Every company should be owned by its employees

Re:Every company should be owned by its employees by enoch_r on Thursday July 25, 2024 @09:11AM (#41068272)

Everyone is certainly interested in the long term health of the company. But exogenous shifts like technological change, trade, COVID, etc. might cause the company to go under - or maybe you're just outnumbered by people who make poor decisions.

If this happens, people who have worked at the company for 15 years and have most of their "retirement" in the form of ESOP shares will a) lose their jobs and b) lose most of their retirement savings. On the same day.

Libertarians sometimes fantasize about how if we didn't have the FDA, people would be incentivized to do their own research on food and drug safety. Sure, sometimes dumb people would get it wrong and kill themselves! But that's just the price we (well, they) need to pay for everyone to have good incentives. This seems like the same category.

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Re:Every company should be owned by its employees by mkbosmans on Thursday July 25, 2024 @11:28AM (#41069813)

Nothing requires an ESOP to skip on a separate retirement fund for employees and expect them to retire from their share of the investment.

In the contrary, I expect the owners of an ESOP are very much in favor of having a well managed separate employee retirement fund. More so than in a publicly owned company.

But of course you are right that the risks factors of losing your income and losing your investment are pretty much 100% correlated for an ESOP. Some investment diversification is always a good idea.

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