‘The janitor to the CEO deserves…’: Mark Cuban finds the answer to income inequality
Pointing out that employee ownership should become a standard practice, billionaire investor Mark Cuban said that sharing company capital with every employee, not just managers, could help reduce income inequality.
Speaking on Sarah McCammon’s “What It Takes” podcast last week, Mark Cuban said, “The CEO’s doorman deserves a stake in the company they work for,” adding, “I would like to see every CEO, every founder, every entrepreneur do what I did, which is give equity to every employee.”
“The way to reduce income inequality for anyone who works with someone is to have them buy stock and then leverage that.”
Cuban made his fortune as co-founder of Broadcast.com, one of the first streaming companies, which Yahoo acquired in 1999 for $4.8 billion. But he became known for sharing the rewards with the people who helped establish the business. He has often said that when a company is successful, employees as well as founders should benefit from it. True to this belief, Cuban gave stock to 330 Broadcast.com employees before Yahoo acquired the company. When the deal was completed, approximately 300 people became millionaires overnight.
Tax incentives could make stock distributions the norm
While Cuban acknowledged it was his personal preference to share equity with employees, he said the government could encourage more companies to do the same by offering tax incentives.
“You can give them incentives to say, ‘Look, if you want that 21% tax rate, then you need to give each employee the same percentage of the cash compensation you give the CEO, whether it’s stock warrants, options, or whatever,'” Cuban said.
Cuban explained this idea with a simple example.
“So if the CEO gets $100,000 worth of stock because he makes $1 million in cash and the doorman makes $50,000, then, you know, they deserve the same percentage of stock and that will change the game,” he said.
Cuban added that if you miss that threshold, “your taxes will go up.”
This isn’t the first time Cuban has made a statement about a more equitable distribution of wealth. He has long supported raising the U.S. federal minimum wage to $20 per hour; He recalled instances where a company he invested in but did not operate or named had employees who needed government assistance.
“I made sure they all got raises,” Cuban wrote in the X post. “It was a shame to me that we didn’t pay enough. I have made or helped create at least a thousand millionaires. And I will continue to work to increase that number.”
Elon Musk also defended employee ownership
Earlier this month, Elon Musk also defended employee ownership, arguing that the strategy was aligned with company incentives. Just over a month later, SpaceX’s IPO has already brought in at least 4,400 millionaires.
“I’ve always had the philosophy that everyone in the company should have a stake in the company so they can contribute to the rise of the company,” Musk told Texas Governor Greg Abbott.
