I've already loved these guys, now my admiration just increased. Reading HN we start to think that life is to get bigger and richer. These guys spend their time spreading intelligence, art, and fun.
That is the point of a worker coop just that the rewards are distributed equitably :-) an d yes that does mean the cleaner / office admin get as much as the CTO
I don't believe salary will be equal-- the company will still pay out salaries; owning equity and receiving dividends from that equity is a different matter. Here's a source with much more info on the structuring: https://www.theguardian.com/film/2018/nov/10/wallace-gromit-...
It depends on the workers themselves. The salary policy is democratically decided. For example, a very well known large scale worker-coop umbrella Mondragon does this:
At Mondragon, there are agreed-upon wage ratios between executive work and field or factory work which earns a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. That is, the general manager of an average Mondragon cooperative earns no more than 5 times as much as the theoretical minimum wage paid in their cooperative. For most workers, this ratio is smaller because there are few Mondragon worker-owners that earn minimum wages, because most jobs are somewhat specialized and are classified at higher wage levels. The wage ratio of a cooperative is decided periodically by its worker-owners through a democratic vote.
Compared to similar jobs at local industries, Mondragon managers' wages are considerably lower (as some companies pay their best paid managers hundreds of times more than the lowest-paid employee of the company) and equivalent for middle management, technical and professional levels. Lower wage levels are on average 13% higher than similar jobs at local businesses. Spain's progressive tax rate further reduces any disparity in pay.
Modern tech companies are halfway there: contract out low end support functions and high end specialty expertise, so that actual FTEs are paid substantially the same.
But that was pure gold: Darwin as a villain! Nobody ever represented Darwin this way. One of my heroes, and one of the greatest human minds as a cartoon bad guy. Genius!
Sorry for the naive question, but how does this work? So let's say the employees now are part of this trust which owns 75% of the shares. What is the benefit? The trust owns the shares legally correct? Is it some sort of profit sharing scheme? I assume you don't hold on to the shares when you leave the company (as they are with the trust)? Does every new hire dilute the ownership?
How does this actually impact the day to day employee if at all? My wife is part of an "employee" owned company and all it really means is more responsibility without any real benefit other than a paltry profit sharing payout of a few hundred bucks each year. So I am a little skeptical.
In this case I think the primary reason is to protect the company.
Aardman is probably a fairly hot company right now. Probably prime for a purchase by one of the big studios. But then it would most likely just get broken up and turned into a mill for churning out look-a-like content. Or possibly even just a logo stamped on contracted out content. I believe the founders have been fairly clear in the past about not being interested in selling.
While the founders still own it they can just turn down these offers and stay independent, but soon they are going to retire and will have to give up ownership to someone. And that someone might just decide to take the big payout and sell. So this is their way of ensuring that the company continues to run as it is for the good of the employees. It can now only be sold if the majority of employees vote to accept the sale, and if they do at least they'll also be the ones to get any associated payout not just some profit driven owner.
> It can now only be sold if the majority of employees vote to accept the sale
Maybe I'd be wrong, but I feel like it would be far easier to buy a company from a group of middle-class minority shareholders than a couple wealthy owners. A big payout sounds easier to refuse if you're already satisfied financially.
Are we sure that remaining independent is the motivation here?
With 140 employees and assuming equal distribution of the 75% I believe they were giving out, it's around .5% ownership or 1/200. Not huge, but at a $100M buyout offer (didn't they have $25M in sales, and growing?), we're talking $500k a head. Even at a $25M buyout, its $125k a head. That type of money is enough for a middle-class family to usually succumb.
Those numbers seem rather high. Profits are on the order of £2.5m/year ~(3.25 million $) so / 140 and your talking a 23k/year annual bonus. On top of that selling the company likely means the jobs not only pay less, but are also worse.
Either it's hard to create the content, or it is not.
If it's not hard, the studios don't need to buy Aardman. The IP they have is negligible, and no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway).
