another way to describe the risk imbalance is: employees are not paid enough for the risks they take when they accept work.

i just spent five years working at a software startup which was repeatedly recapitalized by top tier VC firms, and nevertheless drove itself into a hole in the ground. shareholders were locked in until the whole operation could turn a profit or be sold at a profit. in the end they lost their entire investment. (i know; i was one of them.) but i was also paid a salary, so I don't feel too bad. (yes, i'd feel a lot less bad if my salary had been tripled.)

i'm not a big fan of the current system, but i bet most corporate employees would completely forget about the other risks if their salaries were instantly tripled. i mean, the system does have a method to compensate employees for risk. it just isn't fully using that method because we employees are, for whatever reasons, accepting lower levels of pay.

i have met a couple of people who were offered a job as "employee number xxx" at Microsoft but didn't take it because they wanted to live somewhere warm. in that context, even quadrupling their salary wouldn't have fairly compensated them for the risk they took by becoming a "member of technical staff" in the IT department at San Diego State University. how the hell could they have known what a high stakes gamble that was? (and why do they tell everyone about it?)

i’m not sure that tripling salaries would solve anything. as an individual, your salary is just one of the variables that goes into deciding whether a job makes sense or not. the type of work, location, coworkers, stock options, and other benefits are the other major factors.

but if a company decides the only risk that matters is the risk to shareholders, that has a strong influence on how you as an employee should be weighing the risks you are balancing.

i think individuals have a tendency to underestimate the degree of risk of losing their salary. it’s certainly not a risk that a shareholder is worried about.

and the original article wasn’t really talking about shareholders in a company that hasn’t gone public — there, the shareholders are pretty tied up in the future of the company. but in a public company, the shareholder risk is mitigated by the fact that they can generally get out before they’ve lost everything.