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Employment agreements, in terms of how risks are shared, differ in that employees and the state expect the employer to take a higher risk over the ups and downs

Employment agreements, in terms of how risks are shared, differ in that employees and the state expect the employer to take a higher risk over the ups and downs of the business in Europe than, say, in California. It has an effect over the meaning of share options. Employers do not have any incentive to share a positive future when (they perceive that) the employees do not share a negative present.

troels 14y ago
I'm not sure I understand what you mean. Usually, stock options would be accompanied with a lower salary. That is surely a negative present?
- opminion 14y ago
  Yes, but that would be assuming that salaries have a market value. In Spain salaries are often raised by collective bargaining. I don't know how much an effect it has on software developers, but the law is intended to raise the minimum salary for junior developers thus reducing the possibilities for a consensual agreement on a low salary. http://en.wikipedia.org/wiki/Collective_bargaining http://en.wikipedia.org/wiki/Collective_bargaining Similar for holidays, working hours, etc.
  - troels 14y ago
    OK. So you mean that compensation (The whole package, including social benefits, long vacations etc.) is greater in Europe, than it would in the states? I don't really believe that. Not if we're talking software engineers at least. A country like Spain would probably have average wages on the range of half what it would be in the states. And even in some of the better faring European countries, salaries still seems to be slightly less than what they are in the valley.
    - opminion 14y ago
      Of course I didn't say that. I said that compensation is affected by other forces than supply and demand (market value), so that the minimum compensation is higher than it would be at market value in that country, not that it is higher than in the US. Related to that, the southern European countries don't have individual control over the currency, so prices are higher than they would be if they were in control of the Euro. Salaries have been raised by law (civil service, collective bargaining, state pensions) in order to match prices. As a consequence, those salaries do not correspond to productivity, so employees are expensive, which pushes unemployment up. If you employ people in Italy a main problem will be that your employees have to pay European prices for food and clothing. In order to prevent what many consider abuse, there are laws protecting the minimum compensation you have to offer to them. The workaround for that is not share options, but the black market.

troels 14y ago

I'm not sure I understand what you mean. Usually, stock options would be accompanied with a lower salary. That is surely a negative present?

opminion 14y ago
Yes, but that would be assuming that salaries have a market value. In Spain salaries are often raised by collective bargaining. I don't know how much an effect it has on software developers, but the law is intended to raise the minimum salary for junior developers thus reducing the possibilities for a consensual agreement on a low salary. http://en.wikipedia.org/wiki/Collective_bargaining http://en.wikipedia.org/wiki/Collective_bargaining Similar for holidays, working hours, etc.
- troels 14y ago
  OK. So you mean that compensation (The whole package, including social benefits, long vacations etc.) is greater in Europe, than it would in the states? I don't really believe that. Not if we're talking software engineers at least. A country like Spain would probably have average wages on the range of half what it would be in the states. And even in some of the better faring European countries, salaries still seems to be slightly less than what they are in the valley.
  - opminion 14y ago
    Of course I didn't say that. I said that compensation is affected by other forces than supply and demand (market value), so that the minimum compensation is higher than it would be at market value in that country, not that it is higher than in the US. Related to that, the southern European countries don't have individual control over the currency, so prices are higher than they would be if they were in control of the Euro. Salaries have been raised by law (civil service, collective bargaining, state pensions) in order to match prices. As a consequence, those salaries do not correspond to productivity, so employees are expensive, which pushes unemployment up. If you employ people in Italy a main problem will be that your employees have to pay European prices for food and clothing. In order to prevent what many consider abuse, there are laws protecting the minimum compensation you have to offer to them. The workaround for that is not share options, but the black market.