BrewDog CEO to give £100m of his shares to staff

BrewDog co-founder James Watt

James Watt, CEO and co-founder of Aberdeenshire-based craft brewing firm BrewDog, said he will give up to £100 million of his personal shareholding in the firm to staff to mark the company’s 15th anniversary.

BrewDog said its 750 salaried staff would receive shares worth up to £120,000 per person over the next four years.

The figures are based on the firm’s most recent fundraising valuation of £1.8 billion and BrewDog said the award will be worth around £30,000 a year over four years to each staff member when the scheme begins in June this year.

The move would reduce Watt’s shareholding in Ellon-based BrewDog from 24.2% to 19.2%.

Watt also said every BrewDog bar will in future share 50% of its profits with its teams.

That separate move would benefit hourly-paid bar staff, who make up the remainder of BrewDog’s 2,250 employees.

BrewDog said that based on 2021 numbers, this will result in an additional £3,000 to £5,000 to all crew members’ salaries.

BrewDog last year hired former Asda chief executive Allan Leighton as non-executive chairman to mentor Watt as the beer firm prepares for an eventual IPO and attempts to repair its reputation following allegations by a group of former employees that it operates in a “culture of fear.”

BrewDog announced in an internal publication: “James is giving away 5% of BrewDog to our team.

“This is worth almost £100m at our last capital raising valuation and all of these shares will come directly from James’ shareholding.

“This means 3.7 million shares in BrewDog will be distributed evenly amongst all of our salaried team members with each and every salaried team member receiving approximately £30,000 per year in shares over the next four years with the first award of shares due in June 2022.

“This is worth around £120,000 per person over the next four years, but if we continue to grow strongly and reach our goals as a business that value could be considerably more.”

BrewDog said the exact figure depends on how many salaried team members it has at each awarded date and the value of the shares at the point they can be exercised.

The company added: “Following this announcement, we are now more than 25% owned by the people who matter most to us, our incredible team and our Equity Punk community who have been with us every step of the way on this crazy ride.

“They collectively are now our largest shareholder and will play a huge part in the next chapter of the story of this remarkable business …

“We want to create a radically new business model for hospitality – one that firmly puts the people who make the real difference in our bars, those who look after our customers every day, at the very core of what we do.

“To that end, we are delighted to announce that we are completely changing how our bars operate. Each BrewDog Bar is going to share 50% of its profits with team members.

“You read that right. 50% of all profit made in BrewDog Bars will now be shared evenly with the fantastic people who work in them …

“By sharing 50% of profits with our crew, we’re setting the bar higher for hospitality workers everywhere, and democratising the benefits of working for a successful business in our industry.”

BrewDog chairman Allan Leighton said: “We’re delighted to be taking this step, and to be sharing the success of BrewDog with our people.

“There is no better way to ensure that a company thrives than to give its people a stake in its future success.

“These are the perfect initiatives to mark the next stage in the evolution of the business and take our people with us on that journey.

“This is a company that has shown over 15 years of revolutionising the brewing industry that it is ready to do things differently and I am very proud to chair it.”

BrewDog said Watt is transferring 3,727,201 shares to an Employee Benefit Trust that will distribute 1.25% of the company evenly amongst all 750 salaried crew members every year for the next four years.

“These shares are valued at just under £100m at BrewDog’s most recent fundraising valuation,” said BrewDog.

“The shares will be given to team members in the form of share options, or, where regulations mean this is not practical, in the form of conditional cash entitlements based on the value of the shares …”

BrewDog added: “For each bar 30% of its profits will be shared directly with the crew members who work there and 20% with the crew members who work in the bar’s area cluster, to ensure a more equitable split of profits, recognising that some bars may be more profitable than others.

“The profit share is paid out twice a year.

“Based on 2021 numbers, this will result in an additional c. £3,000 – £5,000 to all crew members’ salaries (with variables, including hours worked).”