Why employee shares could be your most revolutionary business design

Boxers & Briefs Podcast #15: Empowering Ownership: ESOP insights with Bruce Sheppard

What if the most radical act in business isn’t about disruption, but connection? What if ownership could be the ultimate creative medium—the canvas on which we paint a completely different relationship between people and the companies they build? Bruce Sheppard, co-founder of Gilligan Sheppard, reveals why traditional approaches to Employee Stock Ownership Plans (ESOPs) often fail, and how a philosophical shift could transform everything.

Beyond the Silicon Valley template

The world of employee ownership is littered with carbon-copy plans—organisations mindlessly mimicking Silicon Valley startups without understanding the deeper purpose. “They do it because everyone else is doing it,” Bruce explains with characteristic directness. “In my mind, they’re the worst reasons for ever doing anything.”

This follow-the-leader mentality produces predictable results: option plans that only work ‘when the tide’s coming in,’ schemes designed primarily to handcuff talent rather than transform them, and a fundamental misunderstanding of what ownership actually means.

The revolutionary approach? “You are better to do it because of a philosophical reason or a genuine desire to incentivise and share,” Bruce argues. This isn’t just semantic distinction—it’s the difference between creating genuine owner-thinkers versus employees with fancy certificates.

The ownership laboratory

For Bruce, employee ownership isn’t just another HR tool—it’s a laboratory for transformation. “My mantra with share option plans is I want to teach people how to be responsible owners,” he explains. “That’s my objective.”

This perspective shifts the entire conversation from financial engineering to human development. What if ownership is less about equity percentages and more about creating a completely different relationship with work itself?

The most innovative ESOPs are tailored specifically to align with a company’s purpose, strategy, and what matters to the team. This bespoke approach ensures employees engage with ownership as a concept, not just as a financial instrument.

The Milo Minderbender paradox

Bruce references Joseph Heller’s classic novel Catch-22 to illustrate the nature of ownership. In the book, entrepreneur Milo Minderbender makes his cohorts shareholders, but when they ask for their share of profits, he simply hands them beautifully embossed share certificates.

“What do you own when you own a share of something? You own a piece of paper with some rights,” Bruce explains. This lesson—that ownership is both symbolic and substantive—forms the foundation of his approach.

Most employees seeking shares don’t fully grasp this reality. They want shares for status, information access, or expected financial gain, rarely understanding that genuine ownership is about responsibility as much as rights.

Breaking the binary trap

The conventional wisdom on ESOPs falls into a binary trap: either they’re tools to handcuff employees or they’re financial rewards. Bruce proposes a third pathway—one that transforms participants through the experience of ownership itself.

“If you want to make someone actually feel like an owner, they have to suffer like an owner,” he explains. This means creating genuine choice rather than forced participation.

Bruce’s revolutionary approach: “I’m going to give you a bonus in cash. You can either keep the cash or you can give it back to me, and I’ll give you shares instead.” When employees make this conscious choice—effectively putting their money at risk—something transformational happens. They begin thinking differently.

This stands in stark contrast to typical startup models where options are granted freely, creating no immediate sense of risk or responsibility. These plans work wonderfully during growth periods but collapse when companies hit inevitable downturns—precisely when owner-thinking becomes most valuable.

The creative tension of inclusive ownership

When considering which employees should participate in ownership, Bruce’s philosophical position is clear: “We only succeed if we all succeed. We’re only as strong as our weakest link. Every human is as important as every other human in a team.”

This approach—offering ownership to everyone who demonstrates values alignment and staying power (typically after two years at Gilligan Sheppard)—creates a powerful cultural foundation. But it also introduces creative tension.

What happens when all employees gain shareholder rights, including voting at annual general meetings? “You can rapidly go from having a share register of driven owners who are employees to driven owners who are employees and ex-employees,” Bruce notes.

Some companies address this by restricting rights—placing employee shares in nominee companies or making them non-voting. Bruce rejects these limitations: “If you’re an owner and you own something, you own it. If you own it, you have rights. One of the rights you have is to have a say.”

The brilliance of this approach is that it doesn’t avoid tension—it embraces it as the very medium through which ownership mentality develops. Messy AGMs and difficult conversations become part of the ownership education, not problems to be engineered away.

The counterintuitive protection

Perhaps most surprisingly, Bruce’s approach includes a remarkable protection for employees when they leave: “If you’re a good leaver, we guarantee that you will never get less than the price you paid for them, even on a downturn.”

This stands in stark contrast to conventional ESOPs, where departing employees often face tough choices: pay up for their options within a tight timeframe or forfeit them entirely.

This isn’t just generosity—it’s strategic. By ensuring employees never lose their initial investment (unless they’re ‘bad leavers’ who’ve taken employment disputes to authorities), the company reinforces the core philosophical message: ownership should be a positive learning experience, not a punitive trap.

The owner’s paradox

The ultimate insight from Bruce’s decades of implementing various ownership schemes is that the best ESOPs balance seemingly contradictory elements:

• They require real financial commitment but limit catastrophic downsides
• They grant authentic rights while maintaining business functionality
• They’re inclusive across the organisation but selective about timing
• They acknowledge both collective success and individual choice

This is ownership as creative paradox—a carefully designed tension between individual agency and collective purpose.

The revolutionary question

For business owners considering employee ownership, Bruce offers a provocative reframing of the entire conversation. Instead of asking “How can we structure this financially?” the revolutionary question becomes: “What kind of owners do we want to create?”

This shifts everything. Financial structures become secondary to the transformational journey. Retention mechanics matter less than the development of ownership thinking.

In this paradigm, the most important metric isn’t how many employees become shareholders or how many shares they hold—it’s whether they begin to think and act like responsible owners.

“The best way to a happy and wealthy existence is to buy and own things, not trade them, not sweat your blood, but to actually invest and own,” Bruce concludes. “It is the best way to a future life of prosperity. It just is.”

This isn’t just about business structure—it’s about reimagining the fundamental relationships between people and the organisations they build together. And that might be the most revolutionary act of all.

This article is proudly brought to you by Gilligan Sheppard, the problem solvers in business who believe in thinking differently.