Whoa, hey, settle down. I started this Pit thread. I already hate the bastards. You pointed out they already spent the money, I assumed that was what they were supposed to do with it.
I know you’ve denounced this analagy but I just wanted to mention that this is very much like how some rather large charities get people to donate.
“Only 49 cents a day and you can sponsor an entire village including a goat and a chicken.”
It’s not real money. No one saves 49 cents a day. $15.00 a month or $180 a year makes more sense but you’re not likely to get people to donate that much.
Unfortunately, this is one of many things that caused horrible problems at Enron among others. When you incent CEOs with the stock price, they are motivated to drive the stock price up by any means necessary. Money-hungry CEOs end up lying, stealing, and cheating in all manner of ways to make the stock price higher, even as the company and its products collapse under them. Tying CEO compensation to stock prices was a major reform effort of the 1990’s, but it’s been largely discredited now due to the many opportunities it afforded for stock manipulation and dirty dealings.
I think it goes even further. More and more corporations are driven by stock prices rather than the bottom line of earnings and return on investment. At one time people owned stocks for the dividend as much or more so than the potential capital gain. This is what drove the Internet bubble.
I see what you mean, but the company being 100% employee owned somewhat short-circuits this form of greed; there is no pay-out outside the company, and no external input on how to run the company. It seems to be a slight difference, but significant enough that the CEOs of this company buy into the idea that doing things the right way makes everyone more money. I would go so far as to say that this fully employee-owned company is an example of capitalism done right - the ultimate goal is still to make money and no one gets a free ride, but everyone benefits. I don’t have any idea if this model would work for everyone, but it is working like crazy for this particular company.
Nooooo!, the proletariat owning the means of production?, you Marxist fiend! :dubious:
You’re talking like an anarchist. I applaud you.
Dammit! I thought I was hiding that better!
I’m the hubby featherlou mentioned, working for the big-ass, privately owned corporation. A little background on the company: We’re over a century old, by far the largest construction management company in Canada, seventh largest in the United States, and 100% employee-owned.
As mentioned, I think the key difference between my company and someone like Enron is the privately owned element. Share values are determined by the company, based on our profitability, not on whether speculators are buying or selling stock. Dividends from those stocks are based purely on the bottom line and are little more than an incentive bonus for everyone in the company – the company doesn’t need the operating capital generated by share sales and so the company’s viability in the marketplace is not tied to share value or overall investment. Ultimately, in our case, the shares are simply a motivator for every employee to do their level best to consistently add value to the company. So all motivation created by our stocks is to improve the company and do what is best from a business standpoint, not simply what will keep the shareholders and the CEO getting paid. Everybody wins, or everybody loses, depending on what everyone does.
Does that make any sense?
P.S. Last year’s dividend came out to right around 60% ROI. Even for someone in my lowly station within the company, that meant a substantial, very sweet windfall. Just sayin’ 
Are the shares part of your salary, or do you have to purchase them? Do you get to vote on things at the company AGM?
You have to purchase them. There is a share offering once a year for all employees, every spring, the amount of which is tied to your relative position on the corporate totem pole and the availability of shares. You can buy none, some, or all of the offering, with no pressure one way or the other. As you move up the ladder, you are eligible to purchase voting shares (although I’m not currently at that level). So the deck is still stacked in favour of the top dogs, but from my standpoint it’s still much more equitable than your typical corporate model.
Can you sell your shares at any time to whom ever you like?
How does your salary compare to the salary of someone with a similar position at another company?
What is the money generated by the annual share issue used for?
Who has access to the data on share ownership? Could it conceivably be used in a prejudicial manner with regards to your post?
I’m not trying to rubbish the idea, I’m just curious as to how it works. I very much like the idea of the means of production being owned by the workers.
So, the way to change that, it would seem to me, is to pay them mostly in stock that doesn’t vest for at least a couple of years. That would do a lot to extend the horizons for their planning beyond the next quarter, and possibly smooth out the bumps in the whole economy if everyone did it that way. Then there would be some incentive to manage conservatively instead of just lobbying/voting conservatively. As one who lives conservative and votes liberal, I like the idea of that.
You can sell your shares back to the company at any time, for whatever the current market value is, but you can’t deal them to another employee or a non-employee.
Salaries are competitive with the market, but not at the top of the scale. The popular adage around the office is that no one works here for salary, but for the dividends.
The money rolls into the company’s general resource pool and becomes part of our operating capital, but our annual numbers pretty clearly demonstrate that if everyone sold all their shares tomorrow, the company would still have more than enough operating capital to continue on with nary a slowdown.
As far as I am aware, all the financial figures are a matter of public record. For example, I saw a bunch of the numbers bandied about in a newspaper article comparing our business strategy with that of one of our publicly owned competitors. Finding out exactly how many shares each and every employee owns might be tough to locate, but share value and dividend values are all relatively easy information to get – it’s essentially part of the attraction of working for the company and a means for luring the best and brightest employees to us.
All very good questions! Feel free to pick my brains further, if you have any other questions.
As another example of doing things the right way, which I only know of anecdotally, a former employer of mine was frequently talking about a textile company he had heard about in the United States which hadn’t increased hourly wages in over 50 years. This particular company apparently paid everyone minimum wage and then cut every employee a profit-sharing cheque each month, based on seniority. The profit-sharing money was apparently so good that the workers never felt the need to demand higher base wages. But, again, I can neither confirm nor deny the existence of this company, except that I heard the story many times (ironically, that particular boss, who was so high on the concept of profit-sharing, never did implement such a program at his business, even though he thought it was a better way to operate).