I am attending a Swedish innovation conference and spoke today with an entrepreneur working with textile. She did not perceive lack of stock compensation for employees as a limiting factor in her branch. The chief of the textile-centric incubator that she belongs to had never heard that complaint either.
However, this is a complaint one hears all too often from Spotify employees. And before them, Skype.
This bloomberg article ( behind a paywall ) gives the following examples
“A few years ago the Dutch capped bonuses for bankers, money managers, and other financial professionals at 20% of their base salaries. Entrepreneurs must navigate onerous tax rates and restrictions that often make equity sharing and options more trouble than they’re worth. When employees in Germany exercise options, they have to pay income tax on the difference between the fair market value and the strike price, and that rate runs from 14% to 47.5%. They also have to pay a 25% capital-gains tax on additional profits when they sell their shares.
In contrast, American employees typically pay a 0% to 20% rate on capital gains when options are redeemed, though they may have to pay additional levies when they’re exercised, depending on the timing and the type of equity incentive program. Germany and 14 other countries, including Sweden and the Netherlands, are more burdensome than the U.S. regarding options, according to a 2018 study by Index Ventures, a venture capital firm in London and Silicon Valley. ”
In my opinion, if Sweden wants someone to risk career safety and forego salary compensation upfront, they should be compensated for their risk in the case they create wealth. Sweden’s economic model is based on continuous growth. Does mean you have to give the actual growers motivation to risk.
Or are talented engineers dreaming of leaving Europe because they don’t get no respect, compared to their American peers?
Interesting discussion on hacker news
https://news.ycombinator.com/item?id=21134956
“Being an excellent engineer, the backbone of all good tech companies, is rarely recognized, poorly compensated, and engenders much less social status than if you were on the US west coast. Ironically, even though there are many highly talented engineers in Europe, European executives and investors frequently hold American engineers working in Europe in much higher regard and treat them differently than engineers from their own countries. I’ve seen it many times.
This is not an environment that incentivizes the world-class native engineering talent that exists in Europe to perform up to their abilities in a high-risk startup. Good engineers correctly view themselves as being undervalued, so there is no point in taking the risk. Nothing will change until Europe places more value — economic, social, and cultural — on being an exceptional engineer instead of treating them as a modern day factory worker subservient to the managerial class. This is not something you can easily change with government initiatives. “
Autonomous 