8 ms·

Sorry for the naive question, but how does this work? So let's say the employees now are part of this trust which owns 75% of the shares. What is the benefit?

Sorry for the naive question, but how does this work? So let's say the employees now are part of this trust which owns 75% of the shares. What is the benefit? The trust owns the shares legally correct? Is it some sort of profit sharing scheme? I assume you don't hold on to the shares when you leave the company (as they are with the trust)? Does every new hire dilute the ownership? How does this actually impact the day to day employee if at all? My wife is part of an "employee" owned company and all it really means is more responsibility without any real benefit other than a paltry profit sharing payout of a few hundred bucks each year. So I am a little skeptical.

iscrewyou 8y ago
It maybe about more than money. About taking control of the direction of the company?
miketery 8y ago
Off top of my head: - voting rights - profit sharing (dividend) - on leaving you would sell your shares back to the trust - on hiring you would be granted shares (w/ cliff and vesting)
- C1sc0cat 8y ago
  Not if its a coop. Its unclear how the trust is setup You get your shares (there is no vesting) on day one of becoming a member - you don't automatically become a member there is normally a probation period.
SimonPStevens 8y ago
In this case I think the primary reason is to protect the company. Aardman is probably a fairly hot company right now. Probably prime for a purchase by one of the big studios. But then it would most likely just get broken up and turned into a mill for churning out look-a-like content. Or possibly even just a logo stamped on contracted out content. I believe the founders have been fairly clear in the past about not being interested in selling. While the founders still own it they can just turn down these offers and stay independent, but soon they are going to retire and will have to give up ownership to someone. And that someone might just decide to take the big payout and sell. So this is their way of ensuring that the company continues to run as it is for the good of the employees. It can now only be sold if the majority of employees vote to accept the sale, and if they do at least they'll also be the ones to get any associated payout not just some profit driven owner.
- relix 8y ago
  Either it's hard to create the content, or it is not. If it's not hard, the studios don't need to buy Aardman. The IP they have is negligible, and no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway). If it is hard, the studios would need to keep the employees who manage to do this hard thing, and it would be in the purchaser's best interest to manage it as if it were a butterfly.
  - Doxin 8y ago
    You're making the big assumption that this potential buyer is rational.
  - SmellyGeekBoy 8y ago
    > no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway). Speak for yourself, I know I certainly do.
    - williamdclt 8y ago
      He has a point that it is very niche though (I never heard of them for example)
      - brbrodude 8y ago
        Maybe it's not known by name, but there's certainly a "trademark" in the design & animation that I'd guess is widely recognized around the world(e.g.: I'm in Brazil and recognized only when seeing the article image), so I imagine there's a following. If you add that it's like an early hooker(i.e.: most watched as a child), then there's probably another multiplier for the brand/studio value right there.
      - Mary-Jane 8y ago
        Ditto
    - 52-6F-62 8y ago
mygo 8y ago
I worked with some consultants who did this sort of thing for companies, and their main spiel was... Sometimes a company’s owners have no one to pass their ownership down to (not having kids or their kids not wanting to take on the family business, etc). So they either sell the business off or do layoffs and liquidate and move on. There have been instances where companies that employed a good amount of people in a town shut down due to this. Making a company employee-owned is one way to keep it alive and operational. Sometimes it’s a better option than selling the ownership to a third party. But then again that was just their sales pitch.
- bsimpson 8y ago
  Bob's Red Mill did the same thing: https://en.wikipedia.org/wiki/Bob's_Red_Mill https://en.wikipedia.org/wiki/Bob's_Red_Mill
  - mygo 8y ago
    ah there we go, ESOP. Not to be mistaken with a cooperative.
    - satya71 8y ago
      New Belgium is also owned by employees via ESOP. What is the practical difference between ESOP ownership and cooperative?
      - Alex3917 8y ago
        An ESOP is used to allow the owners to sell their stock to employees. The owners benefit by getting a tax break, and the employees benefit because they're allowed to pay for the stock out of the future earnings of the company rather than needing to pay out of pocket. Most co-ops are formed using ESOPs, but not every company that does an ESOP becomes a co-op. For example, a company could just sell 20% of its stock to its employees but still remain largely owner controlled. Even if you start a company knowing you want it to be a co-op, the best practice is currently just make it a C Corp and keep it that way until it's profitable and stable and no longer growing quickly. Unfortunately there currently aren't really good ways to finance co-ops, so creating a traditional company and then later converting it via an ESOP seems to be the recommended practice. I think there are some people working on better alternatives, but I don't follow the space super closely.
fabianhjr 8y ago
Hey, essentially this means that stakeholders are now the shareholders. In other words, they now became a worker-cooperative; they are the 1 in 8 worldwide that don't sell their time and surplus value. Union-Cooperative Strategy: https://newsyndicalist.org/2017/09/30/union-cooperative-strategy-david-oconnell/ https://newsyndicalist.org/2017/09/30/union-cooperative-stra... International Cooperative Alliance: https://www.ica.coop/en https://www.ica.coop/en Mondragon Cooperative: https://www.youtube.com/watch?v=Mwwq3ujkfkU https://www.youtube.com/watch?v=Mwwq3ujkfkU
- C1sc0cat 8y ago
  Possibly its not clear mentioning John Lewis is a bit of a warning flag - JL being the black sheep of the uk coop movement.
  - Angostura 8y ago
    Black sheep in what way?
    - C1sc0cat 8y ago
      They outsourced their cleaners and some of the way the constitutional set up works is counter to the spirit of the coop movement
      - platz 8y ago
        No true scottsman, eh?
        C1sc0cat 8y ago
        There is a formal definition of what makes a coop. and outsourcing your lower paid members job's fails he sniff test.
        platz 8y ago
timthorn 8y ago
The John Lewis Partnership is perhaps the most famous employee-owned company in the UK, and they have a fair amount of information about what it means, available on their website: https://www.johnlewispartnership.co.uk/work/employee-ownership.html https://www.johnlewispartnership.co.uk/work/employee-ownersh...
- TeMPOraL 8y ago
  Was going to say that Co-operative is probably a much more well-known UK company of this type, but checking that now, I just learned that Co-operative is in fact a brand name for a group of such companies.
- arethuza 8y ago
  I always thought it was amusing that it was Waitrose (the upscale food shops owned by Jowhn Lewis) that came to the rescue of the Prince of Wales' efforts to create his own food brand with Duchy Originals. Mind you - considering who shops at our local Waitrose this is no real surprise.
C1sc0cat 8y ago
Its unclear from the article and the Guardian article it references exactly what is happening. Setting up an EBT is a common way that worker coops are set up - for a worker coop its one member one vote and the equity is split equally between th emembers / cooperators Its not clear if they are converting to a worker coop or not unless the workers control the trust its not a coop. One of the benefits of an EBT is tax advantages especially if the coop gets taken over - preferably not mondraggon :-)
alehul 8y ago
Here's a link with much more information on the structuring and other details: https://www.theguardian.com/film/2018/nov/10/wallace-gromit-producers-hand-stake-in-business-to-staff https://www.theguardian.com/film/2018/nov/10/wallace-gromit-...
notyourday 8y ago
It's knee-jerk accolades. Shares held in a trust with workers being beneficiaries would just enrich trustees. In fact the workers now have even less say to what is happening in the company because it costs enormous amount of money to make trustees to do anything they do not want to do.

