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The purpose of an Employee Benefit Trust ("EBT") is to hold shares in a company for the benefit of its current and future employees. Employee owned companies frequently debate what is a sensible shareholding for an EBT to have. At one end of the spectrum you have companies such as the John Lewis Partnership where all shares are held by an EBT. In other companies it may be no more than 25%.
If all shares are held by an EBT then employees are rewarded through their salaries and their bonuses. If some shares are held by employees and some by an EBT then employees can share in a growth in value of shares in the company if it is successful, but the company may at some stage need to repurchase those shares and therefore allocate monies out of profits to an EBT for that purpose. If there is a large proportion of shares of a company in circulation then substantial amounts of profits might be needed to repurchase shares from retiring employees instead of reinvestment in the company.
An EBT is a trust established to benefit current and future employees of a company. It usually has a minimum of three individual trustees, who might represent, initially, a retiring owner, a senior management figure and an employee representative. Sometimes the EBT will have a company as a trustee and the directors of that company will have the background of the individual trustees.