[dogma1138]

This is a common mistake, actual functioning cooperatives operate like any other enterprise with an set executive structure a CEO and a board of directors. The big difference is the ownership model so shareholder meetings are basically employee meetings so a successful cooperative simply runs like any other business just one where the employees are treated as the shareholders they are when it comes to decision making the bad ones are the ones trying to run like a commune and reach a consensus on everything.

[spuz]

What is the difference between a cooperative like you describe and a startup where employees are given shares?

[jlokier]

Startups that give out shares are rare. Startups tend to give options. Options take years to accumulate, and don't give any significant rights by themselves, such as voting or profit share. Employees can typically only afford to exercise options at key company financing events, because they have to sell many of the resulting shares to cover the cost of exercising and cost of tax.

Most startup employee recipients of options never get to exercise them for various reasons, often unable to due to cash flow or restrictive timing reasons, or because they aren't profitable (the employee would take a large financial loss). Many of those who do exercise the options get their shares after leaving the company or they're about to leave. And finally, of the small subset of employees who have shares as a result of exercising while still employed, the number of shares they have is a tiny percentage even in aggregate, so they have effectively no influence at shareholder meetings, if they choose to attend, and if their shares have voting rights which they don't always have.

In co-operatives, the majority of shares as well as voting rights are usually held by a high proportion of employees, so that's a completely different dynamic. As well as voting rights, it means any profit distributed as a dividend tends to go to employees as well.

[dogma1138]

Outside of startups that might not amount to anything never it’s a pretty poor habit to sell shares to cover the cost of tax. It’s nearly always more beneficial to finance the tax due through other means including taking a loan even today after the base interest increase.

But the rest is more or less correct even when the options mature and you can exercise them you usually do not get voting rights it’s nearly always restricted shares.

Also note that unlike cooperatives there is also quite often restrictions on how much stock you can own as a regular employee in a public or even private company the employee shares in cooperatives usually have a different legal framework than regular company shares.

One of the key differences is quite often as someone already mentioned is that shares in cooperative grant a single voting right to a shareholder rather than per share.

You can also have some more complex tiered holding structures such as where all the employee held company shares are issued to a single entity that represents the employee shareholding collective and that entity then grants a single share to each employee, alternatively other models than direct shareholding can be used such as trusts where the trust holds the company shares and the trustees get voting rights.

[majewsky]

In a startup, employees usually don't really have much influence even if they have shares, because each successive funding round dilutes the existing shares.

Also, there's some significant differences in how shares work between cooperatives and corporations (at least in Germany, where I live). In a corporation, you get one vote per share, and shares can be freely traded once given out. In a cooperative, you only one vote per shareholder, no matter how many shares you hold, and shares cannot be traded. You can invest into the cooperative to get shares, and you can return your shares to get your capital back, but the cooperative gets final say in who gets to hold shares.

[felurx]

Which "Rechtsform" would a cooperative be in Germany?

[joker99]

Genossenschaft

[sangnoir]

Employees are not second-class (or third-class) on share preference or dilution.

[solardev]

A coop is one person one vote.

A employee stockholder plan is one dollar one vote.

[bluesign]

So it is little worse than unions done good.

[Shoue]

That's an odd critique considering coops exist to solve the friction between unions and businesses by building the democratic control into the business itself, avoiding the need for a union.

Especially when you consider all the union busting tactics used by leadership at traditional businesses – how are you even supposed to form a union when they won't let you? Coops come at that from a different angle: you get democratic control, straight up. Don't like your leadership if you choose to structure the business that way? You can actually vote them out of their role.

[pmoriarty]

"Especially when you consider all the union busting tactics used by leadership at traditional businesses – how are you even supposed to form a union when they won't let you?"

Even when you manage to form a union, companies have ways of screwing you over.

Case in point was the recent successful unionization of a Starbucks location in Seattle you might have heard about on the news. Starbucks' reaction? They just closed that location.[1]

[1] - https://www.cnn.com/2022/11/22/business/starbucks-closure-un...

[sokoloff]

https://www.nlrb.gov/about-nlrb/what-we-do/conduct-elections

If you have broad support from the employee base, “they” can’t block a union certification election. If you’re having trouble forming a union, you’re probably struggling at the “get employees to want your union” step in the process.

[sofixa]

You should let Amazon, Starbucks, Walmart and similar know this. Their union busting tactics are widely documented (including shutting down locations starting to form a union).

[sokoloff]

They do know this. Many of their tactics are specifically directed at “make the employees not want the union”. Some of those tactics are under-handed, even despicable, but it’s safe to say that they know this and act in accordance.

[sofixa]

Firing everyone in a store in the process of unionizing isn't "make employees not want the union", it's retaliating against those that do and instilling fear in the rest.

[joxel]

So I’m guessing your head has been in the sand for the last decade while Starbucks and Amazon shut down places that attempt to unionize?

[bluesign]

Normally with union done right, you would have voice in management. Problem is all you see is non-working unions ( union busting etc also from sibling comments)

Thats why I commented union done good from the beginning.

[Ericson2314]

There are coops where a union acts as a VC of sorts. Unions are supposed to take over bussinesses and turn them into Coops. Workplace democracy is always the end goal, decent compensation is just a step along that route and arguably even at times a distraction.