Stavros: Frontline Equity Must Be Free, Never Shifting Risk to Workers
Pete Stavros · SPECIAL ANNOUNCEMENT: Private Equity Deals Podcast · Sep 15, 2022 · at 27:23
Pete Stavros, KKR's Co-Head of Global Private Equity and founder of Ownership Works, details core principles for structuring employee ownership models for hourly workers.
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“And you can't ask people who make less than a 100,000 dollars to invest in the company. That needs to be an entirely free incremental benefit. This is not about shifting risk onto workers.”
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More from Pete Stavros
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“I think private equity is making a mistake by aggregating all the economics in such a sliver of the company. We would all be better off as investors put aside the good to society by more evenly distributing it because the senior people are going to quickly tap…”
Stavros: C.H.I. Employee Ownership Paid $175K Average, Up to $1M
“So the end payouts ended up being 175,000 on average, and we had hourly workers and truck drivers make almost a million dollars.”
Stavros: Employee equity programs need at least six months of upside
“For this to work, people need to see a path to at least six months of their income with upside, hopefully a year of income on average.”
Stavros: KKR preempted C.H.I. auction by offering a 72-hour contract
“At first round bids, we had a final round type offer. Our price was certain. We submitted a term sheet on a contract and we said, we'll sign this in 72 hours.”
Stavros: KKR Exits Investments Once 80% of Plan Is Achieved
“Likewise, on the exit side, once we've achieved 80% of what we came to do, we start to head for the exits, as long as the markets are reasonable. We're not trying to say, well, now's the perfect time to sell, but as long as you look at the markets, you say it'…”