In my previous post on Strategy and Corporate Governance for Small Business, I talked about aligning Shareholder goals with the running of the company. This applies to employee share ownership as well.
When offering employees ownership you are making them shareholders.
Companies sometimes do this in an attempt to retain employees as the primary motive. However, there are issues:
- Shares in a privately held company are not the same as a cash bonus. They are a paper benefit until they can be sold.
- The goals of employee shareholders need to be in alignment with majority shareholders. If they are not then it might […]