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>Every year, those employees get a percentage of their salaries in company stock. Ok? Anybody can choose to do this if they work at a public company. But what
by Murky3515 2y ago
>Every year, those employees get a percentage of their salaries in company stock.
Ok? Anybody can choose to do this if they work at a public company. But what happen if it's mandatory and the stock goes down? Now your labor was stolen at below market rate! Then we will hear "employees compensation should be resilient to market fluctuations."
- seanmcdirmid 2y agoPeople are lazy. You can always sell your grant as you get it, they can’t make holding stock mandatory, but a lot of people (including me) just hold the stock in a really undiversified portfolio.
- Murky3515 2y agoSo they're too lazy to buy stock when they get paid, but not too lazy to sell stock when they get paid?
- seanmcdirmid 2y agoHuh? The opposite, they don’t sell the stock they are granted to buy other stock instead to diversify their portfolio.
- oneshtein 2y agoThis will tank price of shares.
- eru 2y agoHuh, why, how?
- HelloNurse 2y agoOf not traded shares that don't really have a price?
- eru 2y agoWell, there's still a bid and an ask quote on the market, even when no trading is happening?
- eru 2y ago> You can always sell your grant as you get it, they can’t make holding stock mandatory, [...] They can. It's easy in private companies to limit what an employee can do with their stock, and in public companies they can insert a clause in the contract to that effect just fine. Or just have very long vesting periods. (Of course, as a would-be employee I would take these restrictions into account when deciding where to work.)
- seanmcdirmid 2y agoYou either own the stock or you don’t. If you paid federal income taxes on it, they have to let you sell it as you get it if you want, otherwise it isn’t real income. They can restrict when you sell it afterwards, but only in the cause of avoiding insider trading, and you can set up a plan to sell it blindly if you’d like.
- eru 2y agoIt's not nearly as simple as that. Look up eg a 'poison pill' for an example where you don't "either own or stock or you don't". (See https://en.wikipedia.org/wiki/Shareholder_rights_plan https://en.wikipedia.org/wiki/Shareholder_rights_plan)
- sofixa 2y agoNot every public company pays its employees in stocks/stock options/RSU/etc.
- dan-robertson 2y agoIf the company is public, one can simulate the scheme by buying their stock, I guess. Taxes may be different and phrased like that, it seems weirdly risky to buy more of the thing you’re most exposed to (if the company lays you off, the stock may be down too).
- glandium 2y ago> if the company lays you off, the stock may be down too Don't most layoffs make the stock go up?
- AnthonyMouse 2y agoLayoffs generally imply the company is contracting rather than expanding.
- Jensson 2y agoDepends on if you are cutting fat or cutting muscle.
- AnthonyMouse 2y agoThe Iron Law of Bureaucracy implies it's usually the second one though. If the company isn't already dying then the insiders will fight against cuts until it is.
- vineyardmike 2y agoTLDR: Research says no Some companies experience short-term improvements in price as their costs drop, but usually it has a longer-term impact on morale and productivity that takes longer to play out. Additionally, layoffs are typically performed on unhealthy companies (eg. not usually companies like Google and Meta that print cash and have huge margins), and unhealthy companies typically have other secular or structural issues beyond too-many-employees.
- jrflowers 2y agoI like this caricature of the spoiled entitled employee because it completely ignores the concept of shareholders having a say in governance. If stocks were only a proxy for money and nothing else the example would be spot-on.
- Gormo 2y agoCan you elaborate on how shareholders having a say in governance relates to worker compensation? Why shouldn't shareholders have control over governance?
- greycol 2y agoThey shouldn't have complete control over governence because, especially in larger businesses, the shareholders are less invested in what a business does than the stakeholders. A classic example would be an employee forced to work in an unhealthy manner. If the cost of replacing the employee when they're worn out is less than the extra profit made by causing the employee to work in that manner it might be the right form of governance for shareholders. Even if it would not be profitable if the health costs weren't externalised.
- deleted 2y ago[deleted]
- stavros 2y ago> If stocks were only a proxy for money and nothing else the example would be spot-on They are, in the modern startup world that HN is mostly in. That's why commenters here don't remember there are voting shares.
- coderatlarge 2y agoWhat are some corporate votes that you feel wider employee ownership would have improved?
- 2y ago
- phkahler 2y agoThis is not about publicly traded companies. It's about employee owned ones. Your point is still valid, but not in the way you think.
- Gormo 2y agoIf employees can't sell their shares on an open market, do they really own them? What does it mean for them to own the company if they can't trade their ownership stake for money, if that's what they want?
- grantsh 2y agoYou cannot invest money you don't have?