It started slowly but what was a light shower has built up into a storm... a Quiet Storm you might say. As Campaign just reported, Quiet Storm are the latest agency in the A&M world to announce that they've converted to employee ownership. They follow hot on the heels of a number of other agencies, including The Nursery who announced their change a couple of weeks ago and were helped by Lewis Silkin.
This kind of structure offers an exit for the existing shareholders and a new form of ownership which some businesses are seeing as preferable to conventional sales to the usual suspects. This kind of employee ownership is similar to the John Lewis model, where the employees of the business hold the shares in the company indirectly, through a specially created trust.
Some of the benefits of this from a commercial perspective are...
- Succession planning
- Increased employee retention / engagement
- An exit for the shareholders, which is ultimately funded by the company (although typically paid out over a longer period than a conventional trade sale)
As well as this, there are a couple of major tax breaks offered by the Government to encourage people to consider this sort of model, including capital gains tax exemption for the sellers and the ability to make income tax-free bonuses (of up to £3,600 pa) to employees provided the bonus scheme meets certain criteria.
If you want to find out more about employee ownership trusts, get in touch to receive a copy of our Client Guide.
Peter Dann, chief executive, The Nursery, said: “The people that work here have always been what makes this business so special, delivering expert insight to a wide range of great clients. Handing ownership over to them feels like the right thing to do; it also makes good business sense as we have a brilliant leadership team and a great group of researchers who’ll be even more engaged in the success of their business as well as their clients’.”