SANTA FE, N.M. (BRAIN) — Bicycle Technologies International has recently restructured as an Employee Ownership Trust, which co-founder and president Preston Martin said benefits employees and gives them more voice in strategic decision making.
BTI is only the 13th company in the U.S. to establish an EOT, also known as a perpetual trust. The majority of BTI's employees are now members of the trust.
Martin and Andrew Wright founded BTI in Ashland, Oregon, in 1993. Martin acquired his partner's shares when Wright died in 2015. At the end of 2020, Martin sold the company to the Trust. Martin said he will continue as president for the foreseeable future.
"The EOT honors and rewards the contributions of those employees who have stuck with BTI through the highs and lows," said Martin. "There has been a noticeable culture shift in recent months, with employee-members taking greater interest in our customers and suppliers, our systems, and the bottom line."
Unlike Employee Stock Ownership Plans, EOT is not a retirement program and employees do not receive an equity stake in the company. Instead the trust provides employees with profit sharing. Profit-sharing payments count as compensation and are therefore tax-deductible to the business. According to Martin, the EOT does not share the same tax benefits as the ESOP, however, setup costs and annual administration fees are a fraction of the ESOP and the EOT is not subject to Employee Retirement Income Security Act of 1974 (ERISA) requirements.
Martin said while researching employee ownership business models, he stumbled across the EOT concept online. Attorney Chris Michael of EOT Advisors helped Martin set up the trust.
Martin said the move was inspired by employee responses to an internal survey last summer regarding diversity and inclusion. A common theme emerged as employee comments focused on how to develop their careers or earn greater compensation. According to BTI's marketing director, Bill Lane, "Since the profit-sharing can scale with the company's growth, there's an incentive to make improvements to efficiency wherever possible, while inspiring larger questions about where growth can lead us as a team."
Martin added "BTI had a remarkable year in 2020. With revenues up nearly 80%, the employee-members have a strong incentive to repeat that success."
