EO Day is an annual UK celebration of employee ownership. In 2021 the emphasis is on why business is #BetterTogether for individuals, their business and the economy. On EO Day 2021 Fieldfisher looks back at what it has done to create more employee owned companies over the last year and also to increase the take-up of employee ownership in the UK and abroad.
#BetterTogether in the UK
Fieldfisher's employee ownership team firmly believe that business is #BetterTogether for individuals, their business and the economy.
On average over the last year Fieldfisher has converted a business a month to employee ownership using the employee ownership trust (EOT) model. All but three of these conversions are to 100% ownership by an EOT trustee. The median shareholding is 93%.
In total 1,000+ employees have become employee owners. UK small and medium-sized employers typically have two owners and on average eight employees. Achieving an average of 87 employee owners per business shows what the EOT can do to broaden corporate ownership. For more information on this data please contact partner Neil Palmer.
The following quotations highlight reasons why businesses Fieldfisher has advised over the last year moved to employee ownership. The strong theme is #BetterTogether:
- Kirsten Henson, the founder of sustainability development consultancy KLH Sustainability said "The small team at KLH are all integral to the business, and employee ownership offers a clear incentive for staff to stay with the business, and benefit directly from the hard work they put in".
- Richard O’Neil, Chairman of HLM Architects said "The move to employee ownership reflects the principles of collaboration and sustainability which we hold dear".
- Steve Featherstone, director at Llewelyn Davies, said "This people-centric approach is a natural next step that is exciting to see, and will no doubt result in a stronger, more resilient practice built around teamwork".
- Janet Cooper OBE and Bob Grayson founders of law firm Tapestry Compliance said" We wanted to give our employees the opportunity … to have a stake in the business, as well as to shape the future of the firm going forward".
- Tom Steel, director at structural and civil engineering practice Heyne Tillett Steel said: "The move to an EOT safeguards the future of the business, ensures that talent is rewarded and protects the ethos of the practice for years to come."
Fieldfisher helped create the UK's employee ownership policy framework and continues to contribute to its development.
We assist UK organisations involved in supporting the growth of employee ownership and employee share ownership including, of course, the UK's Employee Ownership Association (EOA) and its research partner Ownership at Work (OaW). We are EOA Specialist Advisers and Senior Associates Jennifer Martin and Tamsin Nicholds worked with other Specialist Advisers to prepare the EOA's submissions to the Office of Tax Simplification (OTS) on the future of capital gains tax (CGT). We supported the EOA's EO Boost event last November and our specialist EO Boost page prepared by solicitor Hannah Bignell includes a video featuring partner Mary Erb. OaW Fellow and Fieldfisher partner Graeme Nuttall provides the OaW's semi-regular series of articles "Nuttall Shares".
We also support the White Rose Centre for Employee Ownership and others with research and in developing policy ideas.
We help the Institute for the Future of Work shape a future of better work. Partner, Mark Gearing is a member of the Worked Examples Group, a joint initiative with HM Revenue & Customs (HMRC) to reduce uncertainty for share valuations. Tamsin Nicholds is on the Share Plan Lawyers Group Corporate and Regulatory Committee. We are represented on the Chartered Institute of Taxation's EOT Group and Graeme Nuttall chairs a newly established Employee Shares Policy Forum and in 2021 joined the Co-operative Governance Expert Reference Panel.
Fieldfisher also make its own submissions including to the OTS on CGT and in response to the HM Treasury call for evidence on enterprise management incentives. The Rt Hon Jesse Norman MP kindly referred to the significant influence of the Nuttall Review of Employee Ownership and its author Graeme Nuttall's ideas on employee ownership in his Robert Oakeshott Lecture 2021.
The Fieldfisher Equity Incentives and Employee Ownership Bulletin includes guidance and technical updates (email email@example.com to receive this). Fieldfisher publish regular Insight articles – an overview of these is available in 'Over 50 employee ownership articles by Fieldfisher's experts', including guidance on dealing with the impact of COVID-19 on employee share schemes and EOTs.
Tamsin Nicholds secured an important confirmation from HMRC to protect low paid employees regarding universal credit and employee ownership bonuses.
Graeme Nuttall was honoured to deliver the Gandhi Foundation annual lecture. This led to the EOA, Employee Ownership Wales, Scotland for Employee Ownership, Irish ProShare Association and Employee Ownership Australia (EO Australia) jointly announcing they supported the message in Graeme's lecture, that every employee-owned company should make an overall positive contribution to society and the environment, and to make this commitment in the strongest possible terms. In July 2021 the Japan Employee Ownership Association and Southern Africa Employee Ownership Association joined in supporting this aim.
Shaping employee ownership policy internationally
We co-operate with Rutgers University's Institute for the Study of Employee Ownership and Profit Sharing and the National Centre for Employee Ownership to increase recognition of the trust model in the United States, with the Irish ProShare Association to try to establish the trust model of employee ownership in Ireland and with others, including in India, to share the remarkable success of the UK's EOT.
There are promising signs in Canada and Australia that EOT ownership will take off.
In Canada Social Capital Partners has seen the federal government decide to explore options to unlock the potential of EOTs as part of the country's economic recovery.
Fieldfisher is working with EO Australia and Kings & Wood Mallesons to introduce the EOT model in Australia. Fieldfisher's 'Introduction to EOTs' and other materials are used by EO Australia. Meld Studios received EO Australia's Best SME/Succession Plan Award 2021 for its work in pioneering EOT ownership.
We also take the opportunity to thank all the clients and referees who provided such great feedback for the Legal Directories, such as "Clear leaders in the field of employee ownership" (Chambers, 2021) and ‘The clear market leader in the creation of employee ownership trusts" (Legal 500, 2021).
Please contact any member of the Fieldfisher Employee Ownership team if you are interested in employee ownership events or in receiving our Equity Incentives and Employee Ownership Bulletin.
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