Private Equity Giant Blackstone Commits to Employee Stock Grants

On May 21, the Wall Street Journal reported that the alternative asset manager Blackstone would grant equity to the 18,000 employees at its portfolio company Copeland (alternative non-paywalled version at MSN). The Journal article states that under a new initiative Blackstone plans to announce this week, the practice of broad-based ownership interests for employees will apply “to all new deals going forward in which its private-equity business buys control of a company.”

Blackstone’s private equity portfolio includes 230 companies worth $143 billion and employing more than 400,000 people. Copeland, the portfolio company in which employees will receive an equity stake, is an HVAC company Blackrock bought in 2023 for $14 billion. The Journal article does not specify the form of equity that employees will receive, but it does state that only those employed when Blackstone sells the company or takes it public will receive the equity incentive, in an amount tied to Blackstone’s return on its investment. 

Blackstone’s global head of private equity, Joseph Baratta, says, “in what we’re trying to do across our portfolio, broad-based equity ownership is just a part of a much more important path” focused on providing more opportunities for lower-level workers.

The commitment from Blackstone is similar to that first introduced by private equity firm KKR. KKR’s Pete Stavros created the nonprofit Ownership Works to promote the model, and 19 private equity firms have signed on.