Employee Stock Ownership Plans 1 ESOPs: An Alternative Form Of Ownership.
Using employee benefit trusts for employee ownership
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Transcript of Using employee benefit trusts for employee ownership
Using employee benefit trusts for employee ownership
Graeme Nuttall
Partner, Field Fisher Waterhouse LLP
UK Government Independent adviser on employee ownership
Email: [email protected]
Co-operative Education Trust Scotland
31 May 2012
•Unprecedented Government support
•Role of independent adviser
•Informal consultation
•Obstacles
•Solutions?
Employee ownership
Unprecedented Government support
• Nick Clegg, Deputy Prime Minster’s announcement on 16 January 2012 at Mansion House:
“...of a new Government drive to introduce the concept of employee ownership into the mainstream British economy”
• Norman Lamb is leading the cross-Whitehall work to investigate how Government can support this growing business model
• The Mutuals Taskforce under Julian Le Grand and the Cabinet Office led by Francis Maude are promoting employee led mutuals
• The reform of Royal Mail and its transformation into an organisation in which staff have a meaningful stake
• HM Treasury internal review of employee ownership
Role of independent adviser
• A new role
• The remit is to:
"work with Government to identify the barriers to employee ownership and help find the solutions to knock them down”
• The independent adviser is asked to make his recommendations to Government in a report presented to Norman Lamb
• The answers and solutions will be brought together at a summit chaired by the DPM on 4 July 2012
• Part-time and unpaid
• Does not provide advice on specific cases or take any executive decisions - he may continue to advise clients
Informal consultation
• Organised by Department for Business, Innovation & Skills (”BIS”)
email: [email protected]
• Key questions:
• What are the barriers?
• What are the solutions?
Obstacles?
Consistent themes, include
• Lack of awareness of the concept of employee ownership
• Information is often completely misunderstood
• There can be resistance due to fixed ideas about ownership models
• There is a lack of awareness of the solutions that already exist
• There may be a fundamental problem with access to finance to implement employee buy outs
• There are complexities in the legal structures needed to implement and maintain employee ownership.
• There probably are material obstacles in how the tax system applies
Lack of awareness
Solutions?
Raise awareness
Solutions?
Increase resources and reduce complexity
• Use of an employee benefit trust (“EBT”)
John Lewis Partnership
plc & subsidiaries
John Lewis PartnershipEmployee
Benefit Trusts
Solutions?
Donald Insall &
Associates Limited
Employees
Wilkin & Sons
Employee Benefit Trust
Individuals as trustees
Founder’s family etc.
Employment
Beneficiaries
Shareholders