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As an employee I might have $100k in MSFT stock after five years. Those buybacks gave me what, a few hundred/thousand bucks at most? Come on. For such a suppose

As an employee I might have $100k in MSFT stock after five years. Those buybacks gave me what, a few hundred/thousand bucks at most? Come on. For such a supposed math-literate profession this objection is weirdly common. If you get cash you can turn around and buy company stock. Nobody is stopping you. Unions would also certainly see the value in employee ownership of stock, which broadly aligns with ideas of workers capturing more of the value they produce. A union enables workers, in aggregate, to capture more of the value they produce - value which would otherwise flow to the pockets of shareholders, the overwhelming majority of whom contributed nothing to its creation. Talk about employee salary distribution is orthogonal to this debate.

vlovich123 6y ago
People also seem to think that RSU grants somehow appreciate in value before they vest. They do not. If you sign for 400k of RSUs over 4 years with a 1 year cliff and the stock rockets up 2x just before your first vest and then plateaus, you’re still getting only 400k. There’s literally no difference to a regular salary except you get paid out twice and it makes taxes more annoying because you have to pay estimated taxes quarterly instead of doing it once like normal people. Netflix has also proven this obsession with RSUs is unnecessary. You can have strong growth without it and in large public companies, the theory that this somehow incentivizes employees in any meaningful way has a severe lack of any evidence.
- jmgao 6y ago
  That's entirely dependent on the company. Google grants RSUs based on a dollar value when the grant is approved.
- renewiltord 6y ago
  > People also seem to think that RSU grants somehow appreciate in value before they vest. They do not. If you sign for 400k of RSUs over 4 years with a 1 year cliff and the stock rockets up 2x just before your first vest and then plateaus, you’re still getting only 400k. This happens at some places and happens based on number of RSUs at other places.
- thatfunkymunki 6y ago
  FB grants RSUs based on an initial value at hire time translated into a total number of stock units that then vests over 4 years. So if the stock doubles, your comp doubles.
chii 6y ago
> contributed nothing to its creation. no, they contributed capital. This capital came from somewhere - e.g., they took a risk and borrowed it. Or they took their own saved capital from their own past working life (or inherited, which is just the past working life of their parents). When speaking of labour and value creation, the concept of capital is often seen as "nothing", and is certainly wrong. Without capital, labour is useless. Without labour, capital is useless.
- ahelwer 6y ago
  If you buy a share of a publicly-traded company you are not "investing" in the company, "contributing capital", whatever. The company does not use your money to build out its infrastructure; generally they don't see a dime of it. There are a few exceptions like with Tesla who issue new shares to cash in on their inflated stock price, but this is generally rare. Most companies are doing the opposite: buying more of their stock, not selling it.
  - chii 6y ago
    > If you buy a share of a publicly-traded company you are not "investing" in the company no you are - because it's a chain of capital investment that is linked all the way to IPO (or private investment pre-IPO). You purchase a share publicly from _someone_ who has purchased it from someone else. This chain of purchases leads all the way back to the initial share offering. Just because your dollar doesn't go directly to the company doesn't mean this form of funding structure isn't "contributing capital". Your public share purchase allows an existing share holder to exit - without which they would not have purchased the initial share in the first place.
    - pksebben 6y ago
      that all sounds like an incredibly roundabout way of inflating ownership structures rather than contributing meaningfully to value. how much fidelity can be assumed by this, over time? Unless you assume that value traded in a market is perfectly efficient (which it's not) the value signal is going to degrade over time. so, how long can you trust that the "chain of investment" faithfully represents value added? a year? ten years? how about investments in companies that have been around for 50, 75, 100 years? Why is it that we take as a given that ownership of value necessarily connotes the owner is themselves valuable?

vlovich123 6y ago

People also seem to think that RSU grants somehow appreciate in value before they vest. They do not. If you sign for 400k of RSUs over 4 years with a 1 year cliff and the stock rockets up 2x just before your first vest and then plateaus, you’re still getting only 400k. There’s literally no difference to a regular salary except you get paid out twice and it makes taxes more annoying because you have to pay estimated taxes quarterly instead of doing it once like normal people. Netflix has also proven this obsession with RSUs is unnecessary. You can have strong growth without it and in large public companies, the theory that this somehow incentivizes employees in any meaningful way has a severe lack of any evidence.

jmgao 6y ago
That's entirely dependent on the company. Google grants RSUs based on a dollar value when the grant is approved.
renewiltord 6y ago
> People also seem to think that RSU grants somehow appreciate in value before they vest. They do not. If you sign for 400k of RSUs over 4 years with a 1 year cliff and the stock rockets up 2x just before your first vest and then plateaus, you’re still getting only 400k. This happens at some places and happens based on number of RSUs at other places.
thatfunkymunki 6y ago
FB grants RSUs based on an initial value at hire time translated into a total number of stock units that then vests over 4 years. So if the stock doubles, your comp doubles.

chii 6y ago

> contributed nothing to its creation. no, they contributed capital. This capital came from somewhere - e.g., they took a risk and borrowed it. Or they took their own saved capital from their own past working life (or inherited, which is just the past working life of their parents). When speaking of labour and value creation, the concept of capital is often seen as "nothing", and is certainly wrong. Without capital, labour is useless. Without labour, capital is useless.

ahelwer 6y ago
If you buy a share of a publicly-traded company you are not "investing" in the company, "contributing capital", whatever. The company does not use your money to build out its infrastructure; generally they don't see a dime of it. There are a few exceptions like with Tesla who issue new shares to cash in on their inflated stock price, but this is generally rare. Most companies are doing the opposite: buying more of their stock, not selling it.
- chii 6y ago
  > If you buy a share of a publicly-traded company you are not "investing" in the company no you are - because it's a chain of capital investment that is linked all the way to IPO (or private investment pre-IPO). You purchase a share publicly from _someone_ who has purchased it from someone else. This chain of purchases leads all the way back to the initial share offering. Just because your dollar doesn't go directly to the company doesn't mean this form of funding structure isn't "contributing capital". Your public share purchase allows an existing share holder to exit - without which they would not have purchased the initial share in the first place.
  - pksebben 6y ago
    that all sounds like an incredibly roundabout way of inflating ownership structures rather than contributing meaningfully to value. how much fidelity can be assumed by this, over time? Unless you assume that value traded in a market is perfectly efficient (which it's not) the value signal is going to degrade over time. so, how long can you trust that the "chain of investment" faithfully represents value added? a year? ten years? how about investments in companies that have been around for 50, 75, 100 years? Why is it that we take as a given that ownership of value necessarily connotes the owner is themselves valuable?