Last week, PR and digital consultancy Cirkle launched an innovative new structure. Founder and chairman Caroline Kinsey, previously the sole owner of the business, sold 60% of the consultancy’s shares to an employee ownership trust (EOT), which makes Cirkle's 40-strong team the majority owners, with Caroline retaining a 40% stake.
Lewis Silkin tax partner Matthew Rowbotham and corporate partner Jo Evans, both members of our Advertising & Marketing Sector Focus Group, advised Cirkle on the whole process, including the legal and contractual changes required to establish the new EOT and the associated changes to corporate governance.
EOTs are becoming increasingly popular. The benefits of this relatively new model include improved employee engagement and new opportunities for second-generation management teams to take a business to the next level. Founders and leaders of advertising and marketing agencies are adopting new mindsets about legacy, expansion and impact, with the transfer of ownership to employees becoming an increasingly attractive option.
"The great thing about an EOT is that I am transferring a majority shareholding but preserving the integrity and continuity of the business and rewarding the contribution and loyalty of staff. As an agency recognised for our employee engagement, our culture and a real belief in and focus on our people and our team, this was the right structure." Caroline Kinsey, Founder at Chairman at Cirkle