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Ok, I think I understand the point you were trying to make. As a statement by itself, sure, if your compensation is at least in part tied to the share price, th
by solatic 4y ago
Ok, I think I understand the point you were trying to make. As a statement by itself, sure, if your compensation is at least in part tied to the share price, then you have a financial interest in increasing the share price. But you don't benefit anymore from a rising share price if you get laid off and are no longer receiving any compensation, let alone share-based compensation, from the company (presumably you would sell your shares once you leave to ensure that your investment portfolio is diversified and you no longer have an insider perspective).
Put another way, imagine that you have a choice between getting $1 guaranteed, and a 50/50 chance of getting $2 or nothing. Statistically, they have the same expected value, and you would expect a random population sample to evenly split their preferences between the two options, depending on individual appetite for risk. But actually, most people will prefer the $1 guaranteed. Indeed, even when the riskier option has a much higher statistical expected value, most people still prefer the guaranteed payout. See for example https://www.quora.com/Would-you-rather-have-a-50-50-chance-at-1-million-or-take-a-guaranteed-250K https://www.quora.com/Would-you-rather-have-a-50-50-chance-a... , and there are many such examples to draw from.
So, no, I don't think employees benefit the same way from increases in stock price, as do shareholders, even when employees are also shareholders. Stability is quite simply a much stronger preference held by most employees.