4 ms·

I'll be honest, having worked at companies with profit sharing, you're better off taking the raise unless you're working for commission, and even then now is a

I'll be honest, having worked at companies with profit sharing, you're better off taking the raise unless you're working for commission, and even then now is a rough time to be on commission. If you can afford to risk your income on your company's fortunes, start your own or join a startup with a founder who seems trustworthy. For me and most people, predictable income is much better than risky equity.

ryanbrunner 4y ago
Joining a startup isn't a good way to share in a companies upside unless you're one of the first few employees. You only share in the upside of wildly successful companies, and even then it's many years delayed from that success and has the potential to be whittled away by preferred rounds ahead of you, executive carve outs, etc.
sofixa 4y ago
Profit sharing doesn't necessarily mean equity. It can be a percentage of profits split between all employees. Of course that, like equity, doesn't substitute a decent salary, it just complements in a way that gives positive incentives.
- zdragnar 4y ago
  Whether equity or paid out monthly, it's variable income that most people can't count on. When you're in a big enough company that you individually can't feel yourself moving the needle, the end result is that it's not much of an incentive. This is especially true once the company gets over a few hundred employees. Source: Have worked for profit sharing companies before.
horsawlarway 4y ago
I don't really disagree with you, but I also don't think you're really responding to what the OP was saying. He isn't saying: We want a profit sharing agreement instead of salary. He's saying: Extra salary that is immediately covered by the company raising the cost of their goods (rather than say - reducing executive pay, removing middle managers, or making less money for shareholders) doesn't get us where we need to go. Because if the cost of buying all your goods is going up in direct relation to the raise in salary, (and this is happening across the market: inflation) - you aren't really getting a fucking raise at all. You're just floating. The answer instead (at least in my opinion) is to change tact on how companies prioritize. 1. Workers need to be valued above shareholders (drive long term growth rather than sacrificing the golden duck for next quarter's profit) 2. Discrepancy between CEO and average pay needs to be curtailed - the current balance is driving a huge wedge into the relationship between a company and its employees. 3. Remove the inappropriate leverage that companies wield by controlling your healthcare/medical insurance costs 4. Remove pools of labor that are self-defeating: Jobs that pay so little the employee must be subsidized by government programs to live (think walmart/uber/etc) The best course of action here is likely labor movements (unions)
- kelseyfrog 4y ago
  German readers, in your opinion, a Betriebsräte deal with many of these problems, no?
  - 7steps2much 4y ago
    Well, not necessarily. In terms of raises/salary increases that's more of an issue for the unions than the Betriebsrat, since it usually concerns a whole industry and not just a single company. As for the "valuing workers over shareholders" stuff ... Well, maybe? To be perfectly honest this isn't really what a Betriebsrat is about. I mean sure, they do have some influence, but in general their territory is more in terms of company operations, less in terms of how much is paid out to shareholders. To be perfectly honest the Betriebsräte are facing much of the same problems that most other elected bodies are facing in the western world (or at least Germany). Sinking voting share, less and less people caring about it and as they kind of loose some soft power. They still have the hard power guaranteed by law of course, but their soft power is essentially waning.
    - kelseyfrog 4y ago
      Thank you for the perspective. It helps to know more about the successes and failings of institutions before I go about suggesting their use. :)
- mox1 4y ago
  I really think decoupling health insurance from employment would go a loooong way to fixing some things and be such a long term beneficial thing. I'm not sure the best way to do, but I would love to see it happen.
- charlie0 4y ago
  I would also add that stock compensation needs to be vested over a longer period. This would help discourage short term thinking.
jerf 4y ago
A lot of people think that companies aren't paying their employees well because they're greedily hording cash and if they'd just give that cash to their employees, wealth problems would be solved. I would suggest to these people to spend some time looking at the largest companies in the world, taking their profits for the year, and dividing by the number of employees they have. I have done this exercise a few times. It will open your eyes about a lot of things w.r.t. business. We here on HN are the ones who need to do this most of all because we work in the industries and companies that have for the last 10 years actually made enough money that the division results in something significant. This is not the norm. You can easily end up with values in the hundreds of dollars of profit/employee for a more normal industry. Even if the profits were 100% shared, we aren't necessarily talking about pulling people out of poverty or something. The parasite class in society is smaller than you think, percentage-wise. Quite a lot of us go to supporting just one of them. I think getting rid of them would be a great boon... but not because simply redistributing their wealth would solve very much. The real problem they create is that they steal $X dollars and end up creating second-order effects that mean $X·Y dollars of wealth are never created in the first place, where Y is pretty significant.
- rightbyte 4y ago
  For Amazon 2021 it seems like quite alot though. 33,3 billion USD profits/1,622,000 employees = 20k USD/employee The median employee made 29k in 2020. https://www.businessinsider.com/amazon-employee-salary-pay-median-worker-compensation-compared-jeff-bezos-2021-4?r=US&IR=T https://www.businessinsider.com/amazon-employee-salary-pay-m...
  - queuebert 4y ago
    Maybe they have a lot of part-time employees.
- c22 4y ago
  I just tried this with 10 random companies from the tail end of the s&p 500, I didn't cherry pick anything: 2021 profit # employees profit/employee DISH Network Corporation $ 6.143B 16,000 383,937 FOX Corporation $12.909B 9,000 1,433,333 Wynn Resorts Limited $ 1.205B 30,200 39,735 American Airlines Group $ 2.046B 123,400 16,580 Bath & Body Works Inc $ 3.096B 92,300 33,542 Hasbro Inc $ 6.42B 5,600 1,146,428 Advance Auto Parts Inc $ 4.929B 68,000 72,485 MGM Resorts International $ 9.68B 74,500 129,932 Hormel Foods Corporation $ 1.928B 20,000 96,400 Paycom Software Inc $ 0.89B 5,385 165,273

ryanbrunner 4y ago

Joining a startup isn't a good way to share in a companies upside unless you're one of the first few employees. You only share in the upside of wildly successful companies, and even then it's many years delayed from that success and has the potential to be whittled away by preferred rounds ahead of you, executive carve outs, etc.

