[HN Gopher] CodeWeavers Now Controlled by an Employee Ownership ...
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CodeWeavers Now Controlled by an Employee Ownership Trust
Author : computerliker
Score : 127 points
Date : 2023-05-19 14:52 UTC (8 hours ago)
(HTM) web link (www.phoronix.com)
(TXT) w3m dump (www.phoronix.com)
| abeppu wrote:
| > As he's been the largest shareholder at the company, with his
| departure he decided to transition the firm to being an employee
| ownership trust. The trust will see that CodeWeavers continues to
| operate for the benefit of the community and staff.
|
| I'm not familiar with the "employee ownership trust" concept, so
| I was curious as to how it differed from a worker co-op. On
| reading a layperson description, is it perhaps misnamed? It seems
| like people consider it to be a form of employee ownership, but
| (a) employees do not buy in (b) employees are not bought out when
| they leave (c) employees do not necessarily have any kind of
| voting rights, and the trust could be managed by trustees who are
| not elected by (or from among) employees. It sounds like EOTs
| _can_ share profits or pay dividends out to employees, but don't
| need to. So in what sense is it employee "ownership"? It seems
| like it's just a perpetual trust whose goal includes employee
| well-being.
|
| An org on employee ownership says [1]:
|
| > There is no legal definition of what separates an EOT from
| similar trusts, but to be an EOT, the purpose of the trust should
| include the well-being of the company's employees.
|
| So it's a trust which exists _for_ the employees, but does that
| mean the _own_ it?
|
| A few months ago I listened to this podcast [3] about a perpetual
| trust set up to benefit stray cats. Despite it being created
| _for_ stray cats, of course no one claims that the trust is
| _owned_ by stray cats.
|
| [1] https://www.nceo.org/article/introduction-employee-
| ownership... [2] https://www.esoppartners.com/blog/employee-
| ownership-models [3]
| https://www.npr.org/2023/02/22/1158865140/stray-cats-dixfiel...
| derefr wrote:
| In general, in trust law, a _fiduciary duty_ is imposed upon
| the executors of a trust with respect to the trustees. In other
| words, the executors of a trust must act in the trustees '
| financial best interests, even where these interests would
| conflict with the executor's financial interests. To do
| otherwise is a breach of contract.
|
| You can't trust (heh) regular people to be able to keep this
| duty in mind; which is why the executors of most trusts are law
| firms. Individual people sometimes make the mistake of making
| another individual person the executor of a trust they're
| establishing; but corporations are generally smarter than that.
|
| In the case of corporate-established trusts, the question that
| can "go wrong" here isn't usually who the executor is, but
| rather, how the employees are defined to communicate their
| collective "financial best interest" _to_ the executor. Very
| likely, there is a _board of trustees_ defined in the structure
| of the trust, where some or all members of said board are
| elected by employees (similar to shareholders electing a board
| of directors of a company.)
| zrail wrote:
| A trust has three interested parties. The _grantor_
| establishes and funds the trust. The _beneficiary_ benefits
| from the assets inside the trust. The _trustee_ administers
| the trust and has a fiduciary responsibility to the
| beneficiary. Depending on the trust two or more of these may
| be the same person or people. Different types of trusts have
| different tax and legal treatments.
|
| To my limited understanding of US trust law, the term
| "executor" is typically reserved for estates rather than
| trusts, but maybe some states use that terminology?
| zrail wrote:
| Here's my interpretation of how this might work (reading
| between the lines and based on how ESOPs typically work):
|
| 1. The founder wanted out but didn't want to sell to a PE firm,
| and they wanted to give control to the employees.
|
| 2. The founder set up a trust that will gradually buy them out
| over the course of 7 years. The financial arrangement is
| probably something like: the trust got a long term loan for the
| initial tranche of purchases which it will pay back via
| dividends attached to those shares. It will also use those
| dividends to pay for future tranches of shares.
|
| 3. Employees don't have any ownership rights at all, the trust
| is the sole shareholder. Employees do have control of the
| trust, to an extent, because at least some members of the
| trustee board will be elected from the staff. The trust is
| probably written such that the trustees can elect to distribute
| to the staff some or all of the dividends remaining after
| founder share purchases and debt service.
|
| To answer the ownership question, trusts don't really have
| owners. Trust materialize into existence when a grantor (the
| founder) funds them for the benefit of beneficiaries (in this
| case the staff) and are controlled by trustees (in this case,
| at least some part of whom are staff).
| refulgentis wrote:
| Thank you, I was real curious how this was working. It sounds
| so fraught, I admire people who are able to handle ambiguity,
| and avoid simple interpretations, better than I.
|
| My naive read: You have to convince a bank to give a brand
| new entity a loan, with the only real benefit accruing to the
| bank in the form of interest and yourself in the form of
| giving yourself a retirement gift. I honestly don't
| understand why anyone would play ball with that unless the
| interest rate was, say, 3-4 points above treasuries, so now
| it's the same thing as a PE buyout, but at least the money
| went to you
| zrail wrote:
| There are lots of ways to structure it that don't involve
| an actual bank loan. It's very possible that the founder
| loaned the first tranche of shares to the trust and the
| trust is paying some amount of interest on that loan over
| time. Sometimes this is called seller financing.
| derefr wrote:
| > It sounds so fraught
|
| Wait until you hear about charitable trusts! (And
| specifically, ones defined into existence by a person's
| will, such that it's up to a probate judge to figure out
| how to make the act of charity happen.)
| leetrout wrote:
| Link to original blog post on the other post
| https://news.ycombinator.com/item?id=36002930
| nh2 wrote:
| Props to them and the Wine project for their great achievement:
|
| Removing the last consumer monopoly Windows had (games).
|
| They are the reason I didn't have to boot away from Linux for 10
| years.
| [deleted]
| shinjitsu wrote:
| I was a subscriber 10-15 years ago, but I used steam/proton now,
| I wonder how large the market for something like codeweavers is
| in 2023?
| mattl wrote:
| Codeweavers is paid by Valve to work on Proton
| yjftsjthsd-h wrote:
| I suspect that even means that, courtesy of Proton,
| CodeWeavers now is used by and indirectly paid for by more
| people than ever:)
| mattl wrote:
| I'm sure. I've been a paid user of Crossover for a while
| but I mainly use it on my Steam Deck now
| Rebelgecko wrote:
| The majority of the work on Proton is actually being doing by
| Codeweavers. IIRC they even control the main github repo
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