Mark Cuban, a billionaire, believes that employees should also benefit from the increasing wealth of founders and C-suite executives, which stems from significant stock appreciation.
TL;DR
- Mark Cuban believes employees should share in company prosperity through stock ownership.
- He suggests incentives for companies to grant employees stock at the same percentage as CEOs.
- Cuban has a history of distributing profits via bonuses and advocating for employee stock options.
Cuban responded to a recent Oxfam report stating that billionaire wealth has risen by $33 trillion since 2015, posting on X that the surge is due to “the stock market has gone straight up.”
Do you know who's been financing the recent surge in funding? Individual investors. Cuban commented on 401ks. “The better question is, why are we not giving incentives to companies to require them to give shares in their companies to all employees, at the same percentage of cash earnings as the CEO?”
Although numerous firms provide stock ownership or profit-sharing opportunities, many impose limits on employee benefits.
Intel , a technology firm, offers employees a stock purchase opportunity twice annually. During this period, staff can acquire shares, up to 15% of their earnings, at a 15% reduction, with an annual cap of $21,250. Tech behemoth Adobe permits its staff to put aside as much as 25% of their paychecks, capped at $21,250 annually, while receiving a 15% price reduction.
Cuban asserts that wealth itself isn't the issue; rather, it's the way businesses deploy it.
Mark Cuban, the star of Shark Tank, has amassed an estimated net worth of $6 billion through strategic investments in ownership. He launched his career by establishing broadcast.com, which he subsequently sold to Yahoo for a sum of $5.7 billion in 1999. Currently, he holds a minority ownership in the NBA's Dallas Mavericks and is a co-founder of his 2022 enterprise Cost Plus Drugs. .
Given his success, the investor says wealth gains for leaders are okay, just as long as it’s benefiting everyone properly: “Compassion and capitalism—not greed—are what can make this country far greater.”
Research indicates that broader stock ownership leads to improved outcomes. Cuban stated, "This aligns with my experiences across several companies," speaking to Fortune.
The billionaire added that the more “liquid net worth” a CEO has, the more opportunity they have to benefit others and change their life for good.
“The value of those dollars become much greater, to you, and so many others, when you use your business, or other expertise to help others.”
Cuban has a history of distributing profits via bonuses.
Cuban has consistently advocated for companies to offer employees stock options, a principle he's implemented in his own businesses. He's frequently distributed earnings via cash bonuses instead of stock options.
“In every business I’ve sold, I’ve paid out bonuses to every employee who’d been there for more than a year, ” he said in a previous X post.
He stated in his post that when he was at Broadcast.com, 300 of the 330 staff members achieved millionaire status. At MicroSolutions, the company he initially established, he distributed 20% to 80 staff members. He stated the Mavericks wasn't a complete departure, but he disbursed over $35 million to employees.
During a 2020 episode of the “This is Working” podcast, he stated that companies will “get more from your employees, and they will be more committed if you share equity immediately in a meaningful way, so that everybody rises.”
Will you be altering your company's stock option plans for employees this year? Fortune is seeking input from individuals in this situation Contact [email protected]