If it is hard, the studios would need to keep the employees who manage to do this hard thing, and it would be in the purchaser's best interest to manage it as if it were a butterfly.
It is hard and risky to create quality animation movies. But it is pretty easy to milk a brand - just witness all the cheap sequels and spin-offs Disney have produced based on classics like Bambi or Cinderella. Disney (or someone similar) might very well buy Ardman to milk the IP.
> it would be in the purchaser's best interest to manage it as if it were a butterfly.
Maybe so, but there is no guarantee they will do that. Remember that Disney fired the whole hand-animation department, despite the whole company being build on hand-drawn animation.
> and no one watches a movie because it's made by Aardman
From a UK perspective I think you're pretty wrong here. Aardman cant be separated from the style they've built over the last 30 years, and it's incredibly popular. Even if someone didn't recognise the name, you could show most people a even a single frame from one film and they'd recognise what it was immediately.
Maybe it's not known by name, but there's certainly a "trademark" in the design & animation that I'd guess is widely recognized around the world(e.g.: I'm in Brazil and recognized only when seeing the article image), so I imagine there's a following. If you add that it's like an early hooker(i.e.: most watched as a child), then there's probably another multiplier for the brand/studio value right there.
This sounds like exactly the attitude that Pixar bet against and won, as described in Lawrence Levy's book[1]. At the time it was thought that animation from anyone other than Disney had no goodwill attached to it.
Pixar was able to disprove that with their franchises and I think the same is true for Aardman with Wallace & Grommet and the spin off Shaun the Sheep series.
Aardman have a look to their work that people know and love.
If it looked exactly the same, but was not made by Aardman, would you not have gone seen it? How much is that marginal extra chance worth, ceteris paribus, that you would go see it because you recognize the name, exactly? Now multiply that by the proportion of people who would actually recognize Aardman as a brand name (i.e. less than 1.0).
Note that we're not talking about just the style of how the movie and the figurines look like, because the assertion which we're discussing stems from the axiom that it's easily reproducible. If it is not, then it drops to assertion #2 which does not talk about IP.
That is the value of the IP of Aardman, and I'd wager it's not worth an amount that would make a transaction worth it for the big studios talked about by the grand-OP (>$100MM).
Without seeing a trailer how would we know it looked exactly the same? Looking the same counts for nothing without script, voice acting, production values etc. Just look at some of the cheap junk Disney have turned out.
Aardman had almost complete 100% awareness in the UK thanks to Wallace and Gromit, and use of a national treasure or two for voice acting. The Creature Comforts ads that must have run for a decade or more - and still get voted in the top 5 best ads 30 years later, along with their other shorts and films. So it's difficult to generalise for areas that don't have the same love and awareness.
After 30+ years of Wallace and others, along with their production values and including plenty for the adults make it a safe bet. Like you'd also expect from Pixar. Thoroughly good it was too.
Taking the kids to a Disney movie is far more likely to give nothing to the parents, or turn out to be one of their cheapie efforts.
> The IP they have is negligible, and no one watches a movie because it's made by Aardman (99% of the people would not know who they are anyway)
I'm guessing you're outside of the UK? I'd put my money on you being to ask 10 people at random here and at least half of them recognise the name for Wallace and Gromit if nothing else
First the IP is not negligible, for a company like this the IP is their company.
Second Even if this mythical company buys them and has ever intention of "keeping the employees" and "allowing the company to run as before" a company that is consumed by a larger organization will over time loses its identity, it does not matter if both parties desire to "keep the magic" it never works. EVER. HR polices, Legal, management style etc from the larger parent ALWAYS makes it way to a subsidiary.
Hey, essentially this means that stakeholders are now the shareholders. In other words, they now became a worker-cooperative; they are the 1 in 8 worldwide that don't sell their time and surplus value.
I worked with some consultants who did this sort of thing for companies, and their main spiel was...
