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EFES NEWSLETTER - OCTOBER 2025
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The
ESOP model has in the United States been used since
1974, over 50 years, to organize the transfer of thousands
of companies to employees. What has made it so successful?
Employees become owners of their company without having
to spend any of their own money.
There has been nothing more effective for introducing
employee share ownership in SMEs. But unfortunately,
nothing similar existed in Europe.
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Then
in 2014, Great Britain introduced the Employee Ownership
Trust (EOT) model, which is much simpler than in its
US counterpart. With this in common: this model also
means that employees don't have to pay anything to become
owners of their company.
After just a few years, it has become obvious: the number
of business transfers to employees grew much faster
than in the USA. In 2024, for example, there were 600
EOT transmissions in the UK, compared with 300 ESOP
transmissions in the US.
Employee share ownership has made remarkable progress
in SMEs in the UK. At present, of every 100 business
transfers, eight go to employees. These employees generally
become 100% owners of their company (average size: 72
employees). We're rapidly moving towards a situation
where one-in-ten SMEs will be employee-owned.
The simplicity of the European system has thus won over
the US ESOP, which is more ingenious and refined, but
also more complex.
How should we react on the other side of the Atlantic?
We could fear the worst, given the world we live in.
Deny the obvious, stomp our feet, invoke the power of
a bygone past - why not even tariffs? But not at all.
Pragmatism and cool heads prevailed. Today, the EOT
model is presented alongside the ESOP model in the employee
share ownership panoply.
The National Center for Employee Ownership, the leading
organization for employee ownership in the US, recently
published a practical guide to the EOT model ("Using
an Employee Ownership Trust for Business Transition").
This echoes the reference manual for managing an EOT,
a new edition of which has just been published in the
UK ("Employee-Ownership
Trusts").
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Press
review
A
selection of 26 remarkable articles in 7 countries in September
2025: Canada, Czechia, Germany, Spain, France, UK, USA.
Canada: Employee Ownership Trusts are the simplest
way of transitioning ownership. The number of EOTs is increasing.
Czechia: Still focusing on stock options for startups.
The ultimate new legislation will finally be in force in 2026.
Germany: The same startup lobby at work.
Spain: New employee share plan for Ebro Foods.
France: New successful employee share plans for Suez
Group, for Veolia, for Adeo. The number of business transfers
remains low compared to neighboring countries. A historic
milestone in Paris.
UK: Around one hundred new business transfers to employees
every two months. Thanks to the Employee Ownership Trust formula,
two new SMEs are transferred to their employees every day
now.
This time, among others, the cases of: Hiyield Hands Digital
Studio, The Software Bureau, Peak Retreats Ski Specialist,
Hallam Marketing Agency, Kinetic Demolition, Golley Slater
Marketing.
There are now nearly 2,500 employee-owned businesses
in the UK, with 560 new transitions in 2024.
Misconceptions
about selling your business to your employees.
USA: Also in the USA, Employee ownership trusts (EOTs)
are an increasingly common way for sellers of closely held
companies to transition out of ownership.
The full press review is available
on:
https://www.efesonline.org/PRESS
REVIEW/2025/September.htm
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A
political roadmap for employee ownership in Europe
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