19 US Employees Become Millionaires After CEO Sells Company Stake For $1 Billion

Bill Phelps, the CEO of Dave's Hot Chicken and former CEO and co-founder of Wetzel's Pretzels, recently revealed that he turned 19 of his employees into millionaires after selling a majority stake to a private equity firm for close to $1 billion. Speaking to CNBC, the 69-year-old said that creating this many millionaires was intentional. 

"I had some investors who were like, 'you're giving away too much money, this isn't right,'" he said. "They were absolutely right as investors to stand up for other investors. They have a fiduciary duty, but I have a duty to the people that created this business and I was true to taking care of all of those stakeholders in this deal," he continued. 

As part of the deal, every Dave's corporate employee, store manager and assistant manager received a bonus roughly equivalent to their yearly salary, said Jim Bitticks, president and COO of Dave's.

According to CNBC, Dave's Hot Chicken began in 2017 when three childhood friends invested $900 to open a chicken finger stand in a Los Angeles parking lot. Mr Phelps became CEO of Dave's in 2019 after an investor group he was a member of acquired a stake in the company with plans to franchise the brand.

As the leader of Dave's corporate operations, Mr Phelps doesn't micromanage because he trusts his employees to do their jobs well. This leadership style has been his driving factor. 

"I was told by one of my investors that I had no concept of what management compensation should look like," Mr Phelps said. "And he's right, because I don't look at them as management. I look at them as my partners in this journey, and I compensate them as partners in the journey," he added. 

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Meanwhile, Mr Phelps isn't the first CEO to turn his employees into millionaires through the acquisition of a company. Billionaire investor Mark Cuban makes it a habit to give employees bonuses with every company he sells. When he sold Broadcast.com to Yahoo for $5.7 billion in stock in 1999, 300 of the company's 330 employees became millionaires, he said on X last year. 

When Jay Chaudhry, billionaire founder and CEO of cloud cybersecurity firm Zscaler, sold his first company, SecureIT, to VeriSign in an all-stock deal in 1998, at least 70 of his employees became millionaires after VeriSign's stock price surged two years later, he told CNBC Make It last year.