Sometimes a company’s owners have no one to pass their ownership down to (not having kids or their kids not wanting to take on the family business, etc). So they either sell the business off or do layoffs and liquidate and move on.
There have been instances where companies that employed a good amount of people in a town shut down due to this.
Making a company employee-owned is one way to keep it alive and operational. Sometimes it’s a better option than selling the ownership to a third party.
> Windings is a leader in the design, test, manufacture and support of custom electric motors, generators and related components including rotors, stators, lamination stacks and insulation systems.
> Windings business structure was converted to an Employee Stock Ownership Plan (ESOP) in 1998 and we have been 100% employee owned since 2008.
An ESOP is used to allow the owners to sell their stock to employees. The owners benefit by getting a tax break, and the employees benefit because they're allowed to pay for the stock out of the future earnings of the company rather than needing to pay out of pocket. Most co-ops are formed using ESOPs, but not every company that does an ESOP becomes a co-op. For example, a company could just sell 20% of its stock to its employees but still remain largely owner controlled.
Even if you start a company knowing you want it to be a co-op, the best practice is currently just make it a C Corp and keep it that way until it's profitable and stable and no longer growing quickly. Unfortunately there currently aren't really good ways to finance co-ops, so creating a traditional company and then later converting it via an ESOP seems to be the recommended practice. I think there are some people working on better alternatives, but I don't follow the space super closely.
I work for a ~80 employee company, the two founders probably want to retire in 5-10 years, and this is an important topic for us.
What about the monetary value of the company, do the employees buy it (probably too expensive, cheaper for the employees to shut it down and form a new company with the same people) or is it usual for the founders to give away the companies? Do they just keep a good percentage of the shares to receive dividends?
> What about the monetary value of the company, do the employees buy it (probably too expensive, cheaper for the employees to shut it down and form a new company with the same people) or is it usual for the founders to give away the companies?
It’s not unusual for employees to not have enough money to buy shares outright, which is usually why business owners don’t even consider this type of arrangement. However the good thing is that these arrangements are usually structured in such a manner that the employees gain ownership via transactions from future earnings. So founders aren’t giving anything away.
In Italy the gov't has policies for this kind of situation. The Labour party is pushing for the same called 'Right to Own'.
Personally, I think the employees have the right to get ownership. Nothing gets produced without human labour. They may have ownership of the factory (by some divine reason), but nothing gets produced without labour (including management labour).
Was going to say that Co-operative is probably a much more well-known UK company of this type, but checking that now, I just learned that Co-operative is in fact a brand name for a group of such companies.
I always thought it was amusing that it was Waitrose (the upscale food shops owned by Jowhn Lewis) that came to the rescue of the Prince of Wales' efforts to create his own food brand with Duchy Originals.
Mind you - considering who shops at our local Waitrose this is no real surprise.
You get your shares (there is no vesting) on day one of becoming a member - you don't automatically become a member there is normally a probation period.
Its unclear from the article and the Guardian article it references exactly what is happening.
Setting up an EBT is a common way that worker coops are set up - for a worker coop its one member one vote and the equity is split equally between th emembers / cooperators
Its not clear if they are converting to a worker coop or not unless the workers control the trust its not a coop.
One of the benefits of an EBT is tax advantages especially if the coop gets taken over - preferably not mondraggon :-)
It's knee-jerk accolades. Shares held in a trust with workers being beneficiaries would just enrich trustees. In fact the workers now have even less say to what is happening in the company because it costs enormous amount of money to make trustees to do anything they do not want to do.
I hope to see more of this in the future, although from a different angle. As more and more business owners are retiring, it is a great time to give their business to their employees -- especially in the form of a worker cooperative.
If only all companies did this, maybe we could influence our government the same way malicious special interests do right now. There would finally be representation.
I just recently learned about ESOPs: a few weeks ago I visited Graybar's [0] website, and learned that this large electric/etc distributor has been employee-owned since the 1920's.
