From today, UX studio is owned by its employees

Big day today. After introducing transparent salaries and finances a few months ago, from today, finally I’m not the 100% owner of UX studio.

A 7-month long project with our legal and accountant experts has finished and my team members got their well-deserved shares onto their accounts. We invented a new equity sharing structure, that is more suitable for a service business than a start-up, and also fits to our unique community. It’s a dynamic system where everyone get more and more shares as they spend more time in the company. Everyone get dividends at the end of the year and in case we sell the company everyone will get a fare share from the price too.

The legal structure slowly but steadily followed the reality: now we own together what we have built together. Creating this system wasn’t easy. We’ve spent many hours with paperwork. And before I explain things I want you to know I am not a legal expert personally (I hire some of the bests, though) and this is not legal advice. And everything that is written here is made under the Hungarian law.

So if you come to work with us, after the 3rd month you will get UX studio shares. We don’t give options, but real shares that we transfer to your account. These shares are special, so-called employee shares. You get them for free, you can’t sell them, and if you leave the company they will fall back to us automatically. So you have them while you work with us.

There are two situations when our teammates can benefit from the ownership. At the end of each year the company can (and we will) pay dividends to the shareholders. So our teammates get their normal salaries at the end of each month, but above that, they also get a share from the company’s profit. And if someone buys the company the price will be distributed also. We don’t really plan to sell the business, but who knows.

We managed to create a system, where the employee shares are distributed between the employees proportionately with the square of the time they have spent at the company.

Uhh, wait. What? If you stay at the company you will get more and more shares as the time goes on. The square thing is a mathematical trick that rewards people who are loyal to the team. In this system the guys who have spent the most time in the team win big.

From now we will decide together how much do we invest back from our profits, and how much do we pay ourselves as dividend at the end of the year.

Compared to the popular start-up method we don’t have a one year cliff. So you can get shares (and dividend) before you reach the first year anniversary. On the other side you will lose these shares when you leave the company. We don’t have the 4 year vesting either. You will get more and more shares by the time, which is similar, but it doesn’t stop at 4 years.

To sum it up: our teammates will get moral and financial reward for their hard work. The money we make are split up between the teammates, and doesn’t go to some unknown owners. And from now, the legal structure is closer to what we feel: we build this thing together.