The Folio Society Announce Move To Employee Ownership Trust

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The Folio Society Announce Move To Employee Ownership Trust

1icewindraider
Bewerkt: dec 1, 2021, 8:57 pm

2sdolton
dec 1, 2021, 9:13 pm

>1 icewindraider: interesting, thank you for posting this. Will be very interested in what this means for their future publishing.

3Jayked
dec 1, 2021, 9:33 pm

"The CGT relief makes the EOT a particularly attractive option for business owners looking to sell their company. The alternative solution would be the sale of shares through conventional means, which after entrepreneurs’ relief would result in a 10 percent CGT rate."
There are also tax benefits for the employee owners if the company makes a profit -- perhaps an incentive to publish more popular material.

4wcarter
Bewerkt: dec 1, 2021, 9:44 pm

The Gavron family has owned the Folio Society for the last 40 years. I suspect that after the death of Baron Robert Gavron in 2014 the family has struggled a bit with management issues. A new CEO was bought in who made radical changes that upset a lot of people initially, but the FS seems to have settled down to a successful new norm, and the Gavron family will be pleased to pass the ownership reins across to their employees.
This is a good time to make the change as the FS has become remarkably popular in the last two years with more people reading during lockdowns and more money available for luxury spending with the dramatic reduction in international tourism.
This will probably make the FS an even more desirable place to work, and may attract some excellent production and management talent.
The start of the fourth era for the society : Ede (1947 to 1972) - Letts, Lynner (1972 to 1982) - Gavron (1982 to 2021) - staff (2021 to ?).

5antinous_in_london
Bewerkt: dec 2, 2021, 9:44 am

>4 wcarter: As the employees directly benefit from any increased profitability do you think this will encourage even more ‘populist’ titles & fewer (less profitable) niche publications?

6elenchus
dec 2, 2021, 9:43 am

Generally I'm encouraged by the quality performances generated by non-profit organisations here in the US, part of a trend (as I understand it) of professionalisation among the non-profit industry in parallel with increased use of the format for a variety of purposes. I'm most familiar with health care, but the trend is broadly evident.

I've assumed the trend is found outside the US, as well, and perhaps more widespread and of longer gestation -- that said, an EOT is not identical with a non-profit, but I'm not clear on the distinctions. The general approach of turning profits back into the company and mission, including benefit of employees, is what I find interesting.

FS will be a key test case for me to follow.

7RRCBS
dec 2, 2021, 9:56 am

I think it’s a cool move. Whether or not they move to more popular titles, unsure. It might make them more profit short term, but maybe less long term followers. Don’t necessarily see there would be more risk of this as an EOT than before.

8abysswalker
dec 2, 2021, 10:15 am

It is worth noting that employee ownership doesn't necessarily imply that the new employee shareholders will be more involved in day to day or strategic management decisions, though presumably they would have more potential recourse in the case of dissatisfaction. Will depend on the specific governance structures (for example, the role of the Employee Council and the voting rights of shares). Either way, they should have greater incentive alignment (share in upside and downside), just like stock options compensation packages.

9SDB2012
dec 2, 2021, 1:52 pm

>8 abysswalker: In the US an ESOP is a way for an owner to cash out while maintaining control while rewarding long-term employees. It can be great for all stakeholders in the right circumstances. I've looked into it as a potential exit from my business when the time comes.

10LolaWalser
dec 2, 2021, 2:46 pm

>7 RRCBS:

Agreed. Finding someone more "popular" than Agatha Christie (still the world's best-selling author of fiction), or trashier than Ayn Rand and Ian Fleming would be quite a task!

11antinous_in_london
dec 2, 2021, 4:09 pm

>10 LolaWalser: I guess its all about the proportion of ‘popular’. Those authors are still very much in the minority of what FS publish. Would there ever again be a Letterpress Shakespeare or a complete set of Trollope etc.

When we get an announcement of a Folio set of the complete works of Jackie Collins i will know that all is lost !

12jveezer
dec 2, 2021, 4:44 pm

Was hoping this meant more of a co-op arrangement where there is direct ownership by employees of company stock and democratic selection of published titles. But that doesn't sound like what this is. This sounds more like profit sharing, not that that is bad.

13wdripp
dec 2, 2021, 8:49 pm

Honestly all I can think about when I read this is the staff they let go a few years ago who seemed much loved and valued by the dismemebered who were able to visit the reading room.

14boldface
dec 3, 2021, 11:00 am

When I first read this I thought it was science fiction, but actually I'll be very interested to see what effect this has, if any, on the future direction of FS offerings from the customer's point of view. Good luck to the employees!

15CarltonC
Bewerkt: dec 9, 2021, 8:57 am

Companies House filing dated 30 November that Jeremy, Jessica, Sarah and Katharine Gavron retired as directors of the FS. At the same time, Ms Urmi Dutta-Roy, Ms Emma Lucia Lawson, Mark David Mainstone and Thomas Winfield Walker were appointed as directors.
Joanna Reynolds and Brian Edwards remain as directors.
This may be the move to an Employee Ownership Trust.