Meet Jay Chaudhry, the Billionaire Who Made His Employees Millionaires When He Sold the Company

Imagine the uncertainty you would feel if your company’s owner announced plans to sell the business. Employees often worry about the future, unsure how new management will impact their jobs. Indian-American billionaire Jai Chaudhry, CEO of cloud-security firm Zscaler, faced this exact scenario when he decided to sell his first start-up. But what unfolded was beyond anyone’s imagination.

In a remarkable act of generousity, Chaudhry transformed the lives of 70 of his employees into millionaires through the sale. His decision to sell the company not only secured his own future but also created lasting wealth for many of his staff.

Chaudhry, now 65, began his entrepreneurial journey in the 1990s with the founding of SecureIT, alongside his wife Jyoti. Investing their entire savings into the venture, they built a successful business. According to CNBC, Chaudhry’s investors allowed him to allocate equity to his employees, a gesture that would later prove to be a life-changing decision.

When Jai Chaudhry sold his company to Verisign in 1998, both he and his employees reaped substantial financial rewards. As Verisign’s stock prices soared in the years that followed, more than 70 of his 80 employees – an impressive 87.5% of the staff – became millionaires. Chaudhry emphasised that distributing equity was beneficial because it acknowledged the hard work and dedication of employees who drove the company’s success.

The employees were thrilled and overwhelmed by the unexpected windfall. Many used their newfound wealth to buy new homes and cars, while others took time off to enjoy their success, Jai Chaudhry told CNBC, adding that they were free to do whatever they wished.

However, the prosperity was not guaranteed to last. When the dot-com bubble burst, Verisign’s stock prices plummeted. This shift in the market meant that employees’ wealth depended heavily on the timing of their stock sales. Those who sold their shares before the bubble burst enjoyed substantial gains, while those who waited likely faced significant regrets.

In a similar vein, businessman Mark Cuban also achieved remarkable results with the sale of his company. After selling Broadcast.com to Yahoo, Cuban not only became a billionaire but also ensured that 300 out of his 330 employees became millionaires too. “This is the right thing to do. No company is built alone,” Cuban reportedly told Fortune.com.

About Jai Chaudhry

Jai Chaudhry was born in 1959 in Panoh village in Himachal Pradesh’s Una. His father, Bhagat Singh Chaudhry, was a farmer. His full name is Jagtar Singh Chaudhry. As a student, he walked 8 kilometres daily to attend school. He graduated from Banaras Hindu University and, in 1982, earned an MBA from the University of Cincinnati in the United States, where he received a scholarship that enabled his studies abroad.

After completing his education, Chaudhry worked at IBM and Unisys. In 2008, he founded Zscaler, a cybersecurity company that serves major global corporations. Zscaler went public in 2018 and is listed on NASDAQ.

As of August 27, 2024, Forbes reported that Jai Chaudhry’s net worth to be $11.3 billion (approximately Rs 10,000 crore). He and his family hold a 40% stake in Zscaler. Before establishing Zscaler, Chaudhry founded four other companies namely, SecureIT, CoreHarbour, CipherTrust, and AirDefence – all of which were subsequently acquired by various firms.