Mark Cuban, chairman and chief executive officer of Axs TV, speaks during the Skybridge Alternatives (SALT) conference in Las Vegas, Nevada, U.S., on Thursday, May 9, 2019. SALT brings together investors, policy experts, politicians and business leaders to network and share ideas to unlock growth opportunities in finance, economics, entrepreneurship, public policy, technology and philanthropy.
Capitalism will become more “compassionate” as a result of the coronavirus pandemic, billionaire entrepreneur Mark Cuban said Wednesday.
“I think capitalism is going to become a lot smarter and a lot more compassionate because of what we’re going through,” Cuban said on CNBC’s “Closing Bell.”
Cuban, owner of the NBA’s Dallas Mavericks, said he thinks executives will now recognize that they need to put employees first. The consequences of not doing so will be greater now than it was in the aftermath of the financial crisis, when social media was still in its nascent stage, Cuban said.
“It can’t just be about shareholders,” Cuban said. “In fact, you have to put employees ahead of shareholders.”
Shareholders will ultimately reward the companies that do so by awarding their stock a higher multiple, Cuban argued.
Cuban said investors may say, “I’ll give company A, B, or C a higher P/E ratio when I buy the stock as a reflection of the fact that they understand the longer term and it’s not just about this quarter or this year.”
Cuban has been outspoken in recent weeks as the coronavirus pandemic intensified.
Cuban has warned businesses against sending employees back into the office too soon and put pressure on Washington lawmakers to support workers who are impacted by the economic shock. He’s also said any company that receives government aid to weather the pandemic should be prevented from buying back stock.