>Given that the employees are so crucial in building the product that is sold, why is it so uncommon for significant proceeds from M&As to go to employees rather than founders?
It's based on the concept of "ownership." The founders literally own the company. The windfall from selling the company by definition, goes to the owners. That's how it works.
I "own" a car. The mechanic at the shop is the one doing all the grease work of changing the oil and spark plugs etc. But when I sell the car, I (the owner) get the money and not the mechanic. Even though one can argue that the mechanic is the one most responsible for keeping my car running in good enough condition to sell later, I'm still the one who owns the car. The mechanic gets his payment via service fees he charges me. The mechanic getting sweaty and dirty does not grant any ownership of my car. Ownership grants ownership. Substitute car with company. (Presumably, more mechanics happen to own their own cars which makes "ownership" of cars and its ownership benefits much more obvious to the layperson than ownership of companies.)
So, to translate your question in the most direct way, you're asking "why do owners get rewards of M&A but non-owners (such as employees) do not?" If you think of it that way, the question answers itself. It's tautology.
But your question-behind-the-question could then be, "well, why don't the employees get part ownership?" ... and the answer is, they sometimes do! One way is for the "employee" to start their own company. (S Wozniak leaves HP, and S. Jobs doesn't stay with Atari.) The other way is for other owners to grant partial ownership through stock shares (equity). This financial arrangement is almost always a tradeoff because the founder can't afford to pay market rate of full salary. Partial ownership for employees is the dangling carrot compensating for uncompetitive wages. Since established companies like Google Inc and Apple Inc offer competitive wages, they don't need to give new employees partial-ownership of any significant amount.
It's based on the concept of "ownership." The founders literally own the company. The windfall from selling the company by definition, goes to the owners. That's how it works.
I "own" a car. The mechanic at the shop is the one doing all the grease work of changing the oil and spark plugs etc. But when I sell the car, I (the owner) get the money and not the mechanic. Even though one can argue that the mechanic is the one most responsible for keeping my car running in good enough condition to sell later, I'm still the one who owns the car. The mechanic gets his payment via service fees he charges me. The mechanic getting sweaty and dirty does not grant any ownership of my car. Ownership grants ownership. Substitute car with company. (Presumably, more mechanics happen to own their own cars which makes "ownership" of cars and its ownership benefits much more obvious to the layperson than ownership of companies.)
So, to translate your question in the most direct way, you're asking "why do owners get rewards of M&A but non-owners (such as employees) do not?" If you think of it that way, the question answers itself. It's tautology.
But your question-behind-the-question could then be, "well, why don't the employees get part ownership?" ... and the answer is, they sometimes do! One way is for the "employee" to start their own company. (S Wozniak leaves HP, and S. Jobs doesn't stay with Atari.) The other way is for other owners to grant partial ownership through stock shares (equity). This financial arrangement is almost always a tradeoff because the founder can't afford to pay market rate of full salary. Partial ownership for employees is the dangling carrot compensating for uncompetitive wages. Since established companies like Google Inc and Apple Inc offer competitive wages, they don't need to give new employees partial-ownership of any significant amount.