There has been shock and awe in the micro verse of animation recently with the announcement that Aardman founders Peter Lord and David Sproxton were handing ownership over to their employees. Now this may sound straight forward but it’s actually a lot more complicated than just that and very good strategic business for the company to do something like this.
First of all Aardman is probably one of the biggest independent animation studios in the world. They have their hands in films, television, video games, books, and even offer a certification course in animation! The company was founded in 1972 by Peter Lord and David Sproxton and so named after a character in one of their early animations. The company later went on to collaborate with famed animator Nick Park who would become an added bonus to the company. As a company they have won 4 Oscars and 14 BAFTA awards. The productions of Wallace and Grommit, Shaun the Sheep, Chicken Run, and a whole slew of other shows, films, and content has made them one of the powerhouses in the stop motion animation field.
So why would a company that is successful and so legendary want to give itself away to its employees? Well first lets snip that false impression in the bud. Peter Lord and David Sproxton are not giving away the company. They are selling their controlling interests in the company to a trust which will be formed to represent the employees. Now you should be asking, “where does this money come from?”. The short answer is from Aardman’s cash reserves. Lord and Sproxton have been thinking about this for a very long time and have been building up a nest egg in the company accounts for just this very thing. So essentially Peter Lord and David Sproxton will sell their ownership in the company to the company.
Now let’s talk about what that means. First and foremost the British Government has allowed this type of thing to happen because it’s great for employees. It’s also great for the owners of the company to sell to the Employees Trust because of very large tax breaks. So a Trust which essentially is a group of people that act as the controlling entity of the company; also known as a board of trustees, will over see the operations of the company and make the decisions on behalf of the employees. About know you should be asking “do the employees have a voice if the trust is in charge of the company?”. Short answer, no. In the short term the company will be run by the Employees Trust who will basically decide what gets made and how. Depending on how the structure of the agreement is built. In an EOT (Employee Owned Trust) a board of trustees are in control of the decision and the shares are held in an account on behalf of the employees. In an EOST (Employee Owned Shares Trust) the employees would be able to purchase stocks of the company and have part ownership of the company. This is still not clear in any of the article currently out about Aardman’s contractual deal, but employee’s holding shares of the company is basically what we would hope to be the end result. Most articles and information about the transaction leaning towards an EOT however.
What’s still to be answered is if Aardman has a trust set up in a way that will allow the employees get their shares such as an EOST (Employee Owned Shares Trust). If they do use this model will they be handed out like tokens of achievement or will they be able to buy them directly with cash transactions? What if an employee works a day and buys a ton of shares with money they have in the bank and then quits? What if ____?
Actually, this is all contractual business stuff that is typically hush hush and the only way we will really know is through either a press release or employee spilling the beans. The really good thing to know is that Aardman as a company is one of the best in the world for how they treat their employees through both wages and benefits. Peter Lord and David Sproxton are very honest and dedicated to insuring that they have a company and a team that is honest and supportive of each other. So the announcement that an Employee Trust will be set up for their employees is a great move in the right direction.
Now the bad side. Who controls the board? Historically the board of directors or trustees in any company will make very bad decisions. It’s inevitable. The board typically has to answer to share holders and with such a small company a majority of share holders can band together to act and reject the boards decisions and also eject board members. But who are the share holders? The current problem is we don’t know the business structure of how the Aardman EOT will be setup. If employees cannot own shares then what? Also, can employees sell shares to outside interests? Oh… So many questions….
So here’s the structure that we know now.
Aardman will have an EOT (Employee Owned Trust) that will be controlled and have the deciding vote in all business practices by a Board of Trustees. This board will be Carla Shelley (executive director, feature production), Heather Wright (executive director, partner content), Kerry Lock (finance director), Paula Newport (director, people and culture), Sarah Cox (executive creative director – intellectual property development) and Sean Clarke (executive director, rights and brand management). Peter Lord will stay on for a bit to help in decision making and David Sproxton will be replaced in 12 months with a managing director who will help with overseeing the operations of the company. Sproxton will consult from that point on and intends to be a contributor and creator in the company after that.
All of this sounds great in the news, but until we really know the structure of the transition we are just giving best wishes at this point. Currently, Aardman has two films in the pipeline that we know of. There is Farmageddon: A Shaun the Sheep Movie Sheep and Chicken Run 2 which is in development. Add to this all the various productions from advertising to video games that the company is currently working on. We have our fingers crossed on this one and hope the transition is smooth and in the best interests of the employees at Aardman. Also, we’d like to applaud Peter Lord and David Sproxton for making this decision and providing one of the best work environments for animation in the world. Their hard work in this industry is truly an inspiration to us all in the industry.
To learn more about what a EOT (Employee Owned Trust) is, please checkout the following links.
(EOST) https://www.investopedia.com/terms/e/employeeshareownershiptrust.asp
https://www.insider.co.uk/special-reports/employee-ownership-trusts-advice-rsm-12576914
