Interesting news this week in the employee-owned sector. Eaga, who deliver heating and renewable energy services to businesses and communities, have been bought by Carillion, one of the UK’s largest providers of support services for the construction industry. Eaga’s shares were valued at 120p, with Carillion paying around £307m for the company. The largest shareholder in Eaga is the employee benefit trust, with 37.5% of the shares. The employees thought they were in line for a massive payout on their shares (between £28,000 – £30,000 per employee), however the trustees decided to accept shares in Carillion (valued at 390p at time of writing) instead of cash.
Understandably, this has angered some employees. The purpose of a trust is to act in the best interest of its beneficiaries and who could argue that £30,000 isn’t in someone’s best interest? What the trustees have done is protect the employees’ stake in the company, rather than making a fast buck. As Ken Temple, chairman of the employee trust, stated: “There are people who are very disappointed we haven’t simply given them the money,…One point to remember is in a trust the assets of the trust don’t belong to the beneficiaries.”
It would be interesting to hear if the majority of the employees agreed with the decision of the trustees. Eaga’s situation is another example of the need for high levels of employee engagement and employee financial paticipation in a company. These concepts are not mutually exclusive and are key to the success of an employee owned company. Clearly, some of Eaga’s employees desired nothing more than to take the money and run, while others were satisfied to retain a large ownership and governance stake in the company. It will be interesting to see how the future round of redundancies tests the employee trust. Watch this space.