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CMV: All employees should be given equity in the company they work for.
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Just to be clear, are you saying this should be legally enforced? Or are you saying this is just the moral way every business owner should run their business, but without the backing of the law enforcing it?
I haven't necessarily determined if it should be legally enforced.
But at the very least, yes, it's the moral way a business should be run and I think it would be beneficial for everyone involved.
I think it would be beneficial for everyone involved.
A lot of business owners would say this clearly doesn't seem beneficial to them.
Is there a reason besides "If everyone else is doing it, the market will push you to do it too"/"it's a nice way to retain employees" that a business owner should choose to adopt this way of running their business?
It may not be monetarily beneficial to the business owner in the short term, but the productivity of their business could soar, and their employees would likely be happier.
Do you have any evidence this would increase productivity more than a normal pay raise or performance bonus
It certainly wouldn’t decrease productivity, given employees would still be able to get things like raises and bonuses. This leaves us at better or equal performance.
But is it better than the alternatives
I don’t think it’s necessarily an alternative to raises and bonuses, rather an additional avenue for compensation.
You realize this is a direct trade off with the alternatives. A business owner is going to give lower wages and bonuses if they are also required to give equity. This isn’t some infinite money glitch you think you’ve created. There are always trade offs and opportunity costs to every business regulation and decision.
Amen to this. OP is basically saying "in the compensation package given from employers to employees, which includes salary/wages, insurance, PTO, etc. employers must pay some of that in equity instead of through other means (e.g. a higher salary)", but I'm not convinced this is always - or even often - the right choice.
Or you could just give larger wages and bonuses. So once again is there evidence a dollar spent on giving equity increases performance more than a dollar in wages
Why would this way of incentivizing employees be better than just giving large salaries, big bonuses, a chill office culture, good work-life balance, etc.?
Why can’t you have all of those things? I don’t see how “chill office culture” and equity are mutually exclusive.
In economics, "there are no solutions, only trade-offs". Many of the examples I mentioned, like increased wages, directly cost the company money. This is money that they wouldn't have to give employees equity.
Many people look at the returns of a job holistically - It may fulfill a passion, it gives them money, it lets them work with people they enjoy, etc. getting equity in the company is merely one piece of that puzzle. I mean, I work at a non-profit, so getting equity isn't even really on the table, yet I still like working here for various other reasons.
I think equity can be a good incentive in some situations, like with startups. But I don't think it's the right answer in every case. If I just want a summer job, I'd prefer to just get paid in money and not vestable stock options, for instance.
My point in listing chill office culture is not to say it is incompatible with equity, but to mention that different things inspire employees besides money/equity. If you had to choose working at a place that gave you equity but was borderline abusive, and working at a place that paid the same, didn't pay any equity, but you felt loved, supported, and encouraged, most people would take the second option.
Okay, sure, but it could also NOT do that.