As more details emerge in this massive scandal over employee non-poaching agreements, I can’t help but think of something I said to my brother a few years ago: If you don’t own a piece of the company you work for, you’re always getting screwed. It doesn’t matter if you’re a senior VP making 30 Million a year. You’re still getting a sucker’s share of the overall take.
What Jobs and Schmidt started here was absolutely atrocious. But it’s not even remotely surprising. Executives serve boards, boards serve shareholders, and shareholders always want maximum profits. That’s the inherent nature of any corporation. And if the goal is to maximize profits, you have to—by definition—minimize cost of goods sold. Which means keeping salaries as low as possible.
Like I said, if you don’t own it…
The funny thing is, though, and I may be extremely naive here, I suspect that for Jobs the motivation for this scheme in the beginning had less to do with keeping salaries low and more to do with a serious case of paranoia about being betrayed. I think when Bill Gates screwed him over so badly with Windows, Jobs became permanently scarred and was always looking for ways to prevent others from screwing him again. He wanted loyalty, and this scheme bought it for him. Later, as the practice spread through the industry, I imagine that keeping down wages became a stronger motivation for most other CEOs.
Again, probably naive of me, and still unforgivable regardless.
If you want to be sure something like this isn’t happening to you, the only choice you have is to run your own company. Otherwise, you are part of a system that is designed to pay you less than you’re worth.