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Would it be fair to say that companies like AMZN or GOOG have "employee ownership" because of the stock options? If so, it means many tech companies meet this d

Would it be fair to say that companies like AMZN or GOOG have "employee ownership" because of the stock options? If so, it means many tech companies meet this definition.

dmoy 3y ago
The percentage of ownership is relevant, as is where the profit goes.
- Ericson2314 3y ago
  Board control is probably more important than profit on this one, I'd say
  - dmoy 3y ago
    Right, percentage of ownership (since board control stems from that?)
stonogo 3y ago
Not really, but technically yes. "Employee-owned" is being used in a specific way here; it's a specific form of ownership governance. Most often the shares are owned by employees via a trust, which the business funds. None (or mostly none!) of the stock options available to Amazon or Google staff are useful in terms of controlling the business. When someone is using the term "employee-owned business," they are generally referring to a business in which employees have actual control, not just a profit-sharing certificate. Of course, any publicly-traded company can be 'employee-owned' to whatever degree the employees buy shares. But this term usually indicates something else.
semanticist 3y ago
Most people working for Amazon don't get stock options, most of Amazon's employees are doing stock management in warehouses, delivery, etc. Beyond that, stock _options_ aren't stock, and stock _grants_ to employees are often in restricted classes... they're not meaningful employee ownership because they're structured to ensure that they don't represent any kind of employee control over the company.
- Anon1096 3y ago
  In many tech companies like Microsoft and Netflix, there is only 1 stock class and SWE employees get stock grants that aren't restricted on vest. You just conveniently picked the FAANG company where most of its workforce are warehouse employees.
  - dbingham 3y ago
    But the employees don't own a controlling share. For it to be a worker cooperative it really needs to be entirely owned and governed by the people working there.
    - jandrewrogers 3y ago
      The tradeoff is that requiring all shares be worker-owned devalues the shares owned by workers, due to massively reduced liquidity. This situation does not necessarily benefit the workers since they have an interest in maximizing the value of their share.
      - bboygravity 3y ago
        How does reduced liquidity equal lower share value? Makes no sense to me. Case in point example: SpaceX shares are very illiquid but also very very much up since SpaceX was founded.
        sokoloff 3y ago
        Suppose I own 0.01% of the company I work at. If that company is publicly traded, I can sell those shares to anyone. If that company is a co-op in which only employees are allowed to own shares, the only people I can sell my shares to are other employees. In general, more willing buyers (who in turn know they can they sell those shares unrestricted in the future to any buyer), increases the people willing to bid on those shares at any given moment in time. (It’s the same basic reason that you’d rather have $100 in cash than $100 gift card for Starbucks.)
burkaman 3y ago
No it wouldn't, see here for example: https://www.investopedia.com/articles/markets/011516/top-5-google-shareholders-goog.asp https://www.investopedia.com/articles/markets/011516/top-5-g.... All Google employees combined own probably less than 1% of the company. They would need to own at least 50% to accurately call it employee-owned.
- Quarrel 3y ago
  .. to be too pedantic, but it's only less than 1% if you exclude the founders, who are still employees. (and possibly Sundar?)
  - burkaman 3y ago
    You're right, I didn't realize they were still actively involved with the company. Sundar has 0.01% though.
dv_dt 3y ago
There are a lot of different co-op structures and different aspects of the broad term co-op. Employee ownership is one aspect that could be further broken down. Profit participation, worker-led governance and decision making, formal legal & tax categorizations are other interesting aspects. Stock options in small percentages are a form of profit participation but a weak contributor to the question on if a business is a co-op.
btbuildem 3y ago
It's not even in the same game, forget ballpark. Rank and file aren't really "shareholders". We hold an utterly insignificant stake compared to funds and other corps. They can take a board of directors and bend their beaks all they way back to their rectums, force them to act against a company's best interests. Employee ownership means the employees decide what they do with the profits derived from their labour. The company itself tends to benefit as well, in terms of stability, quality of work life, and long-term profitability.
mattbrewsbytes 3y ago
Employee ownership can't exist if its a publicly traded company. The co-op model is literal ownership of direction of the company, not just financial ownership. Most publicly traded companies aren't anywhere close to employee owned even though they may grant stock to employees. Those employees have no say on the company direction (see latest news about Google firing employees for protesting).

