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Getting some of your salary in stock options isn't really an employee owned company. How many % of total Google shares are owned by employees (excluding the fou

Getting some of your salary in stock options isn't really an employee owned company. How many % of total Google shares are owned by employees (excluding the founding employees)? 0,0000000001%? At least 50% would be required for it to be viewed as an employee owned company.

nostrademons 2y ago
I don't know about Google specifically, but I know that it's way more than 0.0000000001% because I personally have been paid more than 0.0001% of Google in stock compensation. A typical Series A startup reserves 20% of the company for the option pool, and then there are follow-on refresh grants. Note that if you run the math on the company in the article, they're considerably less generous than that. They say they have 1500 employees, $1B in revenue, and the average employee makes about 8-26% of their earnings. Figure that's maybe $20K/employee * 1500 employees = $30M in stock compensation on $1B in revenue, so they spend 3% of their revenue on stock compensation. If you figure the company is valued at $4B, they're giving away like 0.75% of the company per year, a bit less than Google and way less than a tech startup. This is probably a PR hit for Central States Manufacturing anyway, to help their recruitment efforts.
stagger87 2y ago
In an ESOP, employees typically own 100% of the stock.
jonas21 2y ago
Google spent $22 billion on stock-based compensation in 2023 [1]. That's over 1% of the stock of the company transferred to employees in one year. Now, many people probably sell that stock as soon as they can, so the employee ownership isn't cumulative over the years. But it would be quite hostile to employees to stop them from doing this in an effort to make the company more employee-owned. [1] https://abc.xyz/assets/52/88/5de1d06943cebc569ee3aa3a6ded/goog023-alphabet-2023-annual-report-web-1.pdf https://abc.xyz/assets/52/88/5de1d06943cebc569ee3aa3a6ded/go...
- YokoZar 2y ago
  Indeed, employees often effectively sell their stock to existing owners via share buybacks. This seems entirely rational to me - I've bet a significant part of my career on the success of the company I work for, why should I also bet my savings? Diversification has real value, and going all-in on one company is just a bad bet.
  - Gormo 2y ago
    At the end of the day, an employee is just a special class of vendor -- scrape away all of the normative cruft that gets injected into these discussions, and you have a fee-for-service relationship between a customer and a supplier. And lots of people would rather just be that supplier, who gets paid a specified amount of money for a specified provision of service, and not be forced to bear short-term risk or to hold out for a long-term upside that depends on lots of stuff they have no control over working out for the best.
    - shalmanese 2y ago
      Well, they're different in that they're vendors and also vendees. The theory behind employee ownership is that it makes them better vendees on top of maybe making them better vendors.
      - rrnechmech 2y ago
        > vendees "Customers"?
      - Gormo 2y ago
        Can you explain what you mean? How are vendors selling services to an organization also "vendees" within the same capacity?
  - nostrademons 2y ago
    nit: With a buyback, the buyer is the corporation itself, and the cash comes from the corporate treasury. Transitively this is "selling to existing owners", but it's not like their shares are transferred to other shareholders. Rather, the shares cease to exist and the value of all other shares increases to reflect the reduced number of shares outstanding. Mechanically it's pretty similar to if the company had just paid out cash as salaries (cash leaves the corporate treasury and enters the employee's brokerage account at market values), but the market is the intermediary, and the tax and accounting treatment is pretty different.
shric 2y ago
Also it's generally unwise to hold onto your employer's stocks that you were granted as single stock ownership is inherently risky. There's no reason to believe your employer's shares are going to beat the market. Also, the majority of employees in a company other than small startups do not have the ability to shift their company's success materially to make it a worthy incentive to own and hold employer issued stock.
- bruce511 2y ago
  Agreed. Plus it's bad to have your investments and job in the same place. If the company fails you lose you job and savings at the same time. Yes, there are non-financial reasons to have "shares in the place where I work". But financially it's a bad investment. (If the shares come with management rights, responsibilities, obligations, decision making, that's different.)
- ellegriffin 2y ago
  90% of employee owners also have a 401k or retirement account. An ESOP account is in addition to their retirement account, not instead of it. So it's actually more of an upside without any downside.
  - shric 2y ago
    My comment was on holding them, not receiving. That is, you should treat them like receiving cash and convert them into whatever you would normally do wisely with extra cash you received.
VirusNewbie 2y ago
wow. Off by millions of orders of magnitude, impressive!
- nostrademons 2y ago
  Technically off by 6 orders of magnitude, or a factor of a million. Orders of magnitude are exponential - each order of magnitude is a factor of 10 more than the last, so you take the log10 of the factor of increase.
  - VirusNewbie 2y ago
    Til. thanks.

