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I disagree with toenail being downvoted. In Europe, employees enjoy a great deal of stability. In Netherlands, it's nigh-impossible to fire someone: you have to
by FooBarWidget 2y ago
I disagree with toenail being downvoted. In Europe, employees enjoy a great deal of stability. In Netherlands, it's nigh-impossible to fire someone: you have to fill in 10 pages of justification paperwork and have an independent government agency review and approve it. If someone has a long-term illness then you have to pay 70% of their salary for up to 2 years, even when they do no work at all. Most people don't want to be entrepreneur: they want clear instructions and stability. When you try to give stock to employees, the tax authorities raise an eyebrow: why would you give stock to employees when they enjoy none of your risks? It makes no sense, so we'll treat it as a form of salary, so we'll tax you 52% on the stock's paper value.
At the end of the day, what's left for the entrepreneur? You enjoy all the risk, but you don't get to have a paid 2 year sick leave. Even sympathy for your hard work can be hard to get. The potential of money is all you have.
Things are different in the US of course, where people can be fired the next minute without reason. That looks like just borderline abuse to me. But from a European perspective, the above comment does not deserve downvoting at all.
- supermatt 2y ago> why would you give stock to employees when they enjoy none of your risks? It makes no sense, so we'll treat it as a form of salary, so we'll tax you 52% on the stock's paper value. The Netherlands is the only country in the EU that taxes on unrealised gains.
- sabellito 2y agoNot sure if you mean just for stock options, but more countries/regions have some form wealth tax on unrealised gains.
- supermatt 2y agoJust stock, but I forgot that Spain also have stock included in wealth tax for people with over 700k assets. I think it’s just NL and ES though - I dont think any other EU countries tax stocks in this way?
- huijzer 2y agoWhat you get as an employee is certainty that your compensation will only increase in the single digits per year and that the pension fund will compound a part of your income in single digits as well (pension funds typically underperform the S&P; even in bad years). So either 2 years of “stable income” or the chance of much higher compounding rate. As I see it, employment is a nice backup if being self-employed doesn’t work out.
- binary132 2y agoEspecially given that many people will elect to be stably and cheaply employed and do just as good work as someone asking a “royalties model” fee basis for this kind of solution, it’s hard to see the advantage of going it alone. The competition is the ”cheap” FTE.
- kqr 2y ago> In Netherlands, it's nigh-impossible to fire someone: you have to fill in 10 pages of justification paperwork and have an independent government agency review and approve it. Practically speaking, won't they fire someone by negotiating a "voluntary" severance agreement? It's not like an employee wants to stay on for long once it's been made known that they are unwanted. Though obviously a severance agreement is better than at-will employment, it's also not a guarantee of long employment.
- FooBarWidget 2y agoThat is possible, but you'll have to go through a lawyer to draft a contract. It costs time and money (apart from the severance fee). Assuming negotiations are successful. It's still not easy.