Since the post below on employee pay has generated quite a few comments, I wanted to address a few issues.
First of all, Gordon Smith picked up on my post and did a fantastic job explaining it in a more technical manner. Go check it out.
Now, I said in the original post that the analysis was simplistic. I don't intend to debate employee compensation. I am sure study after study shows that companies perform better when employees have "skin in the game," as they like to say. My goal was to demonstrate from a first hand perspective why an employee has no inherent "right" to the profits. There are plenty of people in this world who believe that workers have a right to the profits from their labor, and I wanted to show why this is incorrect.
Like most things in this world, what you have the "right" to do and what is in your best interest may be vastly different. I have a right to go get drunk every night since I am of legal drinking age, but that is not in my best interest. Likewise, it is in my best interest to share profits with employees, but that is my choice, and not a right that the employees have by virtue of their employment with me.
That post was my Carnival of the Capitalists submission, so it should be interesting to see what comments I may receive tomorrow, as it gets in front of a larger audience.
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