Investive wages are remuneration that is not paid out to the employee as money. It is paid out in the form of a participation in the employing company or other companies.
Ideally, the employees will participate directly in the company, for example by means of employee shares in AGs or employee shares in GmbHs, and thus also benefit directly from a favorable development of the company.
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Investment wage and savings rate
The unspent income of households is referred to in economics as the “savings rate”, that is, the proportion of disposable income that is saved. Many scholars believe that saving too much harms the economy.
People are no longer investing their money in goods or services, as a result companies are selling less and reducing investments. This creates one Economic downturn.
The investment wage certainly has a slightly positive effect on the savings rate, since the amount of the investment wage cannot be spent. This means that financially weaker households are more likely to be forced to save more.
Investment Wages and Portfolio Theory
This examines the behavior on capital markets, such as stock exchanges or commodity exchanges. The American Harry M. Markowitz, who received the Nobel Prize for this in 1990, is considered to be the father of modern portfolio theory.
The aim is to create an optimal portfolio with the help of various measures, such as risk diversification (i.e. the targeted spread of risk through the purchase of a wide variety of independent securities). Aspects for this are the risk, the return and the liquidity.
According to Markowitz's theory, the investment wage can have a negative impact on the employee's income risk, as shares are also held in the company from which one receives his income.
Motivation and Demotivation
For employees, an investment wage is certainly motivating to the effect that they benefit directly from a positive development in their employing company and the associated increase in value.
This also intensifies the bond and identification with the company. Companies in turn have the advantage that Personnel costs can be saved and at the same time the equity ratio can be increased.
At the same time, an investment wage can also have a demotivating effect on the workforce, as they can see themselves as more dependent on the company.