iscrewyou 8y ago

It maybe about more than money. About taking control of the direction of the company?

miketery 8y ago

Off top of my head: - voting rights - profit sharing (dividend) - on leaving you would sell your shares back to the trust - on hiring you would be granted shares (w/ cliff and vesting)

C1sc0cat 8y ago
Not if its a coop. Its unclear how the trust is setup You get your shares (there is no vesting) on day one of becoming a member - you don't automatically become a member there is normally a probation period.

SimonPStevens 8y ago

In this case I think the primary reason is to protect the company. Aardman is probably a fairly hot company right now. Probably prime for a purchase by one of the big studios. But then it would most likely just get broken up and turned into a mill for churning out look-a-like content. Or possibly even just a logo stamped on contracted out content. I believe the founders have been fairly clear in the past about not being interested in selling. While the founders still own it they can just turn down these offers and stay independent, but soon they are going to retire and will have to give up ownership to someone. And that someone might just decide to take the big payout and sell. So this is their way of ensuring that the company continues to run as it is for the good of the employees. It can now only be sold if the majority of employees vote to accept the sale, and if they do at least they'll also be the ones to get any associated payout not just some profit driven owner.

relix 8y ago
Either it's hard to create the content, or it is not. If it's not hard, the studios don't need to buy Aardman. The IP they have is negligible, and no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway). If it is hard, the studios would need to keep the employees who manage to do this hard thing, and it would be in the purchaser's best interest to manage it as if it were a butterfly.
- Doxin 8y ago
  You're making the big assumption that this potential buyer is rational.
- SmellyGeekBoy 8y ago
  > no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway). Speak for yourself, I know I certainly do.
  - williamdclt 8y ago
    He has a point that it is very niche though (I never heard of them for example)
    - brbrodude 8y ago
      Maybe it's not known by name, but there's certainly a "trademark" in the design & animation that I'd guess is widely recognized around the world(e.g.: I'm in Brazil and recognized only when seeing the article image), so I imagine there's a following. If you add that it's like an early hooker(i.e.: most watched as a child), then there's probably another multiplier for the brand/studio value right there.
    - Mary-Jane 8y ago
      Ditto
  - 52-6F-62 8y ago

mygo 8y ago

I worked with some consultants who did this sort of thing for companies, and their main spiel was... Sometimes a company’s owners have no one to pass their ownership down to (not having kids or their kids not wanting to take on the family business, etc). So they either sell the business off or do layoffs and liquidate and move on. There have been instances where companies that employed a good amount of people in a town shut down due to this. Making a company employee-owned is one way to keep it alive and operational. Sometimes it’s a better option than selling the ownership to a third party. But then again that was just their sales pitch.

