Forum Post: An Idea: Employee Stock Ownership
Posted 13 years ago on Oct. 30, 2011, 10:23 p.m. EST by Rico
(3027)
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CEO pay, while offensive, is a nit in the overall scheme of things, and changing it will do little to fix inequality. Instead, why not require ALL corporations endow their employees with some percentage of all outstanding stock so the workers can participate in the record profits of the corporation they helped build ? Employee stock ownership is well known to improve company operations, AND the workers would then share in corporate profits. As SHAREHOLDERS, they could even VOTE on their CEO's pay !
can i get an amen?
If you haven't read Parecon by Michael Albert, maybe you should...your ideas seem similar
Required? hmm. Yeah I dont know about that. Requiring someone to give you stocks is as good as saying you are required to own them. Im not sure I like that very much.
Stock to me is much like fiat. Its just paper. It is only confidence that brings it its value. And stocks are shakier than the dollar these days. Stocks depend on the performance of ceo's to run the business well in order for there to be confidence in them, basically, among other things.
Maybe some people would like it, but I think a lot of people would be better off with another 25 cents an hour for things like food and gas, at this time, or to save it. (regardless of what they say these stocks are worth)
Im ok with people doing that if that's what they want. But I would choose to opt out, I think
Many of the profits of modern corporations are now derived from Capital Investment into computers, robotics, etc. If I want to expand my factory, I can get the capital from the "banksters," the 1%, OR from average Joe's buying stock issues. The stock approach seems the least egregious to me.
Granted, stock ownership is more risky than a flat pay raise, but I don't know how else to connect the worker into the profits deriving from capital investment OTHER than to make them stockholders ! Besides, there's some fairness in the approach; if We the People want the revenues created by capital investment, we're likely going to have to accept the same risks. If we're the WORKER'S however, we have more control over that risk than the external investor as WE can affect the outcome more readily.
Yes I see where you are going. Hmm. I wish I could put so much of my trust into stocks, but the derivatives bubble has just got me nervous.
Hey Rico, here;s a thought. I'm not sure I would even be for this but, like I said, it's only a thought. What about only taxing the money people spend? Anything you put away isn't touched. It wouldn't solve the mess we are in but It might encourage people to save for their later years, or for an emergency, and Thats a good thing.
I think we would need some control over incentives on all both sides of the equation... at times, we need folks to spend and at others we need them to save. Even then, the ability to move taxes might be too slow, and it's wrapped up in a lot of politics. Right now, I would think we need people who HAVE money to spend it !
By the way, I have a long-held sneaking suspicion that ONE reason we encourage folks to live day-to-day on debt instruments is because it provides a direct lever on savings/spending by the Federal Reserve. Just a suspicion, no facts.
Overall, Americans ARE saving more. The Federal Reserve does detailed studies on selected households every few years. One of the most interesting results in the last visit versus the one in 2008 is that ALL participants, when asked how much money they thing they should have for emergencies, report a figure 200% higher than before! Combine this with the phenomenal rate at which households are retiring debt, and you can see part of the problem... people have suddenly become financially conservative. Maybe all those Boomers are FINALLY starting to think about retirement ? Not sure.
Anybody, employee or no, can buy shares of the company which employs them, assuming it is a publicly traded company. And most companies these days DO encourage their employees to own stock in the company, and a good portion of them incorporate it already into their compensation structure. So this would be sort of requiring something that many companies already do anyway.
And it is a double edged sword. Remember Enron was big on this, all the Enron employees who showed up to padlocked doors went home and found their 401(k)s and employee stock purchase plans decimated.
In fact, most financial planners will warn you not to invest too heavily in your own company's stock - putting all your eggs in one basket.
Employees as well as anyone else can already buy stock in their company. Unless you're talking about smaller companies, but then you're only increasing the size of Wall St, which is what I thought everyone was protesting.
