This is about who holds the IP. Sometimes, depending on the employer and contract, an engineer will get to share in a patent created in the course of the job. Or might have incentives such as Employee Stock Ownership Plans (ESOPs) or options.
So it’s not true that the IT folks are exclusively paid salary. Many share in the risk as well as the returns of their firms.
Let’s unpack that.
Yes, there are ‘writers for hire’ in licenced tie-in fiction and comics. These authors get a flat advance BUT they still get royalties based on the number of books or comics sold. That is - base payment and then returns based on success if the product.
Film and television writers are compensated by residuals in addition to salary. The studio owns the IP but the creators have a stake. It’s a risk and return sharing relationship with the studio. That’s the standard arrangement.
How is this different from an ESOP or options as an incentive remuneration?
How would an IT employee feel if a firm licenced the IP and then excluded its value from the calculation of ESOPs and options due, or the dividends on the nonvoting shares issued to employees?
“Works-for-hire” is exactly the key point here.
This is about who holds the IP. Sometimes, depending on the employer and contract, an engineer will get to share in a patent created in the course of the job. Or might have incentives such as Employee Stock Ownership Plans (ESOPs) or options.
So it’s not true that the IT folks are exclusively paid salary. Many share in the risk as well as the returns of their firms.
Let’s unpack that.
Yes, there are ‘writers for hire’ in licenced tie-in fiction and comics. These authors get a flat advance BUT they still get royalties based on the number of books or comics sold. That is - base payment and then returns based on success if the product.
Film and television writers are compensated by residuals in addition to salary. The studio owns the IP but the creators have a stake. It’s a risk and return sharing relationship with the studio. That’s the standard arrangement.
How is this different from an ESOP or options as an incentive remuneration?
How would an IT employee feel if a firm licenced the IP and then excluded its value from the calculation of ESOPs and options due, or the dividends on the nonvoting shares issued to employees?