bsimpson 8y ago
Bob's Red Mill did the same thing: https://en.wikipedia.org/wiki/Bob's_Red_Mill https://en.wikipedia.org/wiki/Bob's_Red_Mill
- mygo 8y ago
  ah there we go, ESOP. Not to be mistaken with a cooperative.
  - satya71 8y ago
    New Belgium is also owned by employees via ESOP. What is the practical difference between ESOP ownership and cooperative?
    - Alex3917 8y ago
      An ESOP is used to allow the owners to sell their stock to employees. The owners benefit by getting a tax break, and the employees benefit because they're allowed to pay for the stock out of the future earnings of the company rather than needing to pay out of pocket. Most co-ops are formed using ESOPs, but not every company that does an ESOP becomes a co-op. For example, a company could just sell 20% of its stock to its employees but still remain largely owner controlled. Even if you start a company knowing you want it to be a co-op, the best practice is currently just make it a C Corp and keep it that way until it's profitable and stable and no longer growing quickly. Unfortunately there currently aren't really good ways to finance co-ops, so creating a traditional company and then later converting it via an ESOP seems to be the recommended practice. I think there are some people working on better alternatives, but I don't follow the space super closely.

fabianhjr 8y ago

Hey, essentially this means that stakeholders are now the shareholders. In other words, they now became a worker-cooperative; they are the 1 in 8 worldwide that don't sell their time and surplus value. Union-Cooperative Strategy: https://newsyndicalist.org/2017/09/30/union-cooperative-strategy-david-oconnell/ https://newsyndicalist.org/2017/09/30/union-cooperative-stra... International Cooperative Alliance: https://www.ica.coop/en https://www.ica.coop/en Mondragon Cooperative: https://www.youtube.com/watch?v=Mwwq3ujkfkU https://www.youtube.com/watch?v=Mwwq3ujkfkU

C1sc0cat 8y ago
Possibly its not clear mentioning John Lewis is a bit of a warning flag - JL being the black sheep of the uk coop movement.
- Angostura 8y ago
  Black sheep in what way?
  - C1sc0cat 8y ago
    They outsourced their cleaners and some of the way the constitutional set up works is counter to the spirit of the coop movement
    - platz 8y ago
      No true scottsman, eh?
      - C1sc0cat 8y ago
        There is a formal definition of what makes a coop. and outsourcing your lower paid members job's fails he sniff test.
        platz 8y ago

timthorn 8y ago

The John Lewis Partnership is perhaps the most famous employee-owned company in the UK, and they have a fair amount of information about what it means, available on their website: https://www.johnlewispartnership.co.uk/work/employee-ownership.html https://www.johnlewispartnership.co.uk/work/employee-ownersh...

TeMPOraL 8y ago
Was going to say that Co-operative is probably a much more well-known UK company of this type, but checking that now, I just learned that Co-operative is in fact a brand name for a group of such companies.
arethuza 8y ago
I always thought it was amusing that it was Waitrose (the upscale food shops owned by Jowhn Lewis) that came to the rescue of the Prince of Wales' efforts to create his own food brand with Duchy Originals. Mind you - considering who shops at our local Waitrose this is no real surprise.

C1sc0cat 8y ago

Its unclear from the article and the Guardian article it references exactly what is happening. Setting up an EBT is a common way that worker coops are set up - for a worker coop its one member one vote and the equity is split equally between th emembers / cooperators Its not clear if they are converting to a worker coop or not unless the workers control the trust its not a coop. One of the benefits of an EBT is tax advantages especially if the coop gets taken over - preferably not mondraggon :-)

alehul 8y ago

Here's a link with much more information on the structuring and other details: https://www.theguardian.com/film/2018/nov/10/wallace-gromit-producers-hand-stake-in-business-to-staff https://www.theguardian.com/film/2018/nov/10/wallace-gromit-...

notyourday 8y ago

It's knee-jerk accolades. Shares held in a trust with workers being beneficiaries would just enrich trustees. In fact the workers now have even less say to what is happening in the company because it costs enormous amount of money to make trustees to do anything they do not want to do.