August 18, 2023
The New York Times recently published an article discussing the regulations surrounding private companies’ fundraising for growth featuring a study from Raviv Murciano-Goroff, Assistant Professor of Strategy and Innovation.
Although many believe that private companies’ regulations hinder innovation and jobs, there are strong arguments supporting why employees suffer because they lack knowledge about stock options. Employers often withhold financial information from their employees, structuring their system to benefit top-management and outside investors.
“Even more disturbing is respondents’ unawareness of their own limitations: Respondents were 67.3 percent more likely to be wrong than right on equity compensation questions, yet they were unaware of their own lack of knowledge,” Raviv’s study found.
With companies remaining private, the shares employees get aren’t sellable once they leave a company, which continues to be a growing problem.