6 ms·

> the company will pocket the remaining $460k First, in most companies it's very hard to say who exactly managed to increase the profit. Is it you who came up

> the company will pocket the remaining $460k First, in most companies it's very hard to say who exactly managed to increase the profit. Is it you who came up with the idea? Is it your boss who picked this specific idea out of fifty other ideas you came up with last week? Is it the QA team who managed to catch the bug which would've erased all the profits? Is it HR who hired you among other candidates? Second, no, the remaining is not $460k. In a Big Greedy Corporation I work an average annual cost of employee in "primary" location is around $200k (pre-covid). It includes office space, technology, infrastructure, salary, taxes, fees, insurances and so on. Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company.

deeeeplearning 6y ago
> Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company. Oh please what do you work for Prager U? What Risk, if the company goes belly up they'll get a bailout from the Gov and all the Execs will keep their bloated comp packages. There is no risk for business owners. That is an illusion peddled by Ayn Randian morons.
- sojournerc 6y ago
  Take this kind of comment elsewhere.
  - deeeeplearning 6y ago
    Stop pandering to bootlicking psychopaths.
  - ves 6y ago
    Why? The tone is offensive, but large and connected companies have received substantial bailouts, and nearly every executive has a cushy golden parachute.
    - sojournerc 6y ago
      Why? Because of the guidelines of this community: "Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
    - entropea 6y ago
      Yeah there's absolutely zero risk when government bails you out every time you fail and CEO's and Board members have multi million dollar golden parachutes. Plenty of risk for the employee though!
fxtentacle 6y ago
OK so the company pockets the remaining $300k, while the intern still gets only $40k. Does that make it categorically better? I don't think so. Also, the company probably only has to pay those $40k to $200k in salary costs for a few years, but the benefits derived from the work might outlive it. There's nothing stopping anyone from firing an employee just because they previously made a massive contribution to the company's financial success. Why keep the cow if you can get the milk for free? So it might even be the full $500k in pure profits after the 2nd year.
- read_if_gay_ 6y ago
  You’re pulling numbers out of thin air and basing your conclusions on them.
  - entropea 6y ago
    Everyone in this thread is.
    - read_if_gay_ 6y ago
      Definitely not. Even GP isn't.
- ticmasta 6y ago
  The only way you can accurately evaluate and attribute the work of this hypothetical intern is to answer the question "what would happen if they took their idea and implemented it independently?" * Does it require a big capital investment? the company provides that. * Is it risky? The company gets a risk premium. * Does it need a bunch of specialized resources? the company needs to provide those. * More subtly, is it net-new or incremental value? Providing a company with something that boosts what they already do isn't evaluated on the incremental increase because you can't realize them without the previous baseline. There are countless factors measuring value-add, making it extremely hard to allocate back to a single cog in the machine - unless you're a startup with very few cogs, hence they're responsible for all value (or costs). If you want to be evaluated based solely on your individual contribution, put yourself into a situation where this is possible, i.e. do it all yourself. Otherwise join the broader team and take the benefits and costs that comes with that.
fogihujy 6y ago
How common are moves like that, really? Sure, it must happen since people keep bringing it up, but how many businesses actually avoid rewarding individual contributions that have had a measurable, positive impact?
- fxtentacle 6y ago
  In medium sized companies, I would say it is quite common. They are too large to give new employees significant stock options, yet too small to pay FAANG-competititve rates. So you're starting with less salary and no stock. If you now have an egomaniac boss who thinks his own personal brilliance is always the cause for the company's got fate, then there's a good chance he will just take credit for your invention and your bonus is gone. And in slightly larger companies, chances are someone in the management chain will take credit for it and get the bonus. There's a reason why in most companies, you can never talk directly to the upper management: Middle management has strong financial incentives to prevent that.
vsareto 6y ago
>First, in most companies it's very hard to say who exactly managed to increase the profit. It isn't that we need to decide exactly who contributed proportionally and how much of the profits we get. We're really just reaching for something that increases wages faster than raises. And really it highlights the issue that not only is it hard to get fair profit-sharing, it's also hard to get market-competitive raises. But of course a company is going to say it's hard to decide who gets how much, because they have an incentive to pay their employees as little as possible, regardless if it's through base wages, raises, or profit sharing. There always seems to be an excuse.
- ticmasta 6y ago
  >> something that increases wages faster than raises. not sure if you misspoke or I don't get your point >> fair profit-sharing "Fair" is just a trigger that one side uses to put the other on the defensive. Companies by their very nature a designed to share profits with their owners, i.e. legal shareholders. If you want profit sharing guaranteed join an employee-owned cooperative or alternative structured org.
  - vsareto 6y ago
    >not sure if you misspoke or I don't get your point If I can't get raises that keep up with inflation or competitive market rates, I'm going to try and argue that I should seek other options for making more money. One of those options would be profit-sharing. Another option is job hopping, which tech enjoys as a luxury.
steve76 6y ago
What happens when a company fails: In China, you mess up, you get the death penalty. In America, it's worse. You fight really dirty to get to the top. It fails no matter what you do, and you end up becoming a monster. Everyone around you dies, you see your grandkids OD, and you look back thinking if the entire thing was just one big sting by the police. Better to live poor. Much more fun. And guys, $500,000? What is this? 1820? In the 1990s, I was told by VC, "don't call me again unless you are over a billion. That's our minimum." And that was after a South African railroad municipal bond issue. ------------------------------------------------- The article assumes one rate for inflation. Sure, the cost of "just surviving" goes down. Everyone then dies in debt. No one has children unless it's a mistake or agrarian immigration. Everyone spends two dollars just to earn one. The cost for not being told what to do all your life, or calling out others' mistakes, or having a say in what gets done and how goes to infinity. No capability as everyone just tears each other apart. 20% of America are retirees. 54% of children are from broken homes. The path to walk creates the quality of leadership. Past generations have a cynical point. It's easy to get hired. Just get in shape, put on a suit, be able to fog a mirror skills wise, and, oh yeah, turn your back on everyone who got you there. If the company wants you to be in Ramadi tomorrow, be in Ramadi tomorrow. The old way goes away for a reason. Materialism and celebrity only limits the violence. Fools show themselves to the world, like a chained baying sheep. My job interview is to spit what I devoured at the windshield, look inside and get angry at the blinding light. Let out some horrible roar like a hurricane, and start tearing everything up. Nothing is more intimidating than the lair of some sleeping monster and its absence. I'm happy to shun the world.
RobRivera 6y ago
I couldn't have said it better. Critics of the status quo often cite strawperson numbers to villianize omnicorp, but it isn't that cut and dry. Every decision regarding capital is risky. Risk management and proper reward isn't easily quantifiable sometimes.
- tehjoker 6y ago
  Isn't the social production of value the exact reason why the managerial class should not be disproportionately rewarded or in dictatorial control?
rrrrrrrrrrrryan 6y ago
> You want to own part of that risk? Build your own company. I was with you until your last line. You don't have to build your own company - you can simply go after a job at a company that understands how beneficial it is to align the incentives of its owners and employees. There plenty of ways to give workers a piece of the pie: there are full-on co-ops (at one end of the spectrum), and there are more watered-down implementations like stock options, ESPP plans, etc., all of which allow the worker to take on some of the risk and share some of the gains. Plenty of companies also distribute simple profit-sharing bonuses, which (arguably) don't require the employee to take on any risk at all.
- stainforth 6y ago
  You cannot simply go to a job at another company.
  - WalterBright 6y ago
    People do it all the time.