Perhaps you're suggesting why it's bad to overgeneralize regarding Wall Street. A corporation is, at it's root, nothing but an investment vehicle whereby a bunch of small investors can pool their resources to fund a grand effort that is otherwise beyond any individual's reach.
In the nirvana we all imagine, we would need some way to pull together enough money to build the worker's factory. We could either find a rich man (uggh), borrw from bankers (uggh), or pool our resources to get the money needed. We could then apportion votes regarding the leader and future direction of our little company to each worker according to his contribution. In doing this, we have a little corporation.
One day, perhaps we workers collectively decide we need more money than we have in-hand to fund a large expansion that will provide a lot more jobs and improve the conditions of our community. What are we to do? Go to the rich or the bankers? Perhaps we could instead make an appeal to our community and invite others to buy shares in our little operation. In doing so, we have created a stock market.
The vast majority of stock in public corporations is held by "little people," not the "banksters" or the 1%. Perhaps the basic premise of a stock market insofar as it is the "peoples way" to participate in the formation, operation, and profits of companies is not in and of itself such a bad idea. Maybe with minor reform to remove the speculative aspects, it actually provides benefit.
Just thinking aloud here.
Owning stock is a part ownership. It depends how large the corporation is..
Employees owning part of the business is successful for middle size corporations. It's a proven process and successfully.
Imagine if the largest companies in the US were employee owned and all those lobbiest that manipulate the officials were gone.Win or lose that would put america back in the rite direction
really who can compete with giants such as wal-mart with over one million people on the payroll and stores at every possible location all over the globe. Why should one family or small rich group enjoy the fruits of thier employees labor without those hard working dedicated people coming in day in and day out there wouldnt be a company in the first place.The concept is that it's our money in the first place and we want it back
Don't forget that a good part of the reason corporations are so profitable these days is because of capital investments in computers and robots using money from investors hoping for a return. The workers have little to do with the productivity created by capital investment, but capital is ATTRACTED to the company partial due to the successful efforts of the company. The only way I can think of to get workers a share of the profits related to capital investment is for them to own stock. This way, they participate in the success of their company NO MATTER how or why it occurred.
I am 100% behind setting up an ESOP model for most if not all corporations large enough to go public, and in fact I would set up a distinction like this: Type I stock would entitle the holder both to voting rights in how the company is run and to dividends based on how well the company does or does not do. It would be issued to employees upon hiring, be non-transferable, and be cashed out on retirement. This would be issued on percentage of the company's net worth that would float a bit but stay pretty close to 20 percent. The other 80 percent would be issued in Type II stock, which would entitle the holder to dividends but NOT to any voice in how the company is or is not run. Type II stock would be freely tradeable on exchanges the way all current stock is now.
I'm not an expert, and they SHOULD be consulted, but this makes sense to my small mind.
intergrating all the top multibillion dollar companies provides leverage on the political system.we're talking the big boys here the ones who are monopolizing thier sector anyway.
Critical comment: Financial investments such as stock ownership are a big part of the problem. The idea that you can make money on money, in this case the fluctuating price of a commodity, is largely what created the current situation. We need an economy that values and rewards actual work including labor, services and tangible product production. Participation in the schemes that have brought us to ruin are counterproductive.
I suggest opting out of stocks as investments (assuming of course that you own some and have any control over them).
In the nirvana we all imagine, we would need some way to pull together enough money to build the worker's factory. We could either find a rich man (uggh), borrw from bankers (uggh), or pool our resources to get the money needed. We could then apportion votes regarding the leader and future direction of our little company to each worker according to his contribution. In doing this, we have a little corporation.
One day, perhaps we workers collectively decide we need more money than we have in-hand to fund a large expansion that will provide a lot more jobs and improve the conditions of our community. What are we to do? Go to the rich or the bankers? Perhaps we could instead make an appeal to our community and invite others to buy shares in our little operation. In doing so, we have created a stock market.
