Not that Mercedes is a good example, but is there a name for company philosophy of being employee/team-centric versus investor centric? E.g. all profits shared among employees instead of shareholders for example. I'd like to work for a company like that.
"co-op" or "co-operative" is what I see them being called in Canada. A few small "craft" industry in my town is structured like that, where every employee is an owner with a stake based on their position, tenure, etc, and all profits are distributed back out each quarter/year. They're also common in agriculture, where a feed mill will be owned by all the farmers that use its services and/or store their grain there.
Crazy thing is that moves like this also benefit shareholders, albeit indirectly. A company that employees want to work for because they know they'll benefit first means that more and more of the top job seekers will try to work there, which means (indirectly) that the company will have the best of the best employees. As an investor, I would think that in the long term, that's the best use of the company's money and the best path to long-term growth.
I don't want a quarterly, biannual, or annual dividend if that means that that excess capital will be re-invested into better employees (or keeping current top employees) who produce better products which can better position the company in the long run.
For a long time I naively thought that was the whole point of investment: long term sustainability and allocation of capital that allowed companies to best compete.
What you say is true: investing in employees attracts top talent. However, that's only one side of the equation. The other side of the equation is that such policies cost money. So in order to say that this policy is a "benefit to shareholders", you'd need to demonstrate that the benefits outweigh the cost, which is of course impossible to quantify. Over the last 5 years, stock in Mercedes Benz Group is down almost 25%, so I wouldn't say that, generally, Mercedes has been good to shareholders.
Is that the best way to evaluate it? It looks like they also offered about $3-4 dividend each year. The stock is down $5 over the last 5 years, but has also produced almost $15 worth of dividends[0].
For comparison, Ford might be up by about 25% (+$2-3) last 5 years, but it has only yielded a dividend of around $3.
>A company that employees want to work for because they know they'll benefit first means that more and more of the top job seekers will try to work there, which means (indirectly) that the company will have the best of the best employees. As an investor, I would think that in the long term, that's the best use of the company's money and the best path to long-term growth.
This does not work for businesses selling commodified products/services. Walmart can pay top dollar, but it is going to be disastrous because everyone will switch to buying from target/Kroger/Costco/Aldi/Amazon for cheaper.
The most radical are Co-Ops. The workers own the company. They're called Worker-Owners. Where management is a skill, not a rank. The problem with this model is three-fold:
• Outside investment can undermine the Co-Op's autonomy (many don't allow it)
• Raising capital is hard; usually you're bootstrapping (worker-owners must divert some of their income)
• Sometimes worker-owners get caught up in the democratic process of collective decision-making and get frustrated
On the other hand:
• A real Co-Op is real community. They exist to support the humans through work. You're all in this together. You can be "kicked out" by vote, but when you do, you give up your share and all that share money accumulating is yours.
• You are "The Man" in the worst and best way you can imagine If something is wrong with the company, you can change it.
• No more perverse mgmt incentives.
The biggest Co-Op is the Mondragon. They are very successful, too.
Welcome to socialism. This is what actual socialists want. Everyone to have ownership in the company and participate in it's success. Where the decisions are made democratically by workers.
In the modern world, you will see this in co-ops today.
