- Mark Cuban has been critical of the US government’s response to the coronavirus-induced recession.
- The Shark Tank judge and investor is urging companies to help fill the void by rethinking compensation and ownership structures.
- “NOW is the time to re-evaluate your comp and reward structures and look at bottom up rather than top down reward structures & to give equity to everyone,” he said.
- Visit Business Insider’s homepage for more stories.
There’s never been a better time for executives to consider more employee-ownership of a company, says Mark Cuban.
The NBA owner and Shark Tank judge has been vocal about how companies, economies, and governments can recover form the coronavirus pandemic. Over the weekend, his focused turned to leadership.
“If you are the CEO/Director of a public company, or investment fund, NOW is the time to re-evaluate your comp and reward structures and look at bottom up rather than top down reward structures & to give equity to everyone,” Cuban said on Twitter. “Otherwise your brand and business could get CRUSHED.”
Cuban has been critical of the US government’s response to the coronavirus-induced recession, especially of its botched rollout of the Paycheck Protection Program, which offers forgivable loans to businesses.
Employee ownership, while still a minuscule movement among American business, has clear benefits, researchers have found. Giving workers options of buying stock at a reduced cost can increase how invested employees feel – both financially and morally – in the business, thereby helping to up productivity, Harvard Business Review found in 2018.
At that time, only about 12% of the US workforce was employed by worker-owned enterprises. And they aren’t all tiny shops either; large agricultural names like Land O’Lakes and Ocean spray count employees among their largest shareholders. Publix Super Markets, a chain with more than 200,000 workers, also runs a robust employee stock ownership, or ESOP, plan.
In 2014, Rutgers University researchers found that employee ownership can help boost profits by as much as 14%.
“Give them stock in a meaningful way,” Cuban said on a podcast earlier this year. “You’re going to need them to grow your company. We all are going to need them to grow this country in a world back to where it was economically.”
“You 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 up,” he said. “No entrepreneur can do this alone. You need every single employee committed to helping you get through this, so recognise that. Reward them for it.”
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