nostrademons 2y ago

I don't know about Google specifically, but I know that it's way more than 0.0000000001% because I personally have been paid more than 0.0001% of Google in stock compensation. A typical Series A startup reserves 20% of the company for the option pool, and then there are follow-on refresh grants. Note that if you run the math on the company in the article, they're considerably less generous than that. They say they have 1500 employees, $1B in revenue, and the average employee makes about 8-26% of their earnings. Figure that's maybe $20K/employee * 1500 employees = $30M in stock compensation on $1B in revenue, so they spend 3% of their revenue on stock compensation. If you figure the company is valued at $4B, they're giving away like 0.75% of the company per year, a bit less than Google and way less than a tech startup. This is probably a PR hit for Central States Manufacturing anyway, to help their recruitment efforts.

stagger87 2y ago

In an ESOP, employees typically own 100% of the stock.

jonas21 2y ago

Google spent $22 billion on stock-based compensation in 2023 [1]. That's over 1% of the stock of the company transferred to employees in one year. Now, many people probably sell that stock as soon as they can, so the employee ownership isn't cumulative over the years. But it would be quite hostile to employees to stop them from doing this in an effort to make the company more employee-owned. [1] https://abc.xyz/assets/52/88/5de1d06943cebc569ee3aa3a6ded/goog023-alphabet-2023-annual-report-web-1.pdf https://abc.xyz/assets/52/88/5de1d06943cebc569ee3aa3a6ded/go...

YokoZar 2y ago
Indeed, employees often effectively sell their stock to existing owners via share buybacks. This seems entirely rational to me - I've bet a significant part of my career on the success of the company I work for, why should I also bet my savings? Diversification has real value, and going all-in on one company is just a bad bet.
- Gormo 2y ago
  At the end of the day, an employee is just a special class of vendor -- scrape away all of the normative cruft that gets injected into these discussions, and you have a fee-for-service relationship between a customer and a supplier. And lots of people would rather just be that supplier, who gets paid a specified amount of money for a specified provision of service, and not be forced to bear short-term risk or to hold out for a long-term upside that depends on lots of stuff they have no control over working out for the best.
  - shalmanese 2y ago
    Well, they're different in that they're vendors and also vendees. The theory behind employee ownership is that it makes them better vendees on top of maybe making them better vendors.
    - rrnechmech 2y ago
      > vendees "Customers"?
    - Gormo 2y ago
      Can you explain what you mean? How are vendors selling services to an organization also "vendees" within the same capacity?
- nostrademons 2y ago
  nit: With a buyback, the buyer is the corporation itself, and the cash comes from the corporate treasury. Transitively this is "selling to existing owners", but it's not like their shares are transferred to other shareholders. Rather, the shares cease to exist and the value of all other shares increases to reflect the reduced number of shares outstanding. Mechanically it's pretty similar to if the company had just paid out cash as salaries (cash leaves the corporate treasury and enters the employee's brokerage account at market values), but the market is the intermediary, and the tax and accounting treatment is pretty different.

shric 2y ago

Also it's generally unwise to hold onto your employer's stocks that you were granted as single stock ownership is inherently risky. There's no reason to believe your employer's shares are going to beat the market. Also, the majority of employees in a company other than small startups do not have the ability to shift their company's success materially to make it a worthy incentive to own and hold employer issued stock.

bruce511 2y ago
Agreed. Plus it's bad to have your investments and job in the same place. If the company fails you lose you job and savings at the same time. Yes, there are non-financial reasons to have "shares in the place where I work". But financially it's a bad investment. (If the shares come with management rights, responsibilities, obligations, decision making, that's different.)
ellegriffin 2y ago
90% of employee owners also have a 401k or retirement account. An ESOP account is in addition to their retirement account, not instead of it. So it's actually more of an upside without any downside.
- shric 2y ago
  My comment was on holding them, not receiving. That is, you should treat them like receiving cash and convert them into whatever you would normally do wisely with extra cash you received.

VirusNewbie 2y ago

wow. Off by millions of orders of magnitude, impressive!

nostrademons 2y ago
Technically off by 6 orders of magnitude, or a factor of a million. Orders of magnitude are exponential - each order of magnitude is a factor of 10 more than the last, so you take the log10 of the factor of increase.
- VirusNewbie 2y ago
  Til. thanks.