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Stephen Woodhouse interviewed by the Employee Share Ownership Centre

On 18 December 2017, the Employee Share Ownership (Esop) Centre published their interview with Stephen Woodhouse, Partner at Pett Franklin:

In what ways does employee share ownership serve a useful purpose?

Owning shares in your employer creates a sense of joint interest. It makes people owners and allows a form of partnership for all employee shareholders and the wider investor group.

How can we widen and deepen the adoption and use of employee share ownership?

There are a number of ways:

Banging the drum consistently about the benefits of employee ownership. The work of Malcolm and the Esop Centre is an exemplar of this through constant campaigning and lobbying, but all people involved in share schemes can do their bit, particularly in the world of social media.

Co-operation between groups and individuals working in the share scheme industry. Sharing knowledge where appropriate and making the introduction of share plans as straightforward for companies as feasible.

Simplifying legislation and tax rules.

What would you tell someone on the fence about introducing employee share ownership to their company?

Look at the history of success with employee owned companies. Think about the correlation between employee ownership and share price growth. Think about the difference it would make to the way your employees think about the Company if they became owners.

What do you think will change about employee share ownership over the next five years?

I expect a continuing growth in indirect ownership through Employee Ownership Trusts benefiting from the tax reliefs in Finance Act 2014. John Lewis is a lasting testament to how indirect employee ownership can succeed. The tax reliefs in FA 2014 mean that any adviser talking to individual vendors should include an EOT on the menu of possible sale routes. Our experience with establishing EOTs shows that they can achieve the commercial objectives of the vendors consistently with establishing permanent employee ownership and engagement.

What has been the most important development in employee share ownership during your career?

The political commitment from across the spectrum towards developing and encouraging employee ownership. Without the combination of SIP, SAYE, CSOP, EMI and EOT tax reliefs, employee share schemes as we know them today would not exist.

Which change to employee share plans legislation, in the UK or elsewhere, would you most like to see?

The EMI plan is designed for smaller companies and offers the most attractive set of tax reliefs in UK legislation, but the rules are complex with many traps for the unwary. EMI schemes failing on a transaction happening is too familiar a story. The attraction of CSOPs has been emasculated by the erosion of the value of the reliefs first by reducing the value of shares subject to the awards and second by not indexing the £30k limit.

I would like to see the rules for discretionary plans simplified and extended so that they can be used to extend employee participation more widely on a flexible basis.

Why do you think employee share ownership has enjoyed cross-party support in the UK?

Employee ownership has many self-evident benefits. It appeals to the capitalist instincts of parties on the right and wealth sharing instincts of those on the left. Also, the reliefs which have been introduced have been successful with many good news stories.

Which aspect of the Esop Centre do you most value?

The willingness to campaign relentlessly and across a wide range of areas.

Which aspect of the Esop Centre would you most like to change?

Increasing its UK profile outside London – I know that Malcolm has been considering running conferences in locations other than London which would support this.

What is your idea of perfect happiness?

Walking in the country with my wife, two children and two dogs.

What is your most marked characteristic?

I would say logical problem solving. Other people might refer to my colourful ties and socks. My colleagues in the office say that it is my comedy value.

What do you consider your greatest achievement?

I believe that the future matters more than the past so hope that my greatest achievement is yet to happen.

What historical figure do you most identify with?

John Maynard Keynes – his economic analysis is relevant today and could be applied with profit to counteract ten years of austerity.

Which living person do you most admire?

There are many people I respect and who I learn from but all people are good and bad and become more complex as one knows them better, so I would have difficulty in finding one person to admire.

Who are your heroes in real life?

For the same reason, I would not easily identify a hero.

Which word or phrases do you most overuse?

“There are a number of points which are relevant …” followed by listing them.