Family Owned Business | SIP, EMI, EBT

Creating an employee ownership culture in a family owned business

Background and objectives

The main shareholders in this long established procurement services company had a number of objectives:

  • maintain ultimate family control
  • create a strong culture of employee ownership and involvement over the long term
  • shares for employees to be provided by the majority shareholder, without impacting on the ownership of other family members
  • with no exit strategy in mind, employees should be able to acquire shares, with the attached voting and dividend rights, providing them with a meaningful stake in the company
  • the ability for all employees to be involved, with additional shares available for key managers.

How RM2 helped

We identified and designed the best share plan structure to meet the family’s objectives. We implemented the various plans, including agreeing valuations with HMRC. Over the lifetime of the plans – they lasted more than 10 years – we administered the schemes, including regular valuation agreements, and arranging the transfer and sale of shares between the founder shareholder, the trusts and the employees.

RM2 helped with the design and implementation of the following:

How it worked

How it worked


The family was very committed to the long term outcome of the share plans and over the years achieved their key objective which was to create a company whose staff were committed, loyal and tied in as owners of the business.

Ultimately, a buyer approached the company and a decision was made to sell the business. By that time, the family’s stake had been reduced to around 80% – with the original owner reducing his own stake more highly than the other family members by selling his shares to the trusts over time.

Meanwhile the employees together obtained a 20% stake in the business.

The difference RM2 made

This was a hugely successful project that reflected the importance of commitment to employee ownership in the long term. Even had a sale not arisen, the company had significantly and permanently changed its culture, impacting positively on the staff and benefiting from reduced staff turnover and a real feeling of ownership among the workforce.

The sale of the business provided a major financial reward for the employee owners, but this was almost secondary to the previous years where employees had built up an interest in their shares, including the ability to receive dividends over that period.

RM2 was proud to have been involved in the creation of an employee ownership culture that made a real difference to the original owners and the employee shareholders, including helping them to build a successful business over the years and value for employees at the time of exit.