Private Equity Giant Blackstone to Grant Equity Shares to Most Workers in Future US Buyouts

Blackstone, a major private equity investor, is set to make a groundbreaking move by granting equity shares to most workers at the companies it acquires in the US. This decision comes at a time when the private equity industry is facing scrutiny for its practices of layoffs and restructuring.

The $143 billion private equity giant has announced its plans to adopt broad-based employee ownership as part of its US buyout strategy. This move is aimed at creating a more inclusive and vibrant workforce, as well as retaining employees. Joseph Baratta, Blackstone’s global head of private equity, emphasized the importance of expanding profit-sharing to workers beyond senior management roles.

This trend of offering equity compensation to hourly employees and frontline workers is gaining traction in the private equity industry. Competitors like KKR have already implemented broad-based ownership programs, with over 45 companies awarding billions of total equity value to more than 100,000 non-senior-management employees.

KKR’s Pete Stavros has championed the idea of wealth-sharing through employee ownership, highlighting its appeal across political spectrums. The private equity industry is now being called upon to generate wealth for workers via employee ownership, with several firms answering the call.

Blackstone’s move towards broad-based employee ownership is seen as a significant step in creating quality jobs and improving business performance. The company has already implemented employee ownership programs at select portfolio companies and plans to apply the strategy to all new deals where it takes a controlling stake.

This shift towards shared ownership is seen as a positive development in the private equity industry, with experts highlighting the potential for creating value through better jobs for frontline workers. Blackstone’s commitment to fostering workforce development and professional growth is also seen as a key value creator in today’s challenging labor market.

Overall, Blackstone’s decision to grant equity shares to most workers at the companies it acquires marks a new chapter in the private equity industry, signaling a move towards a more inclusive and sustainable business model.