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Leon Kaye headshot

How This Tech Company's Pre-IPO Equity Pledge Helped It Align with Black Lives Matter

By Leon Kaye
Black Lives Matter

In the nearly three months since the murder of George Floyd, there’s been no shortage of companies proclaiming allyship with the Black Lives Matter movement. But many Black employees are justifiably leery about their company’s public statements insisting they “stand” with people of color.

This tech company was quick to align with Black Lives Matter

One company that says it is stepping up to meet the moment is Okta, a cloud computing firm based in San Francisco. The 11-year-old company, which boasts a market cap of approximately $25 billion, announced earlier this summer that it would commit $1 million in funds to take on racial equity; its co-founders, Todd McKinnon and Frederic Kerrest have pledged another $2 million toward this effort. McKinnon and Kerrest also said they would match employees’ donations to a fund focused on racial justice, essentially tripling any employee’s contribution.

For Okta, this support of the Black Lives Matter movement is business as usual. “Our strategy is always to listen first to our employees and partners, then empower employees to guide our response,” said Erin Baudo Felter, the company’s vice president of social impact. “The end result is that we’re not just ‘responding.’ We’re building the muscle inside our organization to be able to take on issues like racial justice and inequality longer-term.”

Match your deeds to your words . . . and checks

Such an approach is far more beneficial than merely putting out a press release, modifying a logo and then simply writing a check to respond to the Black Lives Matter movement, which to date has been the standard M.O. for U.S. companies. On this an other social justice challenges, Okta says it’s ensured employees would have a voice, too. Says Felter: “At Okta, we’re doing more than giving money away to organizations in need. Our executive team has had exposure to the issues in our communities that we support. They play a critical role in our commitment to social impact and embed these efforts into their teams.”

In addition to the financial commitment, Okta is also partnering with the Tides Foundation. The 44-year-old nonprofit is providing the company’s employees with training and workshops so they can gain more knowledge about the Black Lives Matter movement and attain the skills critical so they can decide on grant-making recommendations.

“There is a clear understanding at Okta that social impact is not only core to building a successful company and one where people want to work, but also that this is the kind of role companies increasingly must play in society: that we are interconnected to the communities around us,” Felter added.

In addition to Okta’s promise to support and fund the Black Lives Matter movement, the company also runs the Okta for Good initiative, which offers free or discounted licenses for its suite of products to nonprofits.

How the 1% Pledge can help boost the Black Lives Matter movement

Okta is a Pledge 1% company, a global movement that encourages global companies of any size to donate 1 percent of their equity, time, product or profit — or any combination of the four — to charitable causes. The company’s early pledge to donate equity has certainly paid off for its partner nonprofits and future grantees since Okta went public in 2017.

“You can read our S-1 and see 300,000 shares were set aside to support Okta for Good,” Felter told TriplePundit as she highlighted the company’s early commitment to donate a portion of its equity. “At IPO, the value of that equity was about $5 million in total. Because our stock has performed so well over the past three years, that same equity is valued at about $60 million today. This is the power of pre-IPO equity commitments.” 

Okta’s approach toward aligning with the Black Lives Movement exemplifies how the company addresses social impact initiatives across the organization. But it helps that any company’s founders embrace support for social justice early on. Felter made it clear that, as the saying goes, this commitment is in the company’s DNA and was not a knee-jerk reaction to rally behind the latest cause. “One thing that’s different at Okta, and that has allowed our social impact programs to thrive, is that there was a very early commitment at the highest level with our co-founders and the board of directors,” she said.

Bottom line: Okta's existing engagement with employees around its 1 percent pledge placed the company in a strong position to turn to employees for input on Black Lives Matter donations. 

Social impact matters more than ever to employees

For companies seeking to inspire and motivate their employees in the era of COVID-19, nothing has really changed, even if a company’s employees are still working remotely. At a time when many employees are stuck at home and cannot help but be glued to the television or laptop monitor, the stubborn fact persists that people are aware of what’s going on and most likely have strong opinions about how their companies should react. No one wants to work for a company issuing statements supporting Black Lives Matter, or any social cause for that matter, just because the C-suite feels there’s a reputation to defend or, even worse, that there’s a profit to be made.

Okta has made it clear that the company is listening – and was doing so before social justice protests flared up across the U.S. “The conversations with business leaders today are not the same as they were several years ago. Now, there’s an assumption that social impact is a core part of every company,” Felter says.

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Image credit: Kelly Lacy/Pexels

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

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