ShopBot Tools, producer of CNC machines, has recently restructured as an Employee Ownership Trust (EOT). Founder and Board Chair Ted Hall said the move was designed to position the company for long-term success by empowering employees while providing liquidity for shareholders.
“The EOT is a vehicle to keep ShopBot thriving, innovating, and active in the community while rewarding the people who have built it over the years including recognizing shareholders' investment..”Hall said in a statement.
An EOT is a trust that holds the stock of a company for the benefit of all employees as a group, not as individuals. Employees participate in the financial benefit of ownership by regularly receiving a payout of a portion of the company’s operational earnings, much like a dividend. Unlike in an Employee Stock Ownership Plan (ESOP), the most common form of employee ownership in the U.S., employees will not receive their own individual equity in the company as part of a retirement program. EOTs offer flexibility in terms of employee involvement in governance; the ShopBot EOT creates an Employee Governance Committee that helps structure employee voice and engagement, according to the company.