Australia's First Company Owned by an Employee Ownership Trust: Meld Studios
On June 24, 2021, Meld Studios announced that it was transitioning ownership from its three founders to an employee ownership trust (EOT) that owns shares on behalf of all 22 Meld employees.
The adoption of the EOT is the result of a year-long effort to adapt the EOT model to the specifics of Australia's tax and regulatory environment. Meld worked with Graeme Nuttall of the UK law firm Fieldfisher, who has been leading a global effort to introduce EOTs (see his paper An Introduction to the Employee Ownership Trust). Australia's Employee Ownership Association (EOA) also supported Meld's efforts, and EOA's chair Andrew Clements says, “There has been significant interest from small businesses following our work in relation to EOTs. It is a model which is regarded as providing a very effective tool for employee ownership without the complexities of allocated employee share plans."
The EOA defines an EOT as "a trust established by a company to hold equity on behalf of its employees, with usually all—or at least a majority—of the shares being held by the trust." In the case of Meld Studios, the EOT will involve a phased transition over time of ownership from the studio's three founders, Janna DeVylder, Steve Baty, and Iain Barker, in transactions financed by the company's operations.
In the case of Meld Studio, the EOT structure also came with other structural changes, including:
- "legal documents, including a Constitution, Trust Deed, and Founder Buyback Agreement"
- "a Trust and Company board, with elected Employee Directors on each"
- "an Employee Council, which we call the Meldster Forum"
- "six business functions, which we call Meldings, to drive and coordinate our shared effort to achieve Meld’s mission and business success."
EOTs are also being created in the United States. To stay informed about EOTs in the United States, contact Loren Rodgers (LRodgers@nceo.org).