Louis Kelso was "the inventor and pioneer of the employee stock ownership plan (ESOP)" [1]. Kelso wrote *The Capitalist Manifesto" [2] about employee-ownership in 1958.
I think most businesses would run better if their employees were more invested in their success.
Since about 12% of world-wide population is part of a coop[1] there are a lot of statistics. Of interest around stability[2]:
- The economic activity of the 30,000 cooperatives in the U.S. contributes an estimated $154 billion to the nation’s total income. The co-ops have helped to create over 2.1 million jobs, with an impact on wages and salaries of almost $75 billion (Deller et al 2009).
- Cooperative businesses have lower failure rates than traditional corporations/small businesses: after the first year (10% failure versus 60-80%) and after 5 years in business (90% still operating versus 3-5% of traditional businesses) (World Council of Credit Unions study in Williams 2007). Evidence also shows that cooperatives both successfully address the effects of crises and survive crises better (Borzaga and Calera 2012).
- Since most cooperatives are owned and controlled by local residents, it is more likely to promote community growth than an investor-oriented firm. Since cooperative business objectives are needs oriented, cooperatives are more likely to stay in the community (Zeuli, Freshwater et al 2003).
- Cooperative businesses stabilize communities because they are community-based business anchors; and distribute, recycle, and multiply local expertise and capital within a community. They enable their owners to generate income, and jobs; accumulate assets; provide affordable, quality goods and services; develop human & social capital (Gordon Nembhard 2002, 2004b, 2008a; Fairbairn et al 1991; Logue and Yates 2005).
- Cooperative start-up costs can be low because: are eligible to apply for loans and grants from a number of federal and state agencies designed to support co-op development; are often provided relatively low cost loans from non-governmental financial institutions like cooperative banks because they are chartered or established to do so (Zeuli, Freshwater et al 2003).
- WAGES in Oakland CA finds that after owning the house cleaning co-op the worker-owners’ median income increased to over $40,000 (before the co-op the Latina owners had a median income of $24,000). Ownership in the co-op has put their income higher than the national average of $38,000 for Latinos/as (http://www.wagescooperatives.org/economic-empowerment)
- Food co-ops spend more revenues locally, buy more products locally, buy more organic produce, recycle more plastic, and create more jobs than conventional grocers. For every $1,000 spent at a food co-op, $1,606 goes to the local economy; for every $1 million in sales, 9.3 jobs are created (Yes! Magazine 2013).
Not to be a cynic, but the owner can get a lot of benefits (including tax benefits) from selling to their employees versus an outright acquisition by an outside party.
Basically, the owner sells their shares to a trust, which then pays the owner and the employees gain ownership over a period of time as the financing is paid back.
You mean Disney & NBCUniversal. Both have been acquired and lost most of what made them famous (creativity) in the process. I think that's what Nick Park is trying to avoid. I'm assuming he'd get more satisfaction out of seeing Aardman thrive independently while he rides out his retirement.
Selling :-) in the UK for small < 30mill you can use an EMI share scheme to gift the shares or grant options to the employees with no income tax liability and Entrepeneaures relief applies so 10% CGT rate.
Off topic, but the cookie consent popin wants me to allow a total of more than 2500 different cookies? Only a few are actually created, but come on, do they really partner with thousands of 3rd parties for my precious data?
Share the means of production! We need less centralized planning in companies. And the only truly way to achieve that is to share the ownership. Partners not the Master-Slave trickery that we call Employment.
Aardman Animation, the stop-motion studio behind the Oscar-winning Wallace & Gromit shorts and Chicken Run, has brokered a new deal that puts ownership of the studio in the hands of its devoted team of employees. Founders Peter Lord and David Sproxton, who started the company in 1972, has ordered 75% of shares [1] placed into a trust, where they will be held for Aardman’s workers.
Lord and Sproxton have no plans for retiring anytime soon, but they wanted to shift their priorities at the company. Lord said, “We’ve spent so much time building this company up and being so profoundly attached to it. It’s not a business to us, it’s everything, it’s our statement to the world. Having done that for so many years, the last thing we wanted to do was to just flog it off to someone.”
