As CEOs and founders see their wealth skyrocket due to soaring stock market gains, billionaire investor Mark Cuban is advocating for a change that could transform the traditional balance of power in corporate America.

According to Cuban, it is time for employees to share in the financial success of the companies they help build. This idea is not just about equity, it is about fairness, inclusivity, and the potential benefits of shared ownership for everyone involved.

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Why employees should get a piece of the pie

In a recent post on X, Cuban responded to an Oxfam report that stated that the staggering $33 trillion increase in billionaire wealth since 2015, a surge largely happened due to rising stock prices.

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Cuban pointed out that this wealth boom is driven by retail investors and 401(k) contributions, people who are often the same workers that are not benefiting from the market’s explosive growth.

Cuban says that Companies should be required to share stock in their business with employees at the same percentage of earnings as the CEO.

While some companies, like Intel and Adobe, offer stock options or profit-sharing plans, these benefits often have caps and restrictions.

For example, Intel’s program allows employees to buy stock up to 15% of their salary at a 15% discount, but only up to a maximum of $21,250 per year.

Similarly, Adobe’s offering lets employees contribute 25% of their salary, but with the same cap. Cuban argues that these limits fall short, leaving the bulk of the rewards in the hands of executives and investors.

Distribution of company stocks

Cuban is clear that the issue is not wealth itself. It is how that wealth is distributed. With a net worth of $6 billion, Cuban knows firsthand the transformative power of ownership.

His own career began with the sale of broadcast.com for $5.7 billion in 1999, and he has since made a fortune with ventures like his minority stake in the Dallas Mavericks and Cost Plus Drugs.

He believes that CEOs and founders should be allowed to benefit from their businesses’ success, but that those gains should also be shared with employees who contribute to that success.

“The more liquid net worth a CEO has, the more opportunity they have to help others,” Cuban says. “The value of those dollars becomes much greater, not just to you, but to so many others when you use your business or expertise to help others.”

In his view, sharing wealth is not just good for employees; it is good for business. Studies have consistently shown that when employees own stock in the companies they work for, performance improves and workplace morale rises.

Cuban’s personal track record of sharing profits

Cuban is not just talking the talk; he has actually walked the walk. Over the years, he has made a point of sharing the wealth in his own ventures.

In fact, he is often paid out bonuses to employees instead of offering equity, but those bonuses have been significant. When he sold Broadcast.com, 300 out of 330 employees became millionaires.

At his first company, MicroSolutions, he paid out 20% of the sale price to 80 employees. At the Dallas Mavericks, while he did not execute a full exit, he still paid out more than $35 million to staff.

In a 2020 interview on the ‘This is Working podcast,’ Cuban explained that offering meaningful equity from the outset not only motivates employees but also increase a stronger sense of commitment.

“Businesses get more from your employees, and they will be more committed if you share equity immediately in a meaningful way, so that everybody rises,” he said.

Cuban’s approach proves that when employees have a financial stake in the business, it creates a shared sense of purpose and mutual benefit.