Today we are living a major social and economical crisis resulting mainly from a maintained iniquity between funds owners’ remuneration and workers remuneration…

From my opinion the company has a key role in the distribution of the added value resulting from the human activity and the earth resources using… Then a very significant reduction of the global iniquity can be expected by looking at the company running… and by changing some of the traditional company challenge.

After working on the topic, I suggest* a model for corporate management which, while continuing to offer the challenge of profit, would lead shareholders to take a different view of the level of wages paid out by the company and also give its wage earners a different view of the company’s profits. In other words, a model changing drastically the relationship between shareholders and wage earners… to introduce more cooperation between insiders and outsiders.

The suggested model is essentially based on a new way of remunerations calculation… The remuneration of workers would be now the sum of salaries plus a participation in results indexed to the dividends. Symmetrically, the remuneration of shareholders would be now the sum of dividends plus a fidelity bonus indexed to the salaries.

It follows that shareholders would no longer be solely identified with capital and workers no longer identified only with labour. Remuneration for either party would be hybrid. This change naturally provides new opportunities for the added value analysis and distribution.

The values attributed to growth indicators are also affected by this hybrid character of the remunerations. If the model is applied in its ideal form, the growth of the wage earners remuneration, the growth of the shareholders remuneration and the growth of the added value are equal…(If not, the result of the model tend to this equality). In any case, the occasion is thus provided for the company government to show the social growth as a positive result facing all of the partners!

This new system of remuneration has other properties. For example, no changing the company results, but using now the new model and respecting a basic equity between all the partners, we can demonstrate that the fixed charges decrease practically for all the companies (result of the introduction of a part of flexibility in all the remuneration)…to open up new perspectives for the employment!

We finish by pointing again that, thanks to the symmetry of the interest of each group of partners for more dividends on the one hand and a higher salary mass on the other, the door is effectively opened for easier negotiation and better cooperation… new exciting perspectives for all the company!

*The full text is available in french langage under the title “Pour plus de solidarité entre le capital et le travail ou de nouvelles chances pour l’emploi » (l’Harmattan Publisher - last version in 2009 -)
A long summary is available in English under the title “For a new distribution of risks and profits in the company or the presentation of a new model to regulate the companies” (l’Harmattan publisher)

Rémi Guillet, expert-partenaire CFO-news
guilletremi@yahoo.fr