Toronto-based strategic consulting firm Grantbook Inc. is transitioning to an employee ownership trust, inviting its employees to help define their retirement savings model.
“It was kind of like a jagged, ragged journey, crunching through the problems for which the answer was an EOT and then finally stumbled on it at the last minute at the end of 2024,” says Nikki Barrett, chief executive officer at the firm.
The sale of the company was a part of a planned exit by co-founder Peter Dietz and Grantbook aims to finish the payout before the end of 2027.
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In its 2023 fall economic statement, the Canadian federal government proposed to exempt the first $10 million in capital gains realized on the sale of a business to an EOT from taxation further boosting the interest in this model as an effective succession plan for employers.
Barrett says the company has a flexible, high autonomy and high trust culture that’s now benefiting from the profit-sharing model. She adds the company is in the process of electing whether to pursue a benefits package with retirement savings accounts that have the potential to match those contributions in the future or leaning into individual capital accounts.
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“When you look at EOTs as a retirement savings vehicle, it really is through individual capital accounts where the company can drip actual share holdings to individuals in trust so that when they leave, those shares are bought out and returned to the pool.”
Under its new ownership model, the company offers a profit-sharing model as well as equity distribution. Profit sharing is more immediate with staff receiving a lump sum payment available in different time intervals.
She adds equity allocation through individual equity accounts operates as a retirement savings vehicle given there’s equity held in the trust for employees that can be redeemed upon exit.
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