Beliefnet hit the skids in early 2002 when the dot.com bubble burst. We were out of money and not earning nearly enough money to support our staff. We were a bankrupt, dot.com focused on religion – not exactly a great magnet for new investors. And –dang — it didn’t even occur to us to get a government bailout.
So we did something unusual. We told the staff that if they worked for minimum wage until we could get back on our feet, we would treat the difference between what they earned and what they should have earned as if it were a cash investment in the company. The employees got stock, not options, but actual stock in the company.

I became CEO of Beliefnet at that point and immediately cut my salary to minimum wage, too, as did the other senior managers. Over the course of a few months, I gradually raised all our salaries up (though not to their original levels). Because of the sacrifices we made to help save the company, employees ended up owning a substantial portion of the company. In Chapter 11 and in the subsequent years, we turned Beliefnet around and the employees benefited when we were acquired by News Corp a year ago this month.
Why don’t the auto companies do that? Management and workers could agree to substantial pay and benefit cuts with each dollar earning them stock in the companies. This would provide a huge short term cash savings to the company and give workers a permanent stake in ensuring that the company is managed for success and innovation, not just for job preservation.
p.s. This piece by Jeff Leonard in The Washington Monthly is the most clever solution for the auto industry crisis that I’ve seen.