Comments about ‘John Hoffmire: Why shouldn’t employees own more of the companies they work for?’

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Published: Monday, April 21 2014 8:17 a.m. MDT

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UtahBlueDevil
Durham, NC

ESOPs were what made the tech boom great. I personally benefited from them greatly. But for some reason the tax code was changed, and because of that, most companies have rolled back their plans to few offering them. When you dedicate 5/7ths of your life to an endeavor, having a stake in that enterprises success would seem to be a logic thing to do.

But alas, stop options/grans and now mostly the domain of high end executives that make most of their money through these incentive programs. It is a real shame. I know not all people work differently when there is a carrot… but I sure do. If I am going to spend time away from my family and those I love, I want that time to be worth as mock as is humanly possible.

Screwdriver
Casa Grande, AZ

Simply because capital interests don't value the contributions of most employees in the first place so they place no value on employee commitment.

From the capitalist point of view, negotiating with employee/shareholders would be just as bad or worse as negotiating with a union and they just can't have it.

LDS Liberal
Farmington, UT

Answer: GREED

Case in Point --

During WWII, the government froze wages across the coutry for the war effort to abait price gouging and limit inflation.

The only go-around for corporations to attract the best employees was to increase "benefits".
They began offering Insurance packages - Life, Health, Dental, Retirement, and of course company STOCK.

It worked great.

The problem was, after 40 years of buying stock options -- those employees began retiring and cashing in on the investment of the fruits of THEIR labors.

By the 1960-10970's -- they themselves had become $Millionaires,
much to the coringe of Coroporate executives.

The practiced stopped in the 1970's -- and by the 1990's -- only Corporate Executives were recieveing Stock Options.

Which is why most Corporate CEOs who really screw things up, stll end up being handed Multi-million dollar hand-shakes.

STOCK.

It's only for the Haves -- and not for the Have-nots.

Mountanman
Hayden, ID

It always amazes me how some many uneducated people detest "evil" corporations. Corporations can't tax you, put you in prison or confiscate your property. Doing business with any corporation is completely voluntary, no one forces you. For those of you who hate corporations don't buy their products! Of course that means you will have to give up your car, most of your food, your clothing you medicines and your toys, all manufactured by "evil, greedy" corporations.

airnaut
Everett, 00

@Mountanman
Hayden, ID

Good advise.

For those of you who hate SOCIALSIM or COMMUNISM don't buy their products! Of course that means you will have to give up your car, most of your food, your clothing your medicines and your toys, all manufactured by "evil, greedy" Socialsits and Communists.

airnaut
Everett, 00

I remember another good example of this -- MicroSoft.

For the 1st 20 years, MicroSoft had set wages.
Usually $10-$30K a year.

The insentive to perform was given through Company Stock Options.

When a new product launched,
The employees on that project were given shares of MS stock based on performance [say 1-1,000 depending on output],
and up to 6 months paid time off for doing a great job.

Within 10 years, there were hundreds if not thousands of Millionaires walking around the MS campus.

Of course -- not all 100,000 employees can be a maillionaires, so they dialed that back....but programs like this DO in fact work.

Sharing works.

It made Bill Gates the richest man in the world --
and 10,000 of his emplyees millionaires.

Mike Richards
South Jordan, Utah

Greed has nothing to do with buying stock. You can buy stock in any company that has stock traded on the stock exchange. If you want to own part of IBM or Apple or any other publicly traded company, you can buy stock.

Those who cite "greed" are off base.

If a company has a 401K plan, and if an employee takes advantage of that plan, that employee becomes a stock holder. Many companies match employee contributions up to a certain percent.

A system that is better than buying stock is profit sharing. Every company that I've worked for has had profit sharing. Each department had a representative that voted in company meetings. In those meeting, basic business strategy was discussed. If a department wanted more workers, everyone learned how hiring more people affected the bottom line. If a department wanted to give employees raises, everyone learned how paying more for labor affected the bottom line. Employees in those companies became "accounting literate". They saw the relationship between costs and profits. We learned to add value by increasing our skills.

airnaut
Everett, 00

Gee Mike --

I guess you have something against "employee owned and operated".

Greed has everything to do with it.

You can't just go out and buy stock in "privately held" corporations.
[Most of America's Oil and Food corporations are Privately held].

And he who owns the Food and Energy -- owns the world.

marxist
Salt Lake City, UT

I'm for employee ownership outright, not minority ownership. The writer means well, but his examples are not far enough to suit me.

The problem in capitalism is EMPLOYEE status. It's the generator of exploitation and conflict. BTW, the nature of the employer makes no difference. For example, publicly owned universities are among the worst exploiters known.

RedShirt
USS Enterprise, UT

Ok liberals, explain why employees can't buy stock in their publicly traded businesses that they work for?

While it sounds great, lets look at what happens when people invest entirely in their company. Do you remember ENRON? The employees "owned" the company, but when it sank, it took everybody with them. Do you want to see more "ENRON" type collapses going on?

To "airnaut" you do know that quite often when the companies offer stock in the privately held corporations they can classify it so that they are non-voting stocks and have little to no value. What is the point if I have 100 shares of stock that don't allow me to vote on leadership and are very difficult to sell?

The question shouldn't be "Why shouldn't employees own more of the companies they work for?" It should be "Why force business owners to sell of part of their companies when they don't want to?"

To "marxist" you do realize that without capitalizm poverty and starvation are worse. In Russia 95% of farms were owed by the state, but it was the 5% that were private that produced most of the food. Why repeat a failed system?