Sproxton added, “And we wanted to make sure they are all engaged in this employee ownership as well,” assuring their team that they won’t be in danger of a big studio buyout. Both men are committed to keeping Aardman’s uniquely close-knit culture. “There’s no real concern about the culture of the people, it’s just an asset that can be sold on in years to come,” he said of a corporate acquisition.
The studio is located in Bristol, U.K., where a team of 130 staffers run the beloved stop-motion animation company. During production, that number can swell to nearly three times that size for a feature-length film. Aardman is currently in production on <em>Farmageddon: A Shaun the Sheep Movie, which will be followed by the long-awaited Chicken Run 2.
Sproxton and Lord will join director Nick Park on Aardman’s new executive board of directors. Park, who has been with the company since its early days, directed the Oscar winning Wallace & Gromit shorts, which include The Wrong Trousers, A Close Shave and the film The Curse of The Were-Rabbit, which won Best Animated Feature in 2005. Park and Lord co-directed 2000’s Chicken Run, which remains the highest-grossing stop motion animated film of all time.
Lord said of his and Sproxton’s future with the company, “We’re not quitting yet, we are doing this because we love the company and because we love it we think this will be the best things for it. This is not about David and I leaving. It is a continuity deal. We always believed that independence was our strong suit. We didn’t have to dance to anybody else’s tune and could make our own decisions.”
This move towards continued independence and self reliance follows Aardman’s carefully hand-made approach their projects. Their films are beloved for their handcrafted aesthetic and their commitment to British humor and culture. Their latest move to share ownership ensures that Aardman will remain as charming and unique as they always have been.
You can usually just open the developer console and delete the modal element, however this site also disables scrolling somewhere it seems. Couldn't figure out where quickly, so I just read the article in the element inspector.
Most sites that disable scrolling like that have just put overflow: hidden on the html or body element.
To do the same thing in Chrome you can use a custom CSS extension. The thing I don't like about that is that you have to give the extension carte blanche in terms of permissions, and I don't trust that the extension won't be sold to a bad actor.
Employee ownership is a very old concept. All studies have shown that they are risk averse and have poor growth. I’d love for this to work, but you can’t fantasize your way to results.
Market failure got us to 400PPM. The externalities of carbon and methane pollution have not been properly priced in. That can be resolved with a market mechanism - a carbon tax.
The free market has also brought us widespread electric cars, solar panels, gas power plants. The very things with which we will combat climate change.
Socialism has brought us expanding populations globally, by offering free food to people who are not productive enough to buy it. The biggest threat to the planet now are the expanding populations of countries who still have their fertility rate above replacement rate.
There was an interesting observation at some day cares in Israel. When their day care closed, parents would drop everything to make sure they picked their kids up on time, but some would still be late. At some point, these day cares decided to start applying fines whenever the parents were late, and it completely backfired. Parents were suddenly always late and in large numbers, because parents felt guilty about making teachers stay late, and by adding a fine, they removed that guilt.
I view a carbon tax in the same way. It's an easy way for companies to continue with whatever their doing and they replace any guilt they may have with an easy payment. It certainly isn't going to solve much, because it removes any real chance of accountability. It is not a significant enough incentive for them to implement impactful change.
The free market may help create solutions, but it will not sustain them. Reversing climate change will not be a profitable endeavor in the short-term, and unfortunately market success is a greedy algorithm.
It's a complete contradiction that a free market could ensure conservation, since it relies entirety upon consumption, and market success is about who consumes the most.
It's different because companies don't feel guilt. Instead, they are motivated purely by revenues and profits which makes a carbon tax a viable incentive for them to decrease carbon emissions. As of now, there are almost no real repercussions for companies who destroy the environment.
>The free market has also brought us widespread electric cars, solar panels, gas power plants.
Massive government investment brought us each of those.
