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Employee compensation would hilariously soar so much if this were the model. Currently employees in reality, are provided 0.00001% of the company.

the_lonely_road 5y ago
Salary is often the single largest expense on the income statement, and especially so for service based companies. This expense will frequently massively outstrip the profit line item. So no employees are not getting 0.000001% of these companies, they are in fact getting the majority of the money flowing through these companies. You are noting that the employee line item is split up amongst 50,000 employees and the smaller profit number is behind split up among 50 owners. So an individual owner makes massively more money than an individual employee but missing that employees as a class are still getting more of the money than the owners.
PragmaticPulp 5y ago
> Currently employees in reality, are provided 0.00001% of the company. 0.00001% of Amazon's entire revenue (not profit, but revenue) last year would be about $14,000. Fortunately, every one of their full time employees is paid more than that. Entry level engineers make 10X that amount and the best engineers make 50X that or more. At some of the most highly paid companies like Uber, paying employees according to the value they create would actually make salaries go down in every scenario, because the company is still fueled by investor funds and can't self-sustain on revenue alone. After round-tripping from IC to manager and back a couple times, I've come to realize that the value given to engineers especially is extremely high. Many initiatives in the tech industry don't ever turn a profit for the company or investors, yet we get paid six figures all the same. If anything, I would expect such a hypothetical initiative to redistribute more of the wealth away from engineers like us and toward people like the customer support team who are fixing all of the problems created by products that don't work quite right. The person on the phone with grandma walking them through a support issue arguably contributes more to the LTV of that customer than anyone else. Stepping outside of tech, I think people imagine profits to be much higher than they are in reality. Grocery stores are a common example of a business that has very narrow profit margins (some times a couple percent) that don't actually have large amounts of leftover profit to distribute to employees. Regardless, it's all hypothetical. The employment market is supply and demand, and that's why engineers are paid so highly. End of story.

the_lonely_road 5y ago

Salary is often the single largest expense on the income statement, and especially so for service based companies. This expense will frequently massively outstrip the profit line item. So no employees are not getting 0.000001% of these companies, they are in fact getting the majority of the money flowing through these companies. You are noting that the employee line item is split up amongst 50,000 employees and the smaller profit number is behind split up among 50 owners. So an individual owner makes massively more money than an individual employee but missing that employees as a class are still getting more of the money than the owners.

PragmaticPulp 5y ago

> Currently employees in reality, are provided 0.00001% of the company. 0.00001% of Amazon's entire revenue (not profit, but revenue) last year would be about $14,000. Fortunately, every one of their full time employees is paid more than that. Entry level engineers make 10X that amount and the best engineers make 50X that or more. At some of the most highly paid companies like Uber, paying employees according to the value they create would actually make salaries go down in every scenario, because the company is still fueled by investor funds and can't self-sustain on revenue alone. After round-tripping from IC to manager and back a couple times, I've come to realize that the value given to engineers especially is extremely high. Many initiatives in the tech industry don't ever turn a profit for the company or investors, yet we get paid six figures all the same. If anything, I would expect such a hypothetical initiative to redistribute more of the wealth away from engineers like us and toward people like the customer support team who are fixing all of the problems created by products that don't work quite right. The person on the phone with grandma walking them through a support issue arguably contributes more to the LTV of that customer than anyone else. Stepping outside of tech, I think people imagine profits to be much higher than they are in reality. Grocery stores are a common example of a business that has very narrow profit margins (some times a couple percent) that don't actually have large amounts of leftover profit to distribute to employees. Regardless, it's all hypothetical. The employment market is supply and demand, and that's why engineers are paid so highly. End of story.