Re:Seattle C.E.O. Who Promised $70,000 Salaries Wins Suit Fi...
by jasode on Monday July 11, 2016 @05:27PM
(#12074825)
>Nothing you said is entirely true.
It's interesting that you critique gp's comment for being binary, but you also make an absolutist comment yourself by stating "there's no reason" in:
>But there's no reason that a company paying out 100% of earnings to its employees can't outperform a company paying out less year-over-year. ... it may be better for the company that they leave when you look at things on a 5-year or longer timescale.
Instead of "no reasons", there are several reasons why a company paying out 100% of the profits to employees for 60 months will make it underperform another company that retains some of its earnings. A company can use its retained profits to spend on future expansion, speculative research & development, acquiring a company, etc. In many industry segments, if the company doesn't grow, it becomes irrelevant and dies. (At that point, the jobless employees get 100% of $0 profits.)
I can't think of any example in business history of a company that paid 100% profits to employees and therefore had $0 in retained earnings year-after-year ... outperform its competition.
It's interesting that you critique gp's comment for being binary, but you also make an absolutist comment yourself by stating "there's no reason" in:
>But there's no reason that a company paying out 100% of earnings to its employees can't outperform a company paying out less year-over-year. ... it may be better for the company that they leave when you look at things on a 5-year or longer timescale.
Instead of "no reasons", there are several reasons why a company paying out 100% of the profits to employees for 60 months will make it underperform another company that retains some of its earnings. A company can use its retained profits to spend on future expansion, speculative research & development, acquiring a company, etc. In many industry segments, if the company doesn't grow, it becomes irrelevant and dies. (At that point, the jobless employees get 100% of $0 profits.)
I can't think of any example in business history of a company that paid 100% profits to employees and therefore had $0 in retained earnings year-after-year ... outperform its competition.