>Socialism has brought us expanding populations globally, by offering free food to people who are not productive enough to buy it. The biggest threat to the planet now are the expanding populations of countries who still have their fertility rate above replacement rate.
If we are attributing threats, I'd look closer to home.
The hard right solution: lets have some way to let the bottom half of the population drop out of the world. At least it's an honest take on capitalism ideology, gotta give it him!
If we're just going to attribute anything that happened during capitalism as a result of the "free market" then I get to say that communism invented satellites, discovered stem cells, and cured maternally transmitted HIV.
Electric cars and solar panels won't save us. You're not fooling anyone with that. Solar panels are not nearly efficient enough to replace anything major any time soon, and electric passenger cars will certainly help, but they are not hitting the pavement fast enough to have any kind of impact in the timelines we need to see to avoid apocalyptic catastrophe.
Also how will gas power plants help climate change? Unless this is a different use of the word 'gas' than i'm used to, I think you're referring to natural gas, aka: one of the largest contributor to carbon emissions.
And damn, I've heard a lot of dumb anti-socialist arguments before, but "people who are not able to provide labor to a market economy should starve to death" is a new one.
Do you have a source that natural gas is the largest carbon emissionss contributer? Genuinely curious, because over here in Germany gas companies (Gazprom.. ;)) market themselves as the opposite and the same argument is used for cars running on natural gas. I know that's just PR, but I thought it produces less emissions because it burns more efficiently than other fossil fuels.
CO2 emissions are essentially the same, but other pollutants are much lower. There are less contaminants in natural gas, so burning it in a cheap and inefficient engine like a bus in a city is better than using petrol.
> And damn, I've heard a lot of dumb anti-socialist arguments before, but "people who are not able to provide labor to a market economy should starve to death" is a new one.
Horrible indeed. The callousness of it reminded me of this exchange, loosely recalled, in the "Conspiracy" HBO movie about the Wannsee conference:
Some nazi bureaucrat: - "Hard labour? But many haven't picked up anything heavier than a pencil in their entire life?!"
Heydrich: - "Yes, and subsequently most will perish of natural causes." casually moves on the the next point
Very high on the list of things that capitalism has brought: socialism. It literally would not exist without capitalism. Therefore, whatever you can attribute to socialism, it's also an indirect outcome of capitalism.
Aardman didn’t invent stop motion nor claymation. So plenty of companies have been in the business of creating stories using those techniques. However I’m pretty sure Aardman could have grounds for legal action if another company copied their iconic character designs (which will be copyrighted).
The world is not stable, technology is not stable, your competitors are not stable and your customers' desires are not stable. If you don't try to grow then eventually you'll start to shrink.
A company shrinking is only a problem for a certain kind of shareholder. Employees may be perfectly happy to retire or move on to new jobs as the company gradually reduces its workforce while remaining true to its core business, for which there is a gradually decreasing demand.
As an example, I believe there are some car manufacturers who have stated that rather than diversify into electric cars they intend to stick with internal combustion engines for as long as there is demand, then close down. It seems like a reasonable plan to me. Some investors will be happy with the larger short-term profits that derive from not having to invest in a struggle to go electric, which they'd probably fail at anyway. Other investors can sell their shares and reinvest elsewhere.
There’s nothing wrong with a company existing to specialise in its own field. Not every business has to be an Amazon nor Google. not everyone wants to work in such a company and a great many business owners equally don’t really care that much either just so long as their business sustains them a comfortable life.
We live in the bubble in the technology sector because growth is easy (data can be redistributed cheaply and we can work on an international scale right from the off). But for an animation studio that would mean having to write more scripts and thus potentially diluting their brand with inferior stores.
When You think about where Aardman began (stop motion animation that could take years just to produce one half hour TV movie), you can really see that the company is built around the love of animation rather than being a mass producer of family content.
Is that necessarily a bad thing? Aardman has a well established artistic niche. Perhaps good governance for them emphasizes stability over risky growth opportunities.
