Sharing The Wealth - February 27, 2026

Should It Be A Meritocracy Or A Form Of Socialism ?

There’s a similarity between successful rock bands and successful tech companies. Apart from the common goal of creating and offering something that people get excited about, and want to spend money on, both successful rock bands and successful tech companies will generate huge financial rewards for those people that make things happen within those organizations.  

I make this connection because in my work career I was part of a semiconductor startup where the acquisition of the company made the founders and the CEO a crazy amount of money from their stock and options, but also the first 20 employees became millionaires on paper and would have realized that wealth in reality, if they sold their equity when they had the chance. The Founders and the Investors/Board wanted the early employees to share in the wealth that would be generated with a successful exit (an IPO or an acquisition) of the business. With this particular startup, all employees were granted stock options, and given two opportunities to purchase stock in the company. The ability to generate wealth from a successful exit was extended to the entire employee group. One could argue this was a form of socialism in that the philosophy of this startup was that everyone should participate to some degree in the potential wealth creation.

The opposite to this approach is to only reward those who took the most risk, and made the largest sacrifice. In the above example the founders took a reduced salary that was about 25% of their market worth, and that was only after the company attracted outside financing. Before the company attracted outside venture capital financing, some of the founders were paying company expenses from their own savings, while not drawing a salary. In this case, the sacrifice made by the founders was tremendous, and their ultimate financial reward was genuinely earned.

Having been a founder myself, I have personal experience in this area, and can attest to this being a very common sacrifice founders make to get their business ideas off the ground - this is what true founders do.

Because of this enormous initial sacrifice, the counter-position to the socialist approach described at the beginning of this article, being a position of meritocracy - ie only the founders and key executives/hires in the early days of a company should reap the rewards of a successful financial payday. The argument in favour of this approach is that this initial group took the initiative to start a business, made the largest sacrifice within the company, and presumably contributed the most to the ultimate success of the business venture.

In my decades of experience with startup companies, I have yet to see a venture where there isn’t at least some equity sharing with the employee group.  There has been lots of debate as to whether the employee group should hold a 10% ownership stake of the company, or whether it should be closer to 20%. But never have I come across a situation in the start-up world, where someone argues for zero ownership by the employee group.

It’s not like this in the music business. Several successful rock groups have not shared the wealth equally. Many of the Rolling Stones’ hits have songwriting credits awarded only to Mick Jagger and Keith Richards, even though Bill Wyman, Charlie Watts and any one of Brian Jones, Mick Taylor or Ronnie Woods also played and recorded the songs. Examples of mega-hits from The Rolling Stones, that were credited to Jagger-Richards only include, “(I Can’t Get No) Satisfaction”, “Paint It Black”, “Sympathy for the Devil”, “Jumpin’ Jack Flash”, “Gimme Shelter”, “Brown Sugar” and “Start Me Up”.

 It was a similar situation with The Beatles, where John Lennon and Paul McCartney are credited with several Beatles’ hits, despite George Harrison and Ringo Starr appearing on those songs.   Examples of mega-hits from The Beatles that were credited only to Lennon-McCartney include, “Hey Jude”, “Let It Be”, “Yesterday”, “A Hard Day’s Night”, “Help!”, “All You Need Is Love”, “Penny Lane” and “Come Together”.

Now Bill Wyman, Ronnie Woods, the estate of the late Charlie Watts, Ringo Starr, and the estate of the late George Harrison, are not hurting for money. In their careers, they too wrote hit songs for their bands that generated wealth for themselves.  Also, with both of these bands, and many others, the non-songwriting members of the band received income from touring, record sales, and other sources of revenue, such as merchandise sales.  

With these rock bands noted above, a meritocracy existed, where only the true songwriters were credited, and made serious money when a song they wrote was a huge hit. But there are also examples of songwriting credits being shared equally among all the band members, regardless of their actual contribution to the songwriting process, a form of socialism amongst the band members.

One example of this is the band Van Halen - their early producer, Ted Templeman, advised the band to share songwriting credits equally from the beginning, regardless of any member’s actual contribution to a given song. His logic was based on his experience producing The Doobie Brothers, where only one or two members received songwriting credits, and made real money from the songs. Those band members who didn’t make money from the songs would build up resentment at the disproportionate money being earned, and that would cause fractures within the band. Templeman advised Van Halen to share the wealth and avoid this future friction within the band. 

With the band Van Halen, everyone was happy in the early days; the band’s albums and tours were quite successful and there was lots of money to be made by the four band members, their management, and their record company. This arrangement went on for about 25-30 years, from the late 70s until the mid 2000s. Eventually the main creative force behind Van Halen, and the primary songwriter, Edward Van Halen, grew frustrated with the lack of songwriting contributions by the bass player, Michael Anthony. For decades, Van Halen split songwriting royalties equally four ways, and for years Edward contended that Michael Anthony contributed zero to Van Halen’s songs, but got paid anyway. The issue came to a head, when in order to participate in Van Halen’s 2004 reunion tour with singer Sammy Hagar, Michael Anthony was required to relinquish all of his songwriting rights to the prior Van Halen material, which included monster hit songs, like “Jump”, “Why Can’t This Be Love”, “Hot For Teacher” and “Right Now”, all of which had paid and continued to pay Anthony handsomely. Anthony agreed to relinquish his right to Van Halen’s past catalogue of music, because he really wanted to be part of the 2004 reunion tour. 

Another example of songwriting credits being shared equally is with Irish band, U2.  The four members: Bono, The Edge, Adam Clayton and Larry Mullen Jr. have shared songwriting credits equally since the band’s beginning, even though Bono typically writes most of the lyrics and The Edge develops much of the musical structure.  Unlike the band Van Halen, there are no stories of animosity building up amongst the members of U2 over a disproportionate contribution towards the songwriting effort.  The band U2 have generated some of the biggest hits in rock music history, including: “With or Without You”, “Sunday Bloody Sunday”, “Where the Streets Have No Name” and “Beautiful Day”. With the band U2, an equal sharing of the wealth, ie “socialism”, seems to have worked well, as they still record, release albums, and tour in support of their music, to this day, fifty years after their founding,  

In my work career, I have yet to come across a situation where someone was contributing so little that their equity ownership was clawed back, yet they continued to work in the company. Clawbacks do occur, but when this happens the person being clawed back usually exits the company. They are “exited” because they are not doing the job they were hired to do, not solely because their equity participation is too high. Make good hires and the company won’t have this problem.

The lesson here is that the approach to sharing the wealth works as long as those sharing the future money pie feel that everyone feeding themselves from that pie merits inclusion. In other words, socialism works if everyone contributes and carries their weight, which is really the underlying principle of meritocracy!