[thfuran]

If someone has a company doing an IPO, it’s extremely unlikely that the company was so small that one person did all the work. Why is it a given that one person should retain nearly all of the proceeds of the sale? To answer your question, that person is funneling funds from investors who are expecting returns derived from the labor provided by the undercompensated employees.

[azan_]

Ok, let's follow that logic. If IPO makes CEO much, much richer but generally also makes company and workers better off (but to smaller degree), does IPO make workers more undercompensated? Nobody lost anything for the CEO to gain. Also is "funneling" (that's an interesting choice of word) investors money into company stock a bad thing? Why would it be? I'd say it's a very, very good thing and it's in almost always 100% voluntary to buy stocks.

[thfuran]

>If IPO makes CEO much, much richer but generally also makes company and workers better off (but to smaller degree), does IPO make workers more undercompensated?

Yes, obviously. The bulk of work of the company is done by the workers. That is to say, most of the value is generated by the labor of the workers. If a commensurate share of the profit is not returned to the employees, they’ve clearly been undercompensated.

[azan_]

How is it obvious? In that scenario, companies should avoid IPO even though it makes situation of workers better?

[thfuran]

If you spend a month working all day every day on something and then you get paid 5¢, was that fair compensation simply because you're materially better off for having received it? BTW, I made $10,000 reselling your labor.

[runtime_terror]

Where are you getting this idea to at IPOing makes workers situations better?! Citation needed!

Most of the time these public companies do regular mass layoffs just to make their investors happy to do short term stock price manipulation so they can get a bump in their executive salaries. This happens all the time

Sure doesn't seem like an IPO makes anyone but the tops lives easier in my book...

[Marsymars]

Presumably there's some level of progressive taxation where the top rate is between 0% and 100% that most helps the median person.

The problem is that people with power are largely incentivized to push this rate lower than the optimal-for-the-median-person rate in order to benefit the wealthy at the expense of everyone else.