unicorn with a billion pounds of profit per year. Suppose that unicorn employs 10k employees. Presumably, everyone gets an equal stake in the employee share. So each employee is entitled to 1B pounds * 1/10 * 1/10000 = 10k pounds of profit. For folks earning the minimum wage at the company, that would be huge, since that profit sharing effectively increases the wage floor. For everyone else, I imagine the company would just pay reduced wages on the order of the amount of profit sharing, since it would not need to pay more to attract the requisite talent. Of course, that's only if the company offers a dividend. I wonder how buybacks are modeled in this case? Since the employee share isn't marketable, the employee doesn't derive any immediate benefit from a buy-back. I guess you'd have to increase the employee share beyond the 10% limit at that point. In theory, the company could over time buy back all the non-employee shares, then it would be employee-owned in its entirety. And if the company offers more shares? Do the employees get diluted? I guess not. That seems weird too.

ScottBurson 7y ago
> the company would just pay reduced wages on the order of the amount of profit sharing, since it would not need to pay more to attract the requisite talent Not necessarily true. Much of that talent might have joined precisely on the hope of receiving above-market compensation if the business did well.

hogFeast 7y ago

It it amazing that people take the UK Labour Party seriously. Their policy ideas are very unusual, they often make no economic sense (even internally), they consult no-one outside trade unions and their hard left sect grouping within the Party (Momentum), they use no research or any evidence to make policy proposals...it is extraordinary. With this idea O'Donnell literally announced it, and then tried to fill in the details later (iirc, this came out months ago, and it was a total mess, it made no sense...and they have been trying to polish it ever since). For a modern political party (they aren't modern, most of their ideas are from the 70s), this is unusual. The sum total of their policies involve either taking stuff from other people or redistributing power to their party. One other gem of theirs was moving the BoE back under govt control, printing £100bn, and then appointing their allies to spend it...I am yet to come across anyone who takes their ideas seriously (it isn't only this, the guy responsible for this policy has also said he is going to "lynch" people...srs). Increasing the level of knowledge amongst voters is really critical. Economists and, in fact, most of the people in the Parliamentary Labour Party do not take these policies seriously. They aren't serious. Voters in the UK really deserve better.