Would it be fair to say that companies like AMZN or GOOG have "employee ownership" because of the stock options? If so, it means many tech companies meet this definition.

dmoy 3y ago

The percentage of ownership is relevant, as is where the profit goes.

Ericson2314 3y ago
Board control is probably more important than profit on this one, I'd say
- dmoy 3y ago
  Right, percentage of ownership (since board control stems from that?)

stonogo 3y ago

Not really, but technically yes. "Employee-owned" is being used in a specific way here; it's a specific form of ownership governance. Most often the shares are owned by employees via a trust, which the business funds. None (or mostly none!) of the stock options available to Amazon or Google staff are useful in terms of controlling the business. When someone is using the term "employee-owned business," they are generally referring to a business in which employees have actual control, not just a profit-sharing certificate. Of course, any publicly-traded company can be 'employee-owned' to whatever degree the employees buy shares. But this term usually indicates something else.

semanticist 3y ago

Most people working for Amazon don't get stock options, most of Amazon's employees are doing stock management in warehouses, delivery, etc. Beyond that, stock _options_ aren't stock, and stock _grants_ to employees are often in restricted classes... they're not meaningful employee ownership because they're structured to ensure that they don't represent any kind of employee control over the company.

Anon1096 3y ago
In many tech companies like Microsoft and Netflix, there is only 1 stock class and SWE employees get stock grants that aren't restricted on vest. You just conveniently picked the FAANG company where most of its workforce are warehouse employees.
- dbingham 3y ago
  But the employees don't own a controlling share. For it to be a worker cooperative it really needs to be entirely owned and governed by the people working there.
  - jandrewrogers 3y ago
    The tradeoff is that requiring all shares be worker-owned devalues the shares owned by workers, due to massively reduced liquidity. This situation does not necessarily benefit the workers since they have an interest in maximizing the value of their share.
    - bboygravity 3y ago
      How does reduced liquidity equal lower share value? Makes no sense to me. Case in point example: SpaceX shares are very illiquid but also very very much up since SpaceX was founded.
      - sokoloff 3y ago
        Suppose I own 0.01% of the company I work at. If that company is publicly traded, I can sell those shares to anyone. If that company is a co-op in which only employees are allowed to own shares, the only people I can sell my shares to are other employees. In general, more willing buyers (who in turn know they can they sell those shares unrestricted in the future to any buyer), increases the people willing to bid on those shares at any given moment in time. (It’s the same basic reason that you’d rather have $100 in cash than $100 gift card for Starbucks.)

burkaman 3y ago

No it wouldn't, see here for example: https://www.investopedia.com/articles/markets/011516/top-5-google-shareholders-goog.asp https://www.investopedia.com/articles/markets/011516/top-5-g.... All Google employees combined own probably less than 1% of the company. They would need to own at least 50% to accurately call it employee-owned.

Quarrel 3y ago
.. to be too pedantic, but it's only less than 1% if you exclude the founders, who are still employees. (and possibly Sundar?)
- burkaman 3y ago
  You're right, I didn't realize they were still actively involved with the company. Sundar has 0.01% though.

dv_dt 3y ago

There are a lot of different co-op structures and different aspects of the broad term co-op. Employee ownership is one aspect that could be further broken down. Profit participation, worker-led governance and decision making, formal legal & tax categorizations are other interesting aspects. Stock options in small percentages are a form of profit participation but a weak contributor to the question on if a business is a co-op.

btbuildem 3y ago

It's not even in the same game, forget ballpark. Rank and file aren't really "shareholders". We hold an utterly insignificant stake compared to funds and other corps. They can take a board of directors and bend their beaks all they way back to their rectums, force them to act against a company's best interests. Employee ownership means the employees decide what they do with the profits derived from their labour. The company itself tends to benefit as well, in terms of stability, quality of work life, and long-term profitability.

mattbrewsbytes 3y ago

Employee ownership can't exist if its a publicly traded company. The co-op model is literal ownership of direction of the company, not just financial ownership. Most publicly traded companies aren't anywhere close to employee owned even though they may grant stock to employees. Those employees have no say on the company direction (see latest news about Google firing employees for protesting).