Happy People are More Productive

Did We Need Someone to Tell Us That Employees Don’t Care About Shareholder Profits?

I’m glad Panera Founder Ron Shaich said it, but I can’t help but wonder how disconnected the C-Level folks must be to need to be told this:

“No employee ever wakes up and says, ‘I’m so excited. I made another penny a share today for Panera’s shareholders,'” Shaich told Business Insider in an interview. “Nobody cares. You don’t care whether your CEO comes or goes.”

It really shouldn’t be newsworthy that someone thinks employees don’t care about shareholders, and for those of us in the legal space, it should also not come as a shock that your staff doesn’t care about “profits per partner.” It’s irrelevant. I spent years assuming that if profits and shareholder value were up, that would result in better pay and raises for everyone. That was naïve. We were likely talking about the difference between a 2% and a 3% raise. It’s not nothing but not worth all the long hours and life-wrecking commitments we are often asked to give to work.

Consider the math: an extra 1% on a $100,000 salary is $1,000 spread over the year, minus taxes. Were all those lost evenings, weekends, and late-night interruptions to your family worth those extra few hundred dollars?

You can’t expect your employees to care about the share price when they know that increasing the share price results in bonuses going to the CEO, who is likely making 344 times what they do.

If you dig into that EPI data, you’ll find this tidbit, which again, when you read this, tell me why typical workers would care at all about profits and productivity when they get nothing in return?

On the one hand, there has been very little growth in the compensation of a typical worker since the late 1970s. It has grown just 15.3% over the 44 years from 1978 to 2022, despite a corresponding growth of net economywide productivity of 64.6% (EPI 2022). The 1,437% growth in realized CEO compensation from 1978 (there are no data for 1979) to 2021 far exceeded the growth in productivity, profits, or stock market values in that period.

If you want to hang on to your talent, you should understand what motivates them. Shaich thinks having a therapist involved in your employee relations would help understand where people are coming from and what motivates them. It shouldn’t take that to understand one essential truth. The further away you get from ownership and equity, the less that talent will care about profits.

Especially when even profitable companies will lay off thousands of people anytime they feel like it.

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