The vast majority of stock in public corporations is held by "little people," not the "banksters" or the 1%. Perhaps the basic premise of a stock market insofar as it is the "peoples way" to participate in the formation, operation, and profits of companies is not in and of itself such a bad idea. Maybe with minor reform to remove the speculative aspects, it actually provides benefit.
Just thinking aloud here.
voting shares
There are companies that are owned by the employees. Some are successful, some are not. It's a very good deal when the company succeeds. Forcing all companies to ESOP would eliminate this as a competitive advantage, and would probably result in just as many or more employees getting stiffed by increasing the incentive to game the resulting system.
How to remove corporate greed thru social financial shift
Once you have say..50% of the public signed on to the cause you can now organize on a specified date for a execution of the plan. The plan consist of bankrupting a company by pulling stocks,refusal to work,withholding pay from bills and from not buying the chosen companies products. For example let's say a multibillion dollar company all of a sudden looses close to half the workers in it's factory while simultaneously a major sell off of it's stock was occurring at wall street. The stock would plummet and the media would be quick to cover the unfolding developments.then as if the shock of a diminished workforce and a stock freefall wasn't enough the payment of half the goods on the books would remain unpaid along with the half empty stores filled with the talk of a giant who had fallen by the sheer will of the people The doomed company goes bankrupt within a very short amount of time and the workers start up a co-op an Employee owned company under new management with the proceeds and increase profit benefitting those that work there and the distribution of the wealth is filtered thru those of us in the community. We can do this to all the multibillion dollar companies and essentially get the money back. It was our money in the first place and it can be done. The benefits of such a hostile takeover of a major corporation are two fold you redistribute the money to the people and you eliminate a sponsor of political corruption.No corporations translates to no lobbyist and crooked deals behind close doors.Not only do you get the money back but in the end you get a political system that actually works for the people.screw getting a "cut" of the pie lets buy the bakery
Uhm.... I thought most companies who trade on the markets offer Employee Stock Ownership Programs. At a minimum, they usually offer 401k's. While this is not 'all outstanding stock's', how could you do that? Do you expect the companies to stop selling their stocks on the open market and move it all over to the employee? While you don't have to go 100%, even 50% could stifle growth.
Usually, employees can elect to purchase shares of company stock (separate from what they may receive in compensation), but these are generally "restricted" holdings, meaning they cannot be sold at just any time the employee feels like it. These are classified as such to limit the possibility of insider trading - if you are an active employee with a company you own shares in.
Usually these restrictions mean a day or so of delay after a major announcement or event (ratings upgrade/downgrade, Quarterly earnings announcements, etc).
Thanks!
Nope. All they have to do is GRANT employees some stock as part of their compensation package.
If you were to grant stocks to employees the overall value of stocks would decrease since there are more shares out there. This would take value away from existing stockholders. While I do agree we need to restructure our corporations in such a way that the employees have partial ownership to profits, this way will not work. It's just like when we experience inflation from money printing which devalues the dollar, the same would happen if we just gave away stocks.
Yes, returning some portion of control over the company to the workers would 'dilute' the stock, but at the same time, I believe it's pretty established that ESOP improve employee morale and productivity, so perhaps there are offsetting factors ?
I completely agree that productivity would definitely increase if people felt that they would at least get some return back for working harder to increase the company's profits. I'm not sure if they would offset each other, but maybe instead of giving people stocks, acquiring stocks could be incorporated in their wages. So instead of renting themselves to a company where they have absolutely no stake in, they are "spending" their labor for part ownership. I don't have all the answers either, but I do like the premise of part ownership in the business you work for.
I threw this idea out a couple of days ago. OWS did not want to hear it then, nor do they want to now as it actually makes sense and the non-leaders would not have anything to bitch about.
Make up your mind. There are many companies with stock sharing plans and I would wager not one of those employees are milling around in Zucottti park. We don't want people to participate in capitalism, we want them on the outside looking in. Think about it, people don't destroy what they own, they destroy what other people own.
Let's stay out of the stock business.