I was thinking about the structure of companies and work and was inspired to try to think the whole structure through from bottom to top.
For this thought exercise let's presume that we're talking about a company that is a for profit, private organization which provides goods and services that are important for life and comfort. Imagine something like food or important supplies along with the supply chain to get them to you.
Let's say this company owns $100 Million in actual assets and equipment, like buildings and food processing machinery and conveyor belts and the like which had to be purchased and have to be maintained.
The total expenditure of the company under normal current day circumstances is 20M a year and their total revenue under those same circumstances is 35M a year. They keep 15M in profit, half of which is reinvested in the company and half of which is distributed to C-suite bonuses.
This company employs 100 people, paying them each an average of $35,000 a year. This costs them 3.5M per year.
The company also pays 5M in building/facilities rent and upkeep per year, 10M in the cost of raw materials and transportation at each node in the supply chain, and 1.5M in insurances, legal services, and cloud services for management and logistics.
That's their entire business laid bare. (This is obviously simplified but we don't want to be here all day).
The most extreme change would be:
- The entire value that is profits currently being reinvested in the company and/or distributed to C-suite bonuses ought to be paid out as wages evenly to all employees. That's 15M per year divided across all 100 employees evenly, totalling 150k per year per employee in profit-sharing/bonuses on average.
I can imagine a sort of intermediate solution where:
- Of the entire quantity of profit, 5% is allowed to be distributed directly to C-suite, 10% is allowed to be reinvested in the company for upgrades and expansion of the business, and the remaining amount must by law be distributed evenly in the way described in 1.
And perhaps those percentages could be different. 20% reinvestment? Whatever.
What do folks think? How does this look if/when expanded across the entire economy and to larger companies? What would actually be the best way to do this?