Cirkle becomes majority employee-owned business

Cirkle has become a majority employee-owned business, with founder and chairman Caroline Kinsey transferring 60 per cent of the equity into an Employee Ownership Trust (EOT).

Cirkle: Employees become partners under new structure
Cirkle: Employees become partners under new structure

Kinsey, who founded the PR and digital agency 20 years ago, previously owned 100 per cent of the business.

Since late 2014, UK firms have been able to create EOTs if they transfer at least 51 per cent of ownership into the trust. Kinsey told PRWeek that under the scheme, employees become partners in the business and receive a partnership bonus each year, of which the first £3,600 is income tax free.

Staff will also benefit should the business be sold, gaining a lump sum based on salary, hours worked and length of service.

Kinsey said: "The longer somebody is an employee at Cirkle, the bigger the benefits. So it really does reward employees who have contributed to the overall value of the business. We have a lot of long-serving employees who genuinely deserve to be rewarded."

She added: "It will get distributed to all members of staff, and that’s a key point to me. In this model - it’s very much like the John Lewis Partnership model - all staff are rewarded, and are therefore more incentivised to contribute more and are maybe more involved in the business."

Last year Manchester-based Tangerine followed a similar path, with founder Sandy Lindsay giving up her majority ownership of the business and setting up an EOT.

Cirkle, which employs 40 people, is the first PRCA-accredited agency to become majority employee owned. PRCA director general Francis Ingham said: "Cirkle has always prided itself on setting the agenda, not following it, and this bold move to a majority employee-owned business is utterly typical of that attitude."

Kinsey added: "I shared [the EOT news] with some of my clients today and we’re getting fabulous feedback. They're saying, 'this is so forward thinking'. They already see the benefits.

"I think this is really going to reaffirm how Cirkle invests in its employee engagement."

Although majority employee ownership is rare among UK PR agencies, several consultancies have allowed staff to own equity in their businesses.

In 2013, Forster Communications opened up ownership to staff. Other agencies with employee ownership plans include Lewis, whose website claims it has "the largest employee ownership scheme in the industry, with over 70 partners and counting"; and Lansons Communications, where ownership is split among around a third of its c.110 staff.

In February, Cirkle announced the appointment of Text100 deputy MD Ruth Kieran as its new managing director. Cirkle is headquartered in Buckinghamshire and recently opened an office in London.

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