just buy the stock, which keeps going up....this is effectively the same as a raise. Profit that would go to employees goes to shareholders. It's like a conservation law.
Because if the company goes under you lose your job, and your savings at the same time. In other words it consolidates risk rather than diversifies it.
But honestly the idea that you don't need a raise but rather invest and wait for a dividend return is bonkers. Those are to completely unrelated things.
By all means invest. There are lots of stocks to choose from. But that's completely orthogonal to your salary package.
You know, I never even considered that maybe I should have disclosed that to employers until right now...
Microsoft is not going under
There are some companies that are "unlikely to fail" in the sense that their stock price falls to zero. I would agree that Microsoft likely falls into that category.
But really large companies have "failed" in very short time. Usually as the result of some sort of illegal activity. WorldCom being the obvious example here. (A place where employees were "strongly encouraged" to buy their own stock.)
Bear Stearns, Lehman Brothers and others have also been "too big to fail" - yet failed.
The fact that these events are relatively uncommon (for the very large) doesn't negate their impact. Equally less-large companies fail all the time, and so if you work for something a bit smaller it's a prudent strategy to invest you time in one place, and your assets elsewhere.
The chance of you being laid off after a stock price fall is most likely correlated.
No, its not. Its “effectively the same as” using some of your shrinking-in-real-terms salary to buy stock; if you can afford to do it at all, you could afford to do it more if you had a raise, so clearly the two are not equivalent.
(OTOH, if Microsoft undershoots the market on salary and has stock worth buying, if you are good at your job you can get a job someplace that isn’t undershooting and use your additional salary to buy Microsoft stock — which is equivalent to both getting a raise and using some of your salary to buy stock.)
EDIT: Of course, if leaving for places not undershooting on salary becomes popular with the competent, buying Microsoft stock based on past performance may turn out to be a suboptimal idea.
(Individual stocks have more returns because they're riskier, not because they have more alpha. And you're accepting however much risk you get instead of planning for it - just borrow someone else's money if you like it so much.)
Buying stock does not magically eliminate the need for a raise.
They said that as an employee you can buy the stock and see yourself a slight raise in that regard. If an internal raise isn't on the cards.
Without a raise, you're worse off whatever you do.