deeeeplearning 6y ago

> Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company. Oh please what do you work for Prager U? What Risk, if the company goes belly up they'll get a bailout from the Gov and all the Execs will keep their bloated comp packages. There is no risk for business owners. That is an illusion peddled by Ayn Randian morons.

sojournerc 6y ago
Take this kind of comment elsewhere.
- deeeeplearning 6y ago
  Stop pandering to bootlicking psychopaths.
- ves 6y ago
  Why? The tone is offensive, but large and connected companies have received substantial bailouts, and nearly every executive has a cushy golden parachute.
  - sojournerc 6y ago
    Why? Because of the guidelines of this community: "Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
  - entropea 6y ago
    Yeah there's absolutely zero risk when government bails you out every time you fail and CEO's and Board members have multi million dollar golden parachutes. Plenty of risk for the employee though!

fxtentacle 6y ago

OK so the company pockets the remaining $300k, while the intern still gets only $40k. Does that make it categorically better? I don't think so. Also, the company probably only has to pay those $40k to $200k in salary costs for a few years, but the benefits derived from the work might outlive it. There's nothing stopping anyone from firing an employee just because they previously made a massive contribution to the company's financial success. Why keep the cow if you can get the milk for free? So it might even be the full $500k in pure profits after the 2nd year.

read_if_gay_ 6y ago
You’re pulling numbers out of thin air and basing your conclusions on them.
- entropea 6y ago
  Everyone in this thread is.
  - read_if_gay_ 6y ago
    Definitely not. Even GP isn't.
ticmasta 6y ago
The only way you can accurately evaluate and attribute the work of this hypothetical intern is to answer the question "what would happen if they took their idea and implemented it independently?" * Does it require a big capital investment? the company provides that. * Is it risky? The company gets a risk premium. * Does it need a bunch of specialized resources? the company needs to provide those. * More subtly, is it net-new or incremental value? Providing a company with something that boosts what they already do isn't evaluated on the incremental increase because you can't realize them without the previous baseline. There are countless factors measuring value-add, making it extremely hard to allocate back to a single cog in the machine - unless you're a startup with very few cogs, hence they're responsible for all value (or costs). If you want to be evaluated based solely on your individual contribution, put yourself into a situation where this is possible, i.e. do it all yourself. Otherwise join the broader team and take the benefits and costs that comes with that.

