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

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  • UtahBlueDevil Durham, NC
    April 21, 2014 8:43 a.m.

    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
    April 21, 2014 8:47 a.m.

    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
    April 21, 2014 8:54 a.m.

    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
    April 21, 2014 9:55 a.m.

    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
    April 21, 2014 10:22 a.m.

    @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
    April 21, 2014 10:31 a.m.

    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
    April 21, 2014 10:31 a.m.

    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
    April 21, 2014 11:12 a.m.

    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
    April 21, 2014 12:10 p.m.

    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
    April 21, 2014 12:28 p.m.

    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
    April 21, 2014 1:11 p.m.

    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
    April 21, 2014 1:31 p.m.

    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
    April 21, 2014 3:08 p.m.

    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
    April 21, 2014 3:57 p.m.

    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
    April 21, 2014 3:58 p.m.

    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
    April 21, 2014 4:36 p.m.

    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
    April 21, 2014 5:30 p.m.

    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
    April 21, 2014 8:38 p.m.

    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
    April 22, 2014 7:54 a.m.

    "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
    April 22, 2014 7:57 a.m.

    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.

  • pragmatistferlife salt lake city, utah
    April 22, 2014 8:31 a.m.

    "Some even have the false idea that labor means that the "laborer" is entitled to ownership of the company. "

    This is called climbing the ladder of inference. A very bad mistake in logic but a favorite of conservatives on this thread (sometimes the liberals do it too but it's a staple of the right).

    I say it would be a good idea if companies shared their ownership with their employees and you say I think that labor is "entitled" to ownership, and then off you go forming your polemic on this false premise.

    " If the company decides to offer stock in addition to wages, that company is not paying the employee full value for work done."..huh? Trust me Mike this is exactly how ordinary employees accumulate vast wealth when working for a company that is doing well. They make multiples of what their "labor" is worth. I can give you addresses and phone numbers if you like.

  • RedShirt USS Enterprise, UT
    April 22, 2014 9:01 a.m.

    To "pragmatistferlife" if liberals don't have a problem with people getting rich, then why is it that they are making it so difficult to become rich? Why do they insist that the rich pay more in taxes? Why insist that workers own a portion of the company they work for?

    What you claim, and what liberals do seem to be opposites. Unless you mean liberals have no problem with liberals being rich, but hate it when conservatives get rich.

    If liberals don't mind people getting rich, then why is it that they have enacted so many regulations and tax laws that it is becoming increasingly more difficult to start a business? Why not cut back on regulations and taxes to encourage new businesses?

  • airnaut Everett, 00
    April 22, 2014 10:18 a.m.

    @Jamescmeyer
    Midwest City, USA, OK

    @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.

    7:57 a.m. April 22, 2014

    =====

    ???
    Are you serious?

    Do you know ANY Socialist Countries?
    Can you name one?

    How about Communist Countries?

    Try looking at the "Made in" labels of just about everything you own,
    and get back to me after you look them up in Wikipedia.

    (That comment was about as off based and factless as they come.)

  • Hank_Rearden Orem, UT
    April 22, 2014 2:14 p.m.

    If I'm not mistaken, an employee doesn't create a company, he works there because the employer (the entrepreneur- the risk taker) needs help delivering his product. Companies don't go into business to hire employees, they go into business to make money. Employees get to punch a clock and go home without a care in the world. Meanwhile an employer is kept awake at night worrying about the viability of this company, and yes- his employees. He pays the highest taxes in the company, he takes the most risk of anyone involved, and as a result he makes more than his employees (after he's paid off his loans and his house since he had to leverage that to get his business started).
    My advice to any and all employees looking to own more of the company they work for: Quit your job and start your own business! Share your company with your employees. Until then, count your blessings that you have a job, healthcare, and a 401k-for all of which you may thank your employer.

  • pragmatistferlife salt lake city, utah
    April 22, 2014 5:16 p.m.

    Oh my word Redshirt;

    You tax the rich more because that is where the wealth is, and they only get taxed more after they are rich. No prevention there at all.

    Regulations have nothing to do with whether people get rich. They have to do with a civil society. If that prevents someone from getting rich in an uncivilized way...good. However it has nothing to do with getting rich in general.

    What is most disturbing about your position though is you make no attempt at discussing the issue of the value and costs of employee stock ownership. It's entirely a rant against liberals.
    You even go to the extreme of assigning intent to general policies.

    I talked about climbing the ladder of inference. You are leaping over the ladder.

  • wrz Phoenix, AZ
    April 22, 2014 8:48 p.m.

    "Why shouldn’t employees own more of the companies they work for?"

    It's not difficult... go to a stock broker and by some company stock. But, if the business is a partnership, forget it. Get another job.

  • Redshirt1701 Deep Space 9, Ut
    April 23, 2014 8:16 a.m.

    To "pragmatistferlife" actually we don't tax wealth. We tax income. Those are two different things. You don't declare how much you have saved up when you file your taxes. You should also know that the wealthy spend a significant time protecting their income from taxes. Even with all of the protection they look for, they still are heavily taxed. For example, the top 1% earn 20% of all salaries, yet accout for 35% of all income taxes. The fact is that the more you make, the more you are taxed.

    As for regulations, those are important. The CEO of Home Depot and other large retail stores have stated that in today's regulatory climate they could not have started their stores.

    I know a person that is trying to start a business and the regulations that are stopping him from starting his business are amazing. He wants to start a simple business, and he has spent more on lawyers than on the actual business itself. The regulations are killing it.

    Yes I am against the liberals, they want to force businesses to sell off a portion of their businesses. That is not something that should be forced.

  • Happy Valley Heretic Orem, UT
    April 23, 2014 4:57 p.m.

    Redshirt: I know a person that is trying to start a business and the regulations that are stopping him from starting his business are amazing. He wants to start a simple business, and he has spent more on lawyers than on the actual business itself. The regulations are killing it.

    Local regs are the worst, ever try to get one of those elusive for chain restaurants only liquor permits?

  • RedShirtCalTech Pasedena, CA
    April 24, 2014 7:52 a.m.

    To "Happy Valley Heretic" the only beverages he is going to serve are soda in cans and water, so no liquor permits are even in the picture. He is starting up a business that is not part of a chain. It is 100% his idea and planning.

    Yes local regs are the worst, but the federal laws are just as bad. Just wait until tax time comes along and assuming he actually makes money.