I would like to get your opinion about employee owned companies.
I do prefer working for companies that are employee owned. This means that employees can invest in the company and that no shares are owned by external investors. The financial incentive is often the stable dividend rather than making profits due to risen share price.
For me, working at these type of companies is still way better than working for a publicly traded company where profit often feels like the only purpose (to please the share holders). However, I got a bit reluctant to invest in the employee owned company as a employee because I find the system a bit unfair:
- I find it a capitalistic implementation where the more you are willing (or able) to invest, the larger your cut of the profit. Everybody worked just as hard for that profit so why should you be able to get more if you got more shares.
- To get a management position, you often have to buy a significant amount of shares "as incentive to do your work as a manager I was always told". Of course, they have more responsibility but they already get a higher salary for that. Why also get a bigger part of the profit?
- On the management part, if there is also a voting system linked to the amount of shares you have, it also means that the management has a significant (majority?) saying in things. Legally the company is owned by the employees but not when it comes to decision making ( if employees are consulted via their shares).
What are your opinions on this and would you participate? Of course, not participating will not have consequences for the system because others will just buy those shares, but by participating you show support for an, in my eyes, unfair system.
To me it sounds like you might be describing more of (in the US context) a company with an Employee Stock Ownership Plan (ESOP) rather than say, a worker cooperative? (which can both be considered employee-owned but with very different contexts)
There is a wide range of possible structures/bylaws/statues for employee ownership that depends on the local regulations as well as the discretion of the employees with voting rights. For example, worker co-ops in France (SCOPs) can allow for external investors (capped to a certain % of equity, no voting rights), a voting system where one worker = one vote (independent of ownership %), require a fixed % of profit to be reinvested to the company's reserves before any profit sharing, etc.
I also would prefer to work at an employee-owned enterprise but to me it boils down to the culture of the people working there, independent of the chosen legal form and/or that imposed by the state. The workers can decide to do things in a capitalistic way or not, the legal form and bylaws are there to help prevent major abuse but if people want to act in a rent-seeking way, they're gonna find a way to do it, IMO.
To add to this:
1 - There are lots of schemes/organization setups that claim to be co-ops, but really aren't.
2 - IMO, a true worker co-op has some kind of actual 'government-like' method of workers being able to actually influence long term strategic planning enacted by leadership, vote up or down various policies, etc.
IE, it functions as a representative democracy, to some meaningful extent... sort of like the union just literally is the company.
You list France's SCOPs as a model of that, I'll throw in Mondragon, which is, imo, much more truly representative of workers than just giving them a class of voting shares at the board level.
https://ebiltegia.mondragon.edu/xmlui/bitstream/handle/20.500.11984/5979/The%20Governance%20of%20Multistakeholder%20Cooperatives%20in%20Mondragon.pdf?sequence=1
Mondragon is probably the most well known and most studied example of something like this, at least in the West / Anglosphere-Adjacent.
This is an actual, successful, long lived, worker co-op, with what is basically its own version of a representative democracy for workers.
Yes, big fan of Mondragon here, though I've heard they've taken some criticism for outsourcing some of their processes to non-cooperatives with poorer working conditions (perhaps in Mexico, might be wrong). But that aside I'm a big fan and suggest to anyone not familiar to read up on them!
I had not heard that more recent bit of news, but either way yeah, a ... maybe surprising amount of academic research has been done on Mondragon, that one paper I linked is just one of many, serves as a great example for someone who wants to sit down and not only read theory, but also analysis of actual practice/praxis =P
Yes, I was describing an ESOP (didn´t know the English term). Interesting last paragraph. Another complicating fact is that if the company already has an ESOP, changing that system is really hard.
Yes agreed, ESOP-to-co-op requires a big shift in power away from the top and against the managerial class's interest, which is hard to pull off. More often I've seen the family-owned or conventional corporation get converted to ESOP or worker co-op when the family retires or the company is in financial difficulty. A French glass company just did the latter