Jay Chaudhry unknowingly partied with millionaires as he bid farewell to work. It was the late 1990s, and he had just sold SecureIT, the startup he co-founded with his wife, Jyoti, to Verisign. Maybe his staff threw an extra fancy celebration or splurged on decorations because when Choudhury left, he did some calculations on the net worth of attendees.
“I went home that night and looked at all the [stock] The options they have, I multiply that by VeriSign’s stock price. That’s when I realized that mathematically there are about 70 or 80 millionaires with stock options,” Chowdhury told CNBCDid it. “It’s impressive,” he added, explaining that he didn’t really understand the windfall that selling his startup would bring to his colleagues.
Chaudhry, 65, is the billionaire CEO of cloud security company Zscaler. But Chowdhury told us that by the time they started SecureIT, he had spent all their joint savings with his wife. CNBC. He said the move, along with independence from outside investors, allowed them to offer more equity to company insiders.
When Chowdhury sold the company in 1998, he wasn’t the only one to walk away with his wallet. VeriSign’s stock price soared over the next few years, making more than 70 of his 80 employees “paper millionaires.”
Likewise, entrepreneur Mark Cuban recently tweeted that most of his sales result in bonuses for employees. The sale of Broadcast.com to Yahoo meant Cuban became a billionaire and “300 of his 330 employees became millionaires.”
“This is the right thing to do. No company is built alone,” Cuban told wealth.
Chaudhry shares a similar mentality. He said CNBC Equity distribution “is good because these employees play a role – they [were] Working day and night.
But long-term financial success isn’t a given. VeriSign’s stock price plummeted during the dot-com bust, then eventually recovered, and employees were more or less valuable depending on whether they cashed out at an inopportune time.
During the surge, however, there was a palpable sense of excitement throughout the office. “People in the company were going crazy because they had never imagined having so much money,” he told us. CNBC, spoke of many employees buying new homes, cars or taking time off. “They can do what they want.”
