Mark Cuban calls for rules on government aid to companies: 'We need to make sure all employees benefit'
- "This would be a step toward income equality," Mark Cuban said on Twitter.
- U.S. airlines requested more than $50 billion in aid on Monday.
- Cuban has said he will "put together a program" for hourly workers of his Dallas Mavericks.
Billionaire Mark Cuban said Tuesday that government assistance to companies hit by the coronavirus pandemic should come with provisions to curb income inequality between executives and workers.
Cuban said on Twitter that any incentives used by those companies to pay executives — including equity or re-pricing existing stock options — should not be allowed unless all employees benefit.
"If we are going to bailout companies we need to make sure all employees benefit from a turnaround, not just execs," he said.
In an attached note, Cuban said, "this would be a step toward income equality."
Cuban said later on Tuesday that companies who received government assistance should be forbidden from buying back their shares in the future.
The calls for major assistance to large companies from the federal government have risen as the coronavirus pandemic has hit the United States and blunted economic growth, particularly in the travel sector. U.S. airlines requested more than $50 billion in aid on Monday. Some lawmakers and unions have said the airlines should not get a blank check.
The virus has led to travel restrictions around the world and the closures of bars, restaurants and retail stores across the United States and other major countries, leading many economists to predict a recession.
Executives of public companies are often paid in part through stock options, which allow management to buy stocks at a set price even if the stock price has gone up. If the options are re-priced, then executives could still make a big cut from those options even if the company's stock has fallen over a longer time-frame.
Airline stocks have plunged further than the broader market during the sell-off, with American Airlines being down more than 40% for the year.
Cuban, who owns the NBA's Dallas Mavericks, said he would "put together a program" for the team's hourly employees after the league suspended its season due to the coronavirus.