[milfot]

The thing is, you are actually assuming the risk that your work is not profitable.. if the work is your personal work, your employer may sack you or withhold a raise. if the work is your team's then you share the risk, unless your team is the only team and then your employer goes out of business.

It is (usually) an exploitative relationship, most just don't know it. The fact that this arrangement is the norm speaks only of the power differential and nothing of fairness. Could you imagine what would happen to management if employees got a fair share of the work they produced.. for that matter, how much of Don's profits came from his hand and how much from the advertisers and how much from Disney's distribution network? Why are advertisers paid so much and box packers paid so little?

The fact that so many of us accept this system is because we don't have the power to demand profits (or we don't know any better) and we need to eat. We just tell ourselves that we prefer to earn a little less so we don't have to worry about risk. It makes it easier to sleep at night.

[crazygringo]

Not really. Once you get into understanding how investors, investment and VC, etc. work, the mathematics of risk and payoff become very clear. If you, as an investor, are throwing millions of dollars into a product that requires millions of dollars, and has only a 10% chance of success, then you a commensurate share of the payoff as well, which may even be most of it.

At my last job, I got to choose the balance between salary and equity I wanted -- and I really had to calculate if I wanted to earn a little less (or a lot less) in exchange for a greater share of future profits. Or to earn a little more (or a lot more) in exchange for giving that up. And having gained quite a bit of knowledge from the investor side of things, at least here in the tech industry in NYC, I don't think it's accurate at all to say it's "usually an exploitative relationship". At least, as long as employees bother to figure out how it all works.

Of course your employer can sack you or withold a raise. But of course you can leave for another company, or tell them you're leaving if they don't give you a raise.

But you've got to have enough skill to be of value, and enough negotiating skill not to be taken advantage of, as well. Just like a company has to have enough skill not to hire not to be taken advantage of by its employees -- the employees who don't contribute, the employees who spend more time playing politics, etc.

[milfot]

Absolutely! I agree with your whole post. I was meaning 'usually' in the sense of usual employer / employee relationships.

Most employee's do not know, nor know how to find out, their net worth to the company. They definitely do not get offered equity.

Most companies go to some lengths to obfuscate the earnings from their employees and contractually forbid their employees from speaking about their own earnings. Most employees, even if armed with such knowledge, do not have the power to demand their worth as there are a large queue of eager replacements for their position.

My point was essentially, if someone thinks they are trading off rewards / equity / ip royalties etc for job security, they probably do not have a good understanding of their relationship or value to their employer.

Don seems to have known full well what he was trading off, and as he explained when he drew the line and exercised his right to negotiate "they simply refused to actually ask permission". They refused to negotiate as they were so used to being in a position of power.

"But you've got to have enough skill to be of value" I would say, you have to have enough skill to be of 'great' value.. then you have the power to negotiate or go elsewhere. If you do.. more power to you!

[Evbn]

You don't need great value, you just need two prospective buyers to compete.