fogihujy 6y ago

How common are moves like that, really? Sure, it must happen since people keep bringing it up, but how many businesses actually avoid rewarding individual contributions that have had a measurable, positive impact?

fxtentacle 6y ago
In medium sized companies, I would say it is quite common. They are too large to give new employees significant stock options, yet too small to pay FAANG-competititve rates. So you're starting with less salary and no stock. If you now have an egomaniac boss who thinks his own personal brilliance is always the cause for the company's got fate, then there's a good chance he will just take credit for your invention and your bonus is gone. And in slightly larger companies, chances are someone in the management chain will take credit for it and get the bonus. There's a reason why in most companies, you can never talk directly to the upper management: Middle management has strong financial incentives to prevent that.

vsareto 6y ago

>First, in most companies it's very hard to say who exactly managed to increase the profit. It isn't that we need to decide exactly who contributed proportionally and how much of the profits we get. We're really just reaching for something that increases wages faster than raises. And really it highlights the issue that not only is it hard to get fair profit-sharing, it's also hard to get market-competitive raises. But of course a company is going to say it's hard to decide who gets how much, because they have an incentive to pay their employees as little as possible, regardless if it's through base wages, raises, or profit sharing. There always seems to be an excuse.

ticmasta 6y ago
>> something that increases wages faster than raises. not sure if you misspoke or I don't get your point >> fair profit-sharing "Fair" is just a trigger that one side uses to put the other on the defensive. Companies by their very nature a designed to share profits with their owners, i.e. legal shareholders. If you want profit sharing guaranteed join an employee-owned cooperative or alternative structured org.
- vsareto 6y ago
  >not sure if you misspoke or I don't get your point If I can't get raises that keep up with inflation or competitive market rates, I'm going to try and argue that I should seek other options for making more money. One of those options would be profit-sharing. Another option is job hopping, which tech enjoys as a luxury.

steve76 6y ago

What happens when a company fails: In China, you mess up, you get the death penalty. In America, it's worse. You fight really dirty to get to the top. It fails no matter what you do, and you end up becoming a monster. Everyone around you dies, you see your grandkids OD, and you look back thinking if the entire thing was just one big sting by the police. Better to live poor. Much more fun. And guys, $500,000? What is this? 1820? In the 1990s, I was told by VC, "don't call me again unless you are over a billion. That's our minimum." And that was after a South African railroad municipal bond issue. ------------------------------------------------- The article assumes one rate for inflation. Sure, the cost of "just surviving" goes down. Everyone then dies in debt. No one has children unless it's a mistake or agrarian immigration. Everyone spends two dollars just to earn one. The cost for not being told what to do all your life, or calling out others' mistakes, or having a say in what gets done and how goes to infinity. No capability as everyone just tears each other apart. 20% of America are retirees. 54% of children are from broken homes. The path to walk creates the quality of leadership. Past generations have a cynical point. It's easy to get hired. Just get in shape, put on a suit, be able to fog a mirror skills wise, and, oh yeah, turn your back on everyone who got you there. If the company wants you to be in Ramadi tomorrow, be in Ramadi tomorrow. The old way goes away for a reason. Materialism and celebrity only limits the violence. Fools show themselves to the world, like a chained baying sheep. My job interview is to spit what I devoured at the windshield, look inside and get angry at the blinding light. Let out some horrible roar like a hurricane, and start tearing everything up. Nothing is more intimidating than the lair of some sleeping monster and its absence. I'm happy to shun the world.

RobRivera 6y ago

I couldn't have said it better. Critics of the status quo often cite strawperson numbers to villianize omnicorp, but it isn't that cut and dry. Every decision regarding capital is risky. Risk management and proper reward isn't easily quantifiable sometimes.

tehjoker 6y ago
Isn't the social production of value the exact reason why the managerial class should not be disproportionately rewarded or in dictatorial control?

rrrrrrrrrrrryan 6y ago

> You want to own part of that risk? Build your own company. I was with you until your last line. You don't have to build your own company - you can simply go after a job at a company that understands how beneficial it is to align the incentives of its owners and employees. There plenty of ways to give workers a piece of the pie: there are full-on co-ops (at one end of the spectrum), and there are more watered-down implementations like stock options, ESPP plans, etc., all of which allow the worker to take on some of the risk and share some of the gains. Plenty of companies also distribute simple profit-sharing bonuses, which (arguably) don't require the employee to take on any risk at all.

stainforth 6y ago
You cannot simply go to a job at another company.
- WalterBright 6y ago
  People do it all the time.