BrewDog is to launch the first ever profit sharing scheme for all bar workers and hand out shares worth around £120,000 to 750 staff over four years as it looks to move on from a rift with disgruntled former employees. Founder and chief executive James Watt has announced he will hand over nearly a fifth of his stake in the craft beer firm, representing 3.7 million shares or a 5% shareholding in BrewDog, to salaried employees to mark the group’s 15-year anniversary.
The near-£100 million share award will be worth around £30,000 a year over four years to each eligible employee, based on the most recent fundraising, which valued BrewDog at around £1.8 billion. It will see its salaried staff – such as wholesale and manufacturing staff, as well as bar and kitchen managers – and so-called equity punk crowdfunding investors own 25%, and the majority of the firm, between them.
Mr Watt’s stake will reduce from 24.2% to 19.2% after awarding the shares, which will initially be held in an employee benefit trust. In a first for the hospitality sector, the Scottish brewer is also launching a profit sharing scheme, allowing its 1,500 hourly-paid bar staff to share half of the earnings from each bar, unveiled as part of a wider growth plan laid out by the group.
BrewDog, which is headquartered in Ellon, Aberdeenshire, said that based on last year’s numbers, this would pay out an extra £3,000 to £5,000 to each bar worker’s salary. It comes after the group was accused by former workers last summer of having a “culture of fear” within the business, with “toxic attitudes” towards junior staff.
A group of 60 employees published an open letter alleging the business was built upon a “cult of personality” around its founders, Mr Watt and Martin Dickie, with “growth at all costs” the overarching focus of the company. They claimed a “significant number” of ex-employees suffered “mental illness” as a result of working at the group and were left “burnt out, afraid and miserable”.
But Mr Watt – who is gearing the firm up for a stock market flotation possibly as soon as next year – said the group had already made changes after the open letter was published, stressing the employee reward scheme was not about mending relationships with employees, but “building the best company we possibly can”.
He told PA news agency: “Everything we’re doing today is about looking forward with a fantastic team.” Mr Watt said the group wanted to create a “new type of business”.
“It will help with every element of our company – recruitment, retention and team engagement.
“Ultimately it’s about ownership. We want our team members to act as business owners and incentivise them as if they are business owners.”
Under the profit sharing scheme, bar staff will receive the payouts twice a year as cash. The shares scheme will start in June and will pay out each year for four years, but the stock will only vest once the group floats or if there is a sale or change of ownership, allowing staff to cash in only at that stage.
Mr Watt said the group was unlikely to float in the next 12 months given the market uncertainty, but said a listing was “very much part” part of the plan in the medium term, with an initial public offering (IPO) in 2023 a possibility.
It last year brought in Co-op chairman and former Asda chief executive Allan Leighton as its chairman to help beef up governance ahead of an IPO. Mr Watt said he hoped the reward schemes would act as a “blueprint for a new type of hospitality model”.
