BrewDog to give workers 50% of bar profits and shares worth £120,000

BrewDog has announced it will give workers 50% of its bar profits and hand out shares worth £120,000 to 750 members of staff.

The craft beer firm is looking to move on from a rift with former disgruntled employees who accused the business of having a "culture of fear" with "toxic attitudes" towards junior staff.

The profit sharing scheme is a first for the hospitality sector, with 1,500 hourly-paid bar staff to share half of the earnings from each bar.

The firm, which is headquartered in Ellon, Aberdeenshire, said bar workers could expect to receive an extra £3,000 to £5,000 a year, based on last year's figures.

Payouts will be made twice a year as cash.

Founder and chief executive James Watt also announced he will hand over nearly a fifth of his stake in the company, representing 3.7 million shares or a 5% shareholding in BrewDog, to salaried employees to mark the group’s 15-year anniversary.

The near-£100 million share award will be worth around £30,000 a year over four years to each eligible employee, based on a recent valuation of around £1.8 billion.

It will see its salaried staff – such as wholesale and manufacturing staff, as well as bar and kitchen managers – and so-called equity punk crowdfunding investors own 25%, and the majority of the firm between them.

Mr Watt’s stake will reduce from 24.2% to 19.2% after awarding the shares, which will initially be held in an employee benefit trust.

Last summer a group of 60 employees published an open letter alleging BrewDog was built upon a “cult of personality” around its founders, Mr Watt and Martin Dickie, with “growth at all costs” the overarching focus of the company.

They claimed a “significant number” of ex-employees suffered “mental illness” as a result of working at the group and were left “burnt out, afraid and miserable".

But Mr Watt stressed the employee reward scheme was not about mending relationships with employees, but "building the best company we possibly can."

“Everything we’re doing today is about looking forward with a fantastic team," he said.

The founder is gearing the firm up for a stock market flotation possibly as soon as next year, and said the group wanted to create a “new type of business."

“It will help with every element of our company – recruitment, retention and team engagement.

“Ultimately it’s about ownership. We want our team members to act as business owners and incentivise them as if they are business owners.”

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The shares scheme will start in June and will pay out each year for four years, but the stock will only vest once the group floats or if there is a sale or change of ownership, allowing staff to cash in only at that stage.

Mr Watt said the group was unlikely to float in the next 12 months given the market uncertainty, but said a listing was “very much part” part of the plan in the medium term, with an initial public offering (IPO) in 2023 a possibility.

It last year brought in Co-op chair and former Asda chief executive Allan Leighton as its chair to help beef up governance ahead of an IPO.

Mr Watt said he hoped the reward schemes would act as a “blueprint for a new type of hospitality model."