Mark Cuban Says One Decision Created More Than 1,000 Millionaires, Now He Wants Every CEO To Copy It

Mark Cuban says a single decision helped create more than 1,000 millionaires across the companies he built and sold, and the billionaire entrepreneur now wants every chief executive to adopt the same approach.

Speaking on the 'What It Takes' podcast, Cuban urged business leaders to give employees equity in the companies they help build rather than reserving stock awards primarily for senior executives. He also proposed using the US tax system to encourage broader employee ownership by offering lower corporate tax rates to companies that distribute equity throughout their workforce.

The comments come as executive compensation and wealth inequality remain under scrutiny in the United States, where stock-based awards have become a major source of wealth for senior management while many rank-and-file workers receive little or no equity.

Cuban said broad employee ownership had already worked at companies he founded and invested in, pointing to Broadcast.com and MicroSolutions as examples where equity grants generated substantial wealth for employees following acquisitions.

Cuban Says Every Employee Should Receive Equity

Cuban argued that companies should award stock to employees using the same proportion of cash compensation applied to senior executives.

He said he would like to see 'every single CEO, founder, entrepreneur' give equity to every employee, adding that workers should benefit directly from the value they help create.

Using a hypothetical example, Cuban said that if a chief executive received stock equal to 10% of their salary, employees should receive stock worth the same percentage of their own pay.

He also suggested Congress could encourage broader employee ownership through tax incentives rather than mandatory rules.

Under his proposal, companies that distribute equity across their workforce using the same percentage formula could qualify for lower corporate tax rates, while businesses that choose not to adopt similar programmes would continue paying higher rates.

Cuban Points to Broadcast.com as Evidence

Unlike some executives who speak about broader employee ownership, Cuban cited his own businesses as examples of the approach in practice.

When Yahoo acquired Broadcast.com in 1999 in a stock deal valued at approximately $5.7 billion, Cuban has said roughly 300 of the company's 330 employees became millionaires after receiving company equity.

He has also described similar employee payouts following the sale of MicroSolutions, the software company he founded before Broadcast.com.

Across his businesses and investments, Cuban said those decisions have helped create more than 1,000 millionaires.

The billionaire has frequently argued that employees should participate in the long-term appreciation of the companies they help grow rather than relying solely on wages and bonuses.

Research Links Employee Ownership to Company Performance

Research has found associations between employee ownership and several long-term business outcomes, although economists continue to debate how broadly those findings apply across different industries.

A Rutgers University study examining publicly traded companies found businesses with meaningful employee ownership were less likely to disappear through bankruptcy, liquidation or acquisition than comparable firms.

Other academic research has linked broader employee ownership with higher employee retention, household wealth accumulation and productivity, although results vary depending on company size, industry and ownership structure.

Researchers have cautioned that employee stock ownership is not without risk because workers may become heavily exposed to the performance of a single company.

Broad Equity Remains Uncommon

Despite growing interest in employee ownership, broad equity programmes remain relatively uncommon outside technology start-ups, employee-owned businesses and companies using Employee Stock Ownership Plans.

Many businesses cite shareholder dilution, valuation concerns and administrative complexity as reasons for limiting stock awards primarily to executives and senior managers.

Private companies also face additional challenges because employees may have limited opportunities to sell or realise the value of their shares before a liquidity event such as an acquisition or public listing.

Cuban acknowledged that implementation would differ across businesses but maintained that wider employee ownership would allow more workers to share in corporate growth over the long term.