Ultra Bob
Cottonwood Heights, UT

One of the more important fundamentals of Capitalistic business is the knowing when to get in and when to get out of the business. Getting out of a business operation with a minimum of loss is a matter of transferring the ownership to someone else without causing any concern for other investors or employees.

Employee Stock Option plans can provide just such a solution.

marxist
Salt Lake City, UT

Means must be found to be more humane and cooperative, to soften the blows to our environment, and to keep the benefits of technology. Ways must be found to do these things. I certainly don't have the answers, but I'm pretty sure some brand of socialism is going to be necessary.

The discipline of economics must find a way to make a more concrete contribution. It can do that by allowing Marxian analysis into its tool kit. At this point that is all I really ask.

RedShirt
USS Enterprise, UT

To "marxist" we have seen what happens with "Marxian analysis" is used to care for economies. Unfortunately it usually ends in hudreds of thousands to millions being killed because they don't fit into the equations.

Mike Richards
South Jordan, Utah

Airnaut,

You should have done your homework before posting. The SEC requires companies to go public when certain boundaries are reached. You may want to buy stock in a small company that has no track record, but doing that historically leads to lost money. If you want to buy stock in a family farm, ask your lawyer to approach that family and make an offer. If you want to invest in an oil well, do the same thing. But, if you want to buy stock in a company that has a track record, you'd better do a lot of homework, or you'll lose your investment.

It's a well know fact that Microsoft gave stock options instead of decent wages. Microsoft also "required" salaried employees to work 80 hour weeks. Those "stock options" cost much less than paying overtime.

pragmatistferlife
salt lake city, utah

It stuns me when "conservatives" argue against an idea such as employee ownership. And Mike it is in fact greed that stops this kind of thing.

Most major corps (small businesses may be different, but I doubt it much) pay the majority of their executive compensation in various forms of stocks. Why because that's where the value is. So why don't companies at least share some of that value with regular employees...greed. They give the crumbs/wages to the employees, and the fat to the execs.

I've personally lived this and while it's sweet on the receiving end it's obvious greed when you're not.

RedShirt
USS Enterprise, UT

To "pragmatistferlife" I am constantly amazed at the greed of the liberals. They bemoan the wealthy, then want to take what does not belong to them.

Since when it is it the duty of you, or the government to decide what compensation is justified? You complain about a CEO earning millions, yet have no problem with an actor, singer, or Pro-Sports player earning millions. Even Obama, has reported million dollar incomes from selling book, yet that isn't a problem. The Clintons can charge a million dollars to speak at a corporate event for 1 hour, and that is ok. Yet we never hear about the greed of the liberals, just their benevolence.

Why punish the people who create jobs through their leadership and investments? You forget that the worker that demands more pay without more production is just as greedy as you claim executives to be.

In the big companies, the regular employees can get socks. In fact Turbo Tax reports that most large companies offer ESOPs. If few employees buy the stock, who's fault is that?

pragmatistferlife
salt lake city, utah

Redshirt: " I am constantly amazed at the greed of the liberals. They bemoan the wealthy, then want to take what does not belong to them." How does this have anything to do with corporate profit sharing and employee ownership. It doesn't.

"You complain about a CEO earning millions, yet have no problem with an actor, singer, or Pro-Sports player earning millions. Even Obama, has reported million dollar incomes from selling book, yet that isn't a problem. The Clintons can charge a million dollars to speak at a corporate event for 1 hour, and that is ok. Yet we never hear about the greed of the liberals, just their benevolence...You complain about a CEO earning millions."

You are absolutely wrong about this second part..for the millionth time liberals do not have a problem with someone getting rich. They do have a problem with someone getting rich at the expense of others and they do see something wrong with a system that pays a CEO 400 times as much as a worker.

As a matter of fact that's the point of this article. Make millions, just share with those who made it possible.

You

Mike Richards
South Jordan, Utah

People who know nothing about owning and running a business think that if they repeat something often enough, that it will become true. They don't know the first thing about labor. Some even have the false idea that labor means that the "laborer" is entitled to ownership of the company. I can't wait until their lawncare service asks for the deed to their house.

Officers are often paid with stock because their job is to increase the value of the company. If they succeed, the value increases and the stock increases in value. They receive stock in lieu of wages. Companies are forbidden by the government from not paying their employees for the work performed. They can't give stock options in lieu of wages. If the company decides to offer stock in addition to wages, that company is not paying the employee full value for work done. If your lawncare service demanded a malt after mowing the lawn, you would deduct the price of the malt from their payment.

Businessmen are not dupes. Most get a good laugh from reading posts.

Happy Valley Heretic
Orem, UT

"The virtue of selfishness" by Ayn Rand, a set of scriptures with justification of greed, that conservatives see as a handbook of ethics.

Employee owned, doesn't consolidate power in one persons hands, but shares both losses and gains with the employees (owners). Instead of the employees taking the losses and the owners taking the gains, or the other conservative motto "socialize the costs, privatize the profits"

"Punish those who create jobs?"
Tell you what, how about we reward them for actually creating jobs, not reward them for the "belief" that they create jobs, we did that with trickle down, turns out they didn't even let it trickle, they shoved those tax breaks right into their offshore accounts and got back to gaming the system.

Winco is where I shop for groceries, employee owned.

Jamescmeyer
Midwest City, USA, OK

On the one hand, the idea of having a stake in my company's success sounds logical. If the company succeeds, I succeed, so my work had better be toward making the company succeed!

On the other hand, it is riskier. Hmm...

I guess I like the idea of bonuses and extras being in the form of stocks, with a reliable base wage.

@airnaut

Socialism doesn't produce food, toys, and clothing. Those are things people in socialist countries would love to have, but no one will produce them because it will be taken from them and given to others.

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