In terms of income earned, it's not enormously different from other jobs, especially those that pay similarly and have similar levels of responsibility. In lots of sectors you're paid in a way that depends on your employer's performance (this is trivially true everywhere in the sense that if the employer goes bankrupt, you lose your job). In some cases it's convenient to tie pay to performance via equity grants, but that's just accounting -- giving you equity that you can sell (or sell on a later date) is no different from giving you money.Anonymous User wrote: ↑Tue Sep 20, 2022 8:40 amI'm aware of the why, and I'm not necessarily saying it should change, just saying that it's weird when you think about it. Because it is. Especially if you have to buy in as if it's an actual partnership.Anonymous User wrote: ↑Mon Sep 19, 2022 3:12 pmI don't see how this is so strange. There are plenty of non-transferable "shares" in the world (especially for closely held entities or startups). And partners do have to buy in - you just need to be elected to have that opportunity. Typically, that buy-in is around a half mil, but often firms give you an interest free loan. Just like in regular old businesses with stock incentives, you earn more equity (shares) by doing work for the firm. This is normal.Anonymous User wrote: ↑Mon Sep 19, 2022 1:46 pmIt's kinda weird when you think about it that while you're a "partner" with a "share", you can't actually transfer it and when you retire it just evaporates. And new "partners" become partners by virtue of promotion not by actually partnering.
Anyway, you should already be aware that firms literally cannot make their shares transferable - at least to non-lawyers - by virtue of our rules of professional conduct.
The startup comparison is not relevant, because those shares are real in the event of an IPO etc.
The buy-in is purely a way of raising working capital. All companies need working capital, and it typically does not come in the form of equity but of debt, like here.
equity financing is just one form among many, and there's no fundamental reason why it has to exist or is even the obviously natural way of setting up a firm