How much do I get paid when selling my company to an Employee Ownership Trust?

If you’re a UK founder considering an Employee Ownership Trust (EOT), the first question is often the simplest: how much do I get paid, and when? This guide explains the principles behind pricing an EOT sale, why an independent valuation sets the upper limit, the risks of chasing the highest headline number, and the equally unhelpful risks of gifting your company. We’ll also show the main drivers that stretch or shorten your payment timeline.

Fair Market Value: the anchor (and upper limit)

In an EOT sale, the trustee must act in the best interests of all employees. That places a natural cap on pricing: the consideration should be at or below fair market value (FMV). An independent valuation provides the evidence for what a willing buyer and willing seller might agree at arm’s length. Treat this FMV as the effective upper limit for an EOT transaction, because the trustee cannot justify paying more than fair value on behalf of employees.

FMV doesn’t come from a single formula. Independent valuations might blend earnings multiples or discounted cash flow with sector outlook, client concentration, growth prospects, leadership depth, working capital needs and normalisation adjustments. There is no one “correct” answer.

Valuation is a judgement call – beware the ‘highest number wins’ trap

Even with robust methods, valuation is subjective. Reasonable experts can disagree on multiples, forecasts and risk. If you pick the adviser who quotes the highest number, you may lock in a price the company can never realistically pay.

Remember how most EOTs are financed – largely from future profits. If the price is stretched, the repayment burden means negligible profit share for staff. But it can also starve the business of investment, strain cashflow and morale, and potentially delay or prevent you being paid in full. A huge headline price that you never actually receive is not a win.

The opposite mistake: gifting the company to the EOT

Gifting, or selling for dramatically below fair value, can also create problems. Sure, maybe you’re lucky enough to be in a great financial position and don’t need the money. But you need to understand you’ll have very little power after the deal completes. What if you gift it to the staff, and the next day they try to flog it on for full market value?

Two cautionary tales: Greedy Greg and Generous Jenny

Greedy Greg

Greg pushed for a top-of-range valuation and a rapid repayment schedule. On paper, brilliant. In practice, the bar was set too high for staff to make it work. So they didn’t.

Read the tale of Greedy Greg

Generous Jenny

Jenny, keen to look after her team, agreed a steep discount well below fair value. The deal closed easily, but the low consideration left her short personally. Worse, the board assumed there was limitless room for staff bonuses, creating expectations that were hard to sustain when markets tightened. A fairer price and a clear bonus policy would have been more durable for everyone.

Read the tale of Generous Jenny

What affects how quickly the EOT can pay you?

The time to receive your money varies widely. Here are the biggest drivers for an EOT payout timeline:

1) Aggressive vs generous sale price

The higher the sale price relative to profits, the longer repayment will take. A modest valuation/sale price is more affordable, accelerating repayment and reducing risk.

2) Percentage sold

Selling 51% versus 100%. A staged approach (e.g., majority now, balance later) can mean you’re paid off quicker. But it begs the question of what to do with retained shares.

3) War chest at completion

Retained profits/cash at the time of sale can provide an initial lump-sum payment, shortening the tail.

4) Post-sale profitability

If profits grow, you may be paid faster. If margins dwindle, repayments can be a struggle. Continuity of business success and strong leadership are critical.

5) Profit share for staff during repayment

Some founders will be keen for staff to enjoy some profit share early. This is great, but of course eats into funds available to repay you.

A real example

Clients are generally reluctant to divulge the financial details of their sale. However, Go EO’s founder, Chris Maslin, is happy to share he sold 60% of what was his accounting firm to an EOT back in 2021. There was a decent war chest at the time, and valuation wasn’t excessive. So he was able to be paid 50% as a “day one” payment, the remaining 50% comfortably affordable over 4 years.

Whilst there were some bumps in the road, the business is now doing brilliantly, and Chris has been fully paid off, on schedule. Staff have received respectable profit share payments since the EOT transaction first happened. The EOT still has 60%, Chris’s share has reduced to 10%, with other senior employees holding the remaining 30%. This helps encourage them to take calculated risks to push the business.

A practical framing for founders selling to an EOT

Think of EOT pricing as a balance between money for you vs money for staff. There is direct trade off here. A fair, defensible valuation gives the trustees confidence and ensures staff aren’t ripped off.

The lower the sale price, the better it is for staff. If you push for the highest possible valuation and sale price, don’t kid yourself that you’re doing your staff any favours by selling to an EOT. You’re setting them up to fail. And if the business fails soon after sale, no more payments for you, and tax break lost too.

A repayment plan aligned to conservative forecasts protects both you and staff. Aim for a structure that your business can meet comfortably in a variety of scenarios, not just the best one.

Continuity is critical to your EOT payout

To reiterate, in an EOT, future profits often fund your consideration. That makes continuity non‑negotiable: client retention, leadership clarity, and operational discipline directly influence how quickly—and whether—you get paid. Over‑stretch the business with an aggressive price, and you risk starving the very engine that must repay you.

How Go EO helps you land a fair, repayable EOT deal

Go EO supports founders with an independent valuation and payment plan, alongside other core areas like tax clearance support and legal documentation.

We’re aware our valuation won’t be as high as some business brokers may suggest you could get for your business. But that’s because we’re trying to set you and your team up to succeed, with a realistic sum you can reasonably expect to be paid. Not woo you with a pie in the sky figure, relying on the fact we’ll be long gone by the time it falls apart.