Marissa Mayer tells us a lot about why Americans are so angry, and why anti-establishment fury has become the biggest single force in American politics today.
Mayer is CEO of Yahoo. Yahoo’s stock lost about a third of its value last year, as the company went from making $7.5 billion in 2014 to losing $4.4 billion in 2015. Yet Mayer raked in $36 million in compensation.
It’s another example of no-lose socialism for the rich — winning big regardless of what you do.
Why do Yahoo’s shareholders put up with it? Mostly because they don’t know about it.
Most of their shares are held by big pension funds, mutual funds, and insurance funds whose managers don’t want to rock the boat because they skim the cream regardless of what happens to Yahoo.
In other words, more no-lose socialism for the rich.
I don’t want to pick on Ms. Mayer or the managers of the funds that invest in Yahoo. They’re typical of the no-lose system in which America’s corporate and financial elite now operate.
But the rest of America works in a different system.
Theirs is cutthroat hyper-capitalism — in which wages are shrinking, median household income continues to drop, workers are fired without warning, two-thirds are living paycheck to paycheck, and employees are being classified as “independent contractors” without any labor protections at all.
Why is there no-lose socialism for the rich and cutthroat hyper-capitalism for everyone else?
Because the rules of the game — including labor laws, pension laws, corporate laws, and tax laws — have been crafted by those at the top, and the lawyers and lobbyists who work for them.
Does that mean we have to await Bernie Sanders’s “political revolution” (or, perish the thought, Donald Trump’s authoritarian populism) before any of this is likely to change?
Before we go to the barricades, you should know about another CEO named Hamdi Ulukaya, who’s developing a third model — neither no-lose socialism for the rich nor hyper-capitalism for everyone else.
Ulukaya is the Turkish-born founder and CEO of Chobani, the upstart Greek yogurt maker recently valued at as much as $5 billion.
Last Tuesday Ulukaya announced he’s giving all his 2,000 full-time workers shares of stock worth up to 10 percent of the privately held company’s value when it’s sold or goes public, based on each employee’s tenure and role at the company.
If the company ends up being valued at $3 billion, for example, the average employee payout could be $150,000. Some long-tenured employees will get more than $1 million.
Ulukaya’s announcement raised eyebrows all over corporate America. Many are viewing it as an act of charity (Forbes Magazine calls it one of “the most selfless corporate acts of the year”).
In reality, Mr. Ulukaya’s decision is just good business. Employees who are partners become even more dedicated to increasing a company’s value.
Which is why research shows that employee-owned companies — even those with workers holding only a minority stake — tend to out-perform the competition.
Mr. Ulukaya just increased the odds that Chobani will be valued at more than $5 billion when it’s sold or its shares of stock are available to the public. Which will make him, as well as his employees, far wealthier.
As Ulukaya wrote to his workers, the award isn’t a gift but “a mutual promise to work together with a shared purpose and responsibility.”
A handful of other companies are inching their way in a similar direction.