Hi all,
Keen to find out from ozbargainers about their experiences working for an employee owned company? Pros and cons? Any tax benefits? Any risks?
Did some research as well, just wanted to get some thoughts from others.
In my case, this is in relation to an engineering company.
The future, if we make it there.
Wouldn’t it be considered a partnership under current legal structures? If so, many partnerships end up into major disagreements and dissolution including marriages.
It would depend how many employees are involved, but also, partnerships are a bit messy the bigger they get. At some point it becomes appropriate to incorporate. This also allows for various levels of ownership, and continual change of ownership if people enter and leave the business and want to participate.
If you are talking about a partnership / equity:
Experience
- good if you are part of the ownership group; more incentive to work harder and longer (expect this as well)
- the focus is a lot more on money (making it, spending it, saving it) as there is a closer relationship between profit and owner pay when compared to a salary position
- expect to be called out more on performance. As others are invested in your work, people will let you know if you're screwing them over with your mistakes / low effort
- be ready to drink from the cool-aid
- as an employee (with no equity) expect to be ridden hard (i.e., work as hard and as much as the owners) but with none of the equity rewards
Benefits
- you are probably closer to the decision maker / owner than if it was a regular corporate structure
- the organisation likes to think of themselves as "family" (will highlight this is not a benefit in any way)
- you can be reporting to a part-owner who loves to spend money on their employees (unlikely)
What is employee owned company?