How to Sell to Employees and Stay Paid
An employee ownership trust can turn a sale into succession: the team owns the business, the owner is paid from future profits, and the structure must survive a bad year.
| By | The Long Game — Newsroom |
|---|---|
| Filed | 15 September 2026 |
| Read | 3 MIN |
An owner planning succession is deciding whether the company can change hands without becoming a different company. Softstar Shoes passed into the ownership of its 30 employees in January.
The structure has to survive a slow year, a leadership change, and the ordinary friction of a team that now owns the place. It also has to keep compounding after the owner steps back.
Tricia Salcido, former sole owner and CEO, was 56 and beginning retirement planning when she chose to transfer the company to staff. Softstar Shoes moved to a fully employee-owned model through an Employee-Owned Trust (EOT).
The five-question EOT test shows whether the transfer survives
Before talking to staff or advisers, the owner needs a structure that answers five questions. The answers decide whether the transfer is succession or a delayed sale, whether the team can keep the company intact, and whether the seller's income remains tied to performance rather than becoming a hidden debt.
- Who holds the shares?
- Who funds the purchase?
- How is the seller paid?
- What role does the seller keep?
- What happens if profits fall?
Softstar's structure answers the five questions
Who holds the shares decides who can sell, who can block a change, and who receives the remaining value. A small group holding the shares gives the workforce influence but not the equity. The trust needs a board, a voting rule, and a way to add new employees.
The EOT holds the company for the benefit of Softstar's staff instead of requiring staff to fund a purchase. That prevents employees from becoming lenders as well as owners. If a worker buyout is funded by wages, the business must service the purchase before it can invest, and a slow year can squeeze the people who run it. A trust-funded purchase leaves the company's cash available for operations, wages, and reinvestment.
Softstar's EOT pays Salcido the purchase price over time from the company's future profits, so she bears the risk of not being paid if the business fails. Treat the payment as a claim on performance, not a salary. When profits are strong, payment follows; when profits are weak, payment waits. That alignment gives the owner a reason to care about the company's staying power. The written schedule must state the profit measure, the payment percentage, the reserve, and the maximum term.
Tricia Salcido will remain in the company as its CFO for the coming years. A defined role can help the team learn the numbers, but it needs an end date and a clear boundary. The role exists for transfer, not control. The owner can answer questions, review the books, and hold the team honest about cash, but not approve every supplier, hire, or price change.
The documents need to say whether instalments pause, extend, or are forgiven. A short pause can be a feature. It tells the team that the owner is still in the business. A silent default can be a failure, because it makes the seller a creditor and the employees debtors. They also name the decision-maker, the reserve that protects operations, and whether the seller's claim can be reduced.
More capital does not replace a workable structure
As many as 600 US companies are transferred to worker ownership annually, and financing for such transactions rose 78% to $865m from $500m in 2024. More capital does not remove the need for a clear trust, a clear payment schedule, and a clear exit for the seller.
A fund can help finance the purchase, yet the trust still has to decide how profits are shared and how the seller is paid. If the structure answers those five questions clearly, the owner can judge whether it is succession or just a delayed sale.