Mark Cuban is no stranger to speaking his mind. However, of late, there is one notion of him that continues to resurface repeatedly in the news.
According to him, all the employees in an organization, and not just the top management, must be given stocks.
Not a bonus. Not an increment. Ownership.
And he has not said it for effect either. He has been doing it all along. The Idea, In Plain English
Here is the proposition by Cuban himself on his podcast called “What It Takes.”
“I would like to see it so that every single CEO, founder, entrepreneur does what I did, which was to give equity to every single employee.”
Fairly straightforward, isn’t it? What gets fascinating, however, is Cuban’s reasoning.
He claims that paying people their salary is not enough anymore. If the business starts growing and the price of its stocks rises, the ones who benefit from that are those owning the stock.
Typically, this group includes executives, founders, and possibly some early investors. Everybody else? They just receive their salary regardless of any success of the company. This is exactly what Cuban wants to change.
Why He’s So Convinced This Works
This is not some random idea that Mark Cuban thought of for a podcast interview. This man has some serious credentials to his name.
In 1999, Cuban co-founded Broadcast.com. The moment Yahoo bought the firm for $5.7 billion, something amazing happened.
More than 300 of the 330 employees of the company became millionaires. Not only Mark Cuban but everyone in the entire company became millionaires.
There is no doubt that this incident left an impression on him.
The man’s thinking is very simple. People who have an ownership stake in what they are doing behave differently.
They feel more responsible. They are more committed. They don’t come to work just to earn money; they have something at stake.
The SpaceX Story That Reignited This Whole Conversation
These remarks were not made arbitrarily by Cuban. There was a story behind it which became viral and was justified.
Juan Hernandez came on board at SpaceX in 2015 as a welder getting paid $28 an hour. In addition to his salary, the company gave him $10,000 in shares.
At the time, he didn’t pay much heed to it. He had never received any form of equity before, so he had no idea how to appreciate it.
Jump to this year and see SpaceX go public with an incredible valuation of $1.77 trillion. The value of his shares? Over $1 million.
From a welder to a millionaire. Just because somebody felt like giving him some equity in the beginning.
This story caught the attention of Cuban, and he pretty much summed it up by saying that this is how things should be.
He’s Not the Only Billionaire Saying This
It’s not just Cuban banging this drum, either.
Elon Musk has said something strikingly similar. Speaking with Texas Governor Greg Abbott, Musk explained his own philosophy on the matter.
He said he’s always believed everyone at the company should receive stock, so they can share the upside as the business grows.
When two billionaires who don’t exactly agree on everything land on the same page about something, it’s worth paying attention to.
The Tax Code Twist
This is where things get a bit more grandiose and, more importantly, political.
Cuban knows that, while equity sharing voluntarily might sound good, it will not happen. Most CEOs will not be doing that.
And that is why he has suggested the use of the tax code to encourage that sort of behavior.
The proposal, according to him, could involve offering certain tax incentives to firms that would agree to share their stock ownership with every single employee proportionally to what the company pays its executives.
To put it another way, if the CEO receives a stock whose value constitutes 10% of their pay in cash, then the janitor should receive 10% of his pay in stocks.
It is quite a creative approach actually; instead of forcing companies to share their equity on an involuntary basis, Cuban proposes to make them do that via incentives. Major business expansion often starts with long-term thinking. Read how Philippine Airlines is investing in future growth.
Does the Research Actually Back This Up?
It is very easy to brush this statement off as one made by a billionaire who wants to sound good. However, this concept has actual proof.
According to a study done by Rutgers University, companies that offered employees a share of at least 5% had better chances of survival compared to those that did not offer such benefits. It makes perfect sense, doesn’t it? Those who are part owners of a business definitely care more about its success.
This concept was also mentioned by Ethan Rouen – a professor at Harvard Business School. The message of this person was rather simple: when everyone’s motivations are focused on achieving one goal, people will work much harder to reach it.
It is obvious that a person will try a bit harder when he is interested in sharing the profits of the business.
There is also a rather popular Harvard Business School study published in 2021 which revealed that if all private companies in the USA were just 30% owned by their employees, the wealth of households in the country would be doubled.
The Catch Nobody’s Ignoring
But, of course, there is always a downside.
The most vocal critics highlight a number of potential dangers. First, for instance, employees who work in private companies may get shares which have little value on the market as the shares cannot be sold.
Another danger lies in the possibility of wage compression. The logic behind it is that the employer can cut the wages of employees instead of giving them shares.
This way, the stable salary will be replaced by the uncertain income generated from selling stocks in the future.
The dangers highlighted above are substantial as they play an essential role in the implementation of the practice remaining voluntary so far.
Where This Leaves Us
In fact, current schemes of employee ownership involve several million workers in America. According to the figures provided by the National Center for Employee Ownership, there are about 15 million individuals taking part in ESOPs, owning over $2 trillion worth of combined assets.
This figure cannot be considered insignificant. Nevertheless, it represents only a small portion of the total number of employees. The point of view expressed by Cuban can be characterized in such a way that such a scheme of ownership should become the rule rather than the exception.
Whether or not the initiative of the entrepreneur will succeed in the future, it is evident that increasing numbers of managers, as well as workers themselves, raise similar questions.
If the success of an enterprise is achieved due to the efforts of all employees, shouldn’t the latter have ownership stakes in it?
Final Thought
Mark Cuban’s idea goes beyond simply giving employees stock—it challenges companies to rethink how success is shared. When employees have ownership, they’re more likely to feel invested in the company’s future and contribute with a stronger sense of purpose. While equity isn’t the right fit for every business, the conversation around employee ownership is gaining momentum. As more companies look for ways to attract and retain top talent, offering equity could become a competitive advantage rather than an exception. Ultimately, businesses that share growth with the people helping create it may be better positioned for long-term success. Employee ownership is one way to build wealth over time. Learn how families are also planning for the future through long-term investment accounts: Trump’s accounts are now live.
