An employee ownership trust (EOT) holds a permanent or long-term shareholding in a company on trust for the benefit of all the company's employees. An EOT provides indirect (trust) employee ownership of a company.
Among the different forms of employee ownership, the trust model may, in particular, be chosen instead of employees owning shares directly because it can be used to organise an employee buy-out, without requiring finance from employees, provides a long-term ownership model and is straightforward to administer.
This trust model of employee ownership has been promoted since 2012 by the UK Government and is now the main form of employee ownership in the UK. The EOT ownership model is also recognised in the United States (where it may be labelled differently, such as perpetual trust or steward-ownership trust) as an alternative to the ESOP.[1]