An executive of KKR (NYSE: KKR), a private equity giant involved in the senior living industry, is spearheading a new effort aimed at promoting more employee ownership structures.
The executive is Pete Stavros, co-head of global private equity at KKR. In 2019, the company became the capital partner of Waltham, Massachusetts-based Benchmark. The private equity firm also helped fuel Sunrise Senior Living’s move from a public to a privately held company in 2013.
Stavros’ new effort, dubbed “Expanding ESOPs,” was built to promote employee stock-ownership plans. According to the Wall Street Journal, the effort was launched this week. It’s backed by dozens of organizations, including academic institutions, law firms and banks.
On Wednesday, he took to the 2024 NIC Fall Conference stage to discuss his vision for the new effort. Stavros believes that employee stock plans are one of the keys to getting employee buy-in. And he sees it as a potential way to boost equity in the workforce.
“There’s a huge opportunity [to address] wealth inequality, employee engagement, financial literacy, racial equity, lowering the quit rate and driving productivity in the country,” Stavros said. “In my view, it’s a very important idea, and if we could make this more common, we could have a huge impact on the economy.”
The effort builds on Stavros’ organization, Ownership Works, and aims to push lawmakers to pass legislation “to make sure workers get their stock at a fair valuation, that the plans benefit front-line workers over top executives and that the benefits from any tax breaks flow to workers,” the Wall Street Journal reported.
Under typical employee stock plans, workers own a stake in the company they contribute to. As such, they stand to gain monetarily through that ownership, sometimes in large lump sums. Doing so also helps boost employee engagement and job satisfaction, Stavros said.
Stavros’ effort is especially timely and relevant for the senior living industry given its ongoing struggles hiring and retaining frontline workers. And although it’s not directly positioned for senior living operators, The Springs Living CEO Fee Stubblefield called the effort very important for operators to pay attention to, given those challenges.
“If you think about what we do every day, the transaction that’s most important is that one between our direct frontline staff and our residents,” Stubblefield said on the NIC stage. “That’s where magic happens, that’s where quality is going to happen.”
Employee stock plans are not a common practice in senior living, nor in the U.S. — though operators have flirted with the model before. According to a 2023 tally from the National Fund for Workforce Solutions, there are nearly 6,500 companies offering ESOPs in the country.
But it could be a growing trend down the road – and a beneficial one to society, according to Stavros.
“As hard as we are all trying to diversify the C-suite and the tops of American companies, they are still overwhelmingly white and male,” he said at NIC. “That means we are not enabling people of color and women to participate in the most important drivers of wealth creation in the country.”
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