The exact numbers don't matter, the point is the same: with only a few exceptions, no employee contributes the average per-employee output to the company. If they did, you could pick up your laptop and go to any other company and start earning them $N/year for whatever value of N you prefer.
As for your second point, that's a straw men argument that assumed companies are omnipotent. The employees who drive the bottom line cannot truly prove this to a new employer so their value is diluted by those who don't. The general solution is to go into management (more visibility and no cap on comp), or to create (or join) your own startup (which doesn't have a rigid interview process and you can use "references"). Which many do given how many startups exist in the Bay Area. Companies also may give out large bonuses in RSUs to keep those employees.
Correct. But with very few exceptions I don't believe that any one person contributes $500m in value over 5 years.
> Second of all, having been in tech individual employees do drive projects that wouldn't have happened without them for a decent amount of time. In aggregate that moves the bottom line a ton
In aggregate, yes. But it's the systems that aggregate the contributions of the employees and turn them into profits.
> As for your second point, that's a straw men argument that assumed companies are omnipotent. The employees who drive the bottom line cannot truly prove this to a new employer so their value is diluted by those who don't.
I'm assuming you mean omniscient, and no, I'm not assuming omniscience because I'm not actually talking about a company's ability to attribute value creation, I'm talking about the employee's ability to attribute it. Any random Google employee who thinks that they contributed $500m over 5 years can't just pick up their laptop and go work for a startup and expect that startup to make $500m over the next 5 years. It's not happening. The only way that their project made $500m was as a project embedded in the enormous money-making system that is Google, and absent that system they don't make that much money for the company.
> no employee contributes the average per-employee output to the company
> Sub in $1.5m/year
Are you standing by that or is your new assertion now that no employee contributes $500m but that many do contribute $1.5m/year?
The back and forth is getting a bit confusing so trying to make sure we're on the same page.
edit: You do realize that a non-trivial number of employees including ICs are paid more than $1.5m/year. So even Google disagree with your assertion.
edit: There's also a material difference between no one, a few, many and the majority. You made a specific claim that no employee provides more then $1.5m of value. I disproved that with Google's own comp. Not my problem you're butt hurt about being called out for being wrong with quotes you said yourself.
Firing an employee most likely won't reduce the bottom line.
But every employee is a chance to increase it by creating a new project/product etc.
So firing would reduce the probability of a new idea generating an increase to the bottom line.
I see where you're coming from but I think you're missing the fact that large projects have lots of bullshit work that requires high skill but is technically lower value. There is a lower bound to what people will accept, as people with marginally better skills get lucky enough to get highly-visible and much more highly compensated roles. The pay stratification you wish for is already built in, and the average just reflects the fact that these companies DO make enough money to have competitive pay rates.
Would Google's bottom line drop by ($500m - $devSalary) if that developer were to quit this year?
Of course not! In most cases Google's bottom line wouldn't even notice if Google failed to replace them, but if their job was really important and they did have to replace them, they still wouldn't notice that it was someone else and not that one dev.
This suggests that the dev isn't actually what's making Google $500m/employee, it's the systems that make up Google that are making Google $500m/employee. Any one employee doesn't actually contribute nearly that much to the functioning of the system, otherwise every company would make $500m per developer.
So the only sense in which Google "should" pay more isn't a practical one (clearly they pay enough to fill their roles) or a justice one (they're not stealing $500m in value from each employee if their bottom wouldn't much notice any single employee's absence)—it's some sort of argument about an ethereal sense of fairness that says that by merely participating in a system you're entitled to the average per-person output of that system. Which is definitely an ethic, but it's not one I can get behind.