sofixa 4y ago

Profit sharing doesn't necessarily mean equity. It can be a percentage of profits split between all employees. Of course that, like equity, doesn't substitute a decent salary, it just complements in a way that gives positive incentives.

zdragnar 4y ago
Whether equity or paid out monthly, it's variable income that most people can't count on. When you're in a big enough company that you individually can't feel yourself moving the needle, the end result is that it's not much of an incentive. This is especially true once the company gets over a few hundred employees. Source: Have worked for profit sharing companies before.

horsawlarway 4y ago

I don't really disagree with you, but I also don't think you're really responding to what the OP was saying. He isn't saying: We want a profit sharing agreement instead of salary. He's saying: Extra salary that is immediately covered by the company raising the cost of their goods (rather than say - reducing executive pay, removing middle managers, or making less money for shareholders) doesn't get us where we need to go. Because if the cost of buying all your goods is going up in direct relation to the raise in salary, (and this is happening across the market: inflation) - you aren't really getting a fucking raise at all. You're just floating. The answer instead (at least in my opinion) is to change tact on how companies prioritize. 1. Workers need to be valued above shareholders (drive long term growth rather than sacrificing the golden duck for next quarter's profit) 2. Discrepancy between CEO and average pay needs to be curtailed - the current balance is driving a huge wedge into the relationship between a company and its employees. 3. Remove the inappropriate leverage that companies wield by controlling your healthcare/medical insurance costs 4. Remove pools of labor that are self-defeating: Jobs that pay so little the employee must be subsidized by government programs to live (think walmart/uber/etc) The best course of action here is likely labor movements (unions)

kelseyfrog 4y ago
German readers, in your opinion, a Betriebsräte deal with many of these problems, no?
- 7steps2much 4y ago
  Well, not necessarily. In terms of raises/salary increases that's more of an issue for the unions than the Betriebsrat, since it usually concerns a whole industry and not just a single company. As for the "valuing workers over shareholders" stuff ... Well, maybe? To be perfectly honest this isn't really what a Betriebsrat is about. I mean sure, they do have some influence, but in general their territory is more in terms of company operations, less in terms of how much is paid out to shareholders. To be perfectly honest the Betriebsräte are facing much of the same problems that most other elected bodies are facing in the western world (or at least Germany). Sinking voting share, less and less people caring about it and as they kind of loose some soft power. They still have the hard power guaranteed by law of course, but their soft power is essentially waning.
  - kelseyfrog 4y ago
    Thank you for the perspective. It helps to know more about the successes and failings of institutions before I go about suggesting their use. :)
mox1 4y ago
I really think decoupling health insurance from employment would go a loooong way to fixing some things and be such a long term beneficial thing. I'm not sure the best way to do, but I would love to see it happen.
charlie0 4y ago
I would also add that stock compensation needs to be vested over a longer period. This would help discourage short term thinking.

jerf 4y ago

A lot of people think that companies aren't paying their employees well because they're greedily hording cash and if they'd just give that cash to their employees, wealth problems would be solved. I would suggest to these people to spend some time looking at the largest companies in the world, taking their profits for the year, and dividing by the number of employees they have. I have done this exercise a few times. It will open your eyes about a lot of things w.r.t. business. We here on HN are the ones who need to do this most of all because we work in the industries and companies that have for the last 10 years actually made enough money that the division results in something significant. This is not the norm. You can easily end up with values in the hundreds of dollars of profit/employee for a more normal industry. Even if the profits were 100% shared, we aren't necessarily talking about pulling people out of poverty or something. The parasite class in society is smaller than you think, percentage-wise. Quite a lot of us go to supporting just one of them. I think getting rid of them would be a great boon... but not because simply redistributing their wealth would solve very much. The real problem they create is that they steal $X dollars and end up creating second-order effects that mean $X·Y dollars of wealth are never created in the first place, where Y is pretty significant.

rightbyte 4y ago
For Amazon 2021 it seems like quite alot though. 33,3 billion USD profits/1,622,000 employees = 20k USD/employee The median employee made 29k in 2020. https://www.businessinsider.com/amazon-employee-salary-pay-median-worker-compensation-compared-jeff-bezos-2021-4?r=US&IR=T https://www.businessinsider.com/amazon-employee-salary-pay-m...
- queuebert 4y ago
  Maybe they have a lot of part-time employees.
c22 4y ago
I just tried this with 10 random companies from the tail end of the s&p 500, I didn't cherry pick anything: 2021 profit # employees profit/employee DISH Network Corporation $ 6.143B 16,000 383,937 FOX Corporation $12.909B 9,000 1,433,333 Wynn Resorts Limited $ 1.205B 30,200 39,735 American Airlines Group $ 2.046B 123,400 16,580 Bath & Body Works Inc $ 3.096B 92,300 33,542 Hasbro Inc $ 6.42B 5,600 1,146,428 Advance Auto Parts Inc $ 4.929B 68,000 72,485 MGM Resorts International $ 9.68B 74,500 129,932 Hormel Foods Corporation $ 1.928B 20,000 96,400 Paycom Software Inc $ 0.89B 5,385 165,273