Private equity’s experiment with worker ownership

私募股权在员工持股方面的尝试

Behind the Money

2024-11-06

16 分钟
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Private equity earned a reputation as a ruthless and lucrative business. But over the past few years, large groups have been doing something that seems like the opposite of their cutthroat image: giving equity worth hundreds of thousands of dollars to the ordinary workers at the companies they own. Antoine Gara, the FT’s US private & institutional capital correspondent, explains how these payouts make business sense for private equity firms – and help soften their tough image. - - - - - - - - - - - - - - - - - - - - - - - - - -  For further reading: Workers getting share in windfalls as private equity firms soften image Private equity groups’ assets struggling under hefty debt loads, Moody’s says Blackstone plans to list some of its largest investments  - - - - - - - - - - - - - - - - - - - - - - - - - -  On X, follow Antoine Gara (@antoinegara) and Michela Tindera (@mtindera07), or follow Michela on LinkedIn for updates about the show and more. Read a transcript of this episode on FT.com Hosted on Acast. See acast.com/privacy for more information.
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  • Private equity has long held a reputation for being ruthless, a no holds barred industry.

  • These were very scrappy mercenary dealmakers and With their really iconic investments of that era,

  • like RJR Nabisco,

  • they had no real compulsion about breaking up a company and selling off different parts,

  • which really struck a nerve in the mainstream of America.

  • My colleague Antoine Guerra says that in the 1980s,

  • the private equity industry relied on deals that used lots of debt.

  • That kind of strategy often led to collateral damage for workers,

  • while PE executives took home massive windfalls.

  • In the mid 1980s, the private equity firm KKR did a leveraged buyout of grocery store chain Safeway,

  • and they used a very small sliver of equity to buy what was one of America's biggest companies.

  • And after they acquired the supermarket, you know,

  • the company went through brutal layoffs and salary cuts and it became hugely controversial.