Juan Hernandez joined SpaceX in 2015 as a welder making $28 an hour. The company offered him $10,000 in stock alongside his wages. He accepted without giving it much thought. He’d never been offered equity at any job before and didn’t really know what to do with it.

When SpaceX went public this year at a $1.77 trillion valuation, Hernandez’s 6,500 shares were worth just over $1 million, according to CBS News. He now works at Blue Origin. He’s teaching his kids how to invest.

Mark Cuban saw that story and said it should be the rule, not the exception.

What Mark Cuban said about company stock and income inequality

“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,” Cuban said on the “What It Takes” podcast. “The way you’re going to reduce income inequality for anybody who works with somebody is making sure they get shares of stock, and then they benefit.”

He’s not just theorizing. Cuban gave equity to all 330 employees at Broadcast.com before Yahoo bought it for $5.7 billion in 1999. About 300 of them became millionaires. He did the same at his first company, MicroSolutions.

He’s made, in his own words, at least a thousand millionaires in his career, and says he plans to keep that number climbing.

The SpaceX IPO gave him fresh ammunition for the argument. More than 4,400 current and former SpaceX employees became millionaires when the company listed this year.

About 400 of them hold stakes above $100 million. Most of them aren’t executives. They’re welders, machinists, technicians, and factory workers who built the rockets with their hands and accepted stock grants when they joined.

Why income inequality in America makes Cuban’s argument urgent right now

The numbers aren’t subtle. S&P 500 CEOs made 285 times the median pay of their workers in 2024, up from 268 times the year before, according to the AFL-CIO.

The average CEO took home $18.9 million, up $1.4 million from the prior year. The people who work for those CEOs didn’t see anything like that.

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The reason is not complicated. Stock options, equity grants, and performance bonuses go to the people at the top. The janitor gets a wage. The welder clocking in at $28 an hour gets a wage. They build the thing, but they don’t own any of it. That’s the gap Cuban keeps pointing at.

Cuban’s argument is that this doesn’t have to be the default. SpaceX proved it isn’t. The question is why more companies haven’t copied the model.

Mark Cuban’s specific plan for how to incentivize employee stock ownership

Cuban isn’t just making a moral case. He’s outlined a specific mechanism for how to actually get more companies to do this.

His idea is to use the tax code. If a CEO gives the same percentage of stock they receive in equity to every employee, the company pays a lower corporate tax rate than the current 21%.

“So if the CEO gets $100,000 worth of stock because they make $1 million in cash, and the janitor makes $50,000, then they deserve the same percentage in stock, and that will change the game,” Cuban said.

The percentage model is the key part of his pitch. Nobody is saying the janitor gets the same dollar amount as the CEO. The janitor gets the same percentage.

If the CEO makes $1 million in cash and gets 10% of that in stock, the janitor making $50,000 gets 10% of that in stock, too. Different numbers, same rule. That’s the idea.

Companies with employee ownership stakes tend to see higher productivity and lower turnover.

Natalie/Getty Images

What the research says about employee stock ownership and wealth inequality

The Harvard Business School did the math on this in 2021. If all private firms in the U.S. became 30% employee-owned, household wealth in the country would effectively double. The top 1% of wealth holders would see their net wealth drop by roughly 14% as a result, according to Harvard Business School research.

The benefits go beyond wealth distribution. Companies with employee ownership stakes tend to see higher productivity and lower turnover. A Rutgers University study found that companies offering employees ownership stakes of at least 5% had a higher likelihood of survival than those without it, because workers with equity have more reason to care whether the business does well.

“When you align everyone’s incentives with a common goal, everyone will work harder to achieve that goal,” said Ethan Rouen, a Harvard Business School professor, in an interview about the research. “When you have an equity stake, all of a sudden you have a claim on the upside, and so that incentivizes you to work harder to increase that upside.”

What Mark Cuban’s employee ownership model means for workers, businesses

Cuban is not the only billionaire making this argument. Elon Musk told Texas Governor Greg Abbott that his philosophy has always been that everyone at the company should receive stock so they can participate in the upside. That philosophy is now visible in the form of 4,400 SpaceX millionaires.

Cuban’s other major project, Cost Plus Drugs, follows the same principle of cutting out the middlemen and distributing the benefits more broadly. Where Cost Plus goes after pharmaceutical middlemen to make drugs cheaper, the employee equity model goes after the structural gap in how compensation is designed to funnel upside to the top.

Whether the tax incentive mechanism he’s describing gets traction in Washington is a separate question. But the SpaceX IPO just gave the argument the most concrete real-world example yet.

A welder who joined a company in 2015 for $28 an hour, who never expected to own anything more than his tools, is now a millionaire.

Cuban’s point is that Hernandez shouldn’t be a feel-good story. He should be the norm.

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