In June 2023, Galois officially became 100% employee-owned—realizing a vision 10 years in the making.
This significant milestone was made possible through our Employee Stock Ownership Plan (ESOP), introduced in 2013 after Galois’s founder John Launchbury learned of ESOPs’ benefits during his “Blue Sky”[1] time, then introduced it to Galois as part of his long standing vision of employee ownership. Over the years since, the company and the ESOP have progressively bought ownership from John and other shareholders, finally purchasing the last of the shares this year.
But what exactly is an ESOP?
Put simply, an ESOP is a retirement plan, like a 401k, but it’s entirely funded by the employer and it invests primarily in the sponsoring company’s stock. Through ESOPs, employees become owners of the company they work for. And, when they leave the company, they receive cash in exchange. Surveys have consistently shown that ESOP participants have more than twice the average total retirement balance than employees who are not part of an ESOP, among other benefits like higher retention and company performance.
Further, while it’s often the case that typical forms of employee ownership, like options, never actually materialize into any financial benefit for an employee (i.e., the company needs to be acquired or go public), ESOPs are funded to ensure employees receive payment.
Exposure to Big Upside
Employee ownership is even more exciting as a result of our tech-transition strategy. I think of Galois as a “Golden Goose” of sorts. As a research organization, Galois creates a lot of amazing intellectual property. From there, we often create companies with a commercial focus to take that research and mature it into a fully-fledged product or applied service. It’s a great way to expand our impact, serve as stewards of the technology, and create value. Simultaneously, this is helpful for clients who fund R&D, because they get to see the technology they need move from applied prototypes into supported mature technologies.
Just as exciting, it’s a terrific way to expose Galwegians to financial upside. Because Galois owns a significant percentage of each of our spinouts and Galois is entirely owned by its employees, when a spinout does well or is acquired, Galwegians financially benefit. There’s something inspiring about working for a company where, if we all keep doing the right things together, one of these spinouts is inevitably going to pay off in a big way. It could, quite literally, be life-changing.
Every Galwegian Has a Voice
Last, but certainly not least, our ESOP fosters a keen sense of belonging and responsibility among Galwegians. In a very real sense, we all have a vested interest in Galois’ success. Because we all own the company together, regardless of role, we all benefit when the company does well, which further motivates being good stewards of the company’s resources, culture, and decisions.
This intersects directly with our core values: it’s just us, so we’re the ones building a company around “joy at work” and the pursuit of “deep trust,” etc. With our recent transition to a 100% employee-owned ESOP, the power to shape Galois’ future rests entirely in the hands of employee owners.
A Daydream of Mine
As Galois’s CFO, this is all really special for me. When I was younger, I had this daydream of working at a place where, no matter what role you were in, everyone could collectively succeed and participate in financial success. We have that dream afoot at Galois right now. It’s a place where we love to work and collaborate together, and there’s also significant financial upside we share.
Everything we do at Galois is through a people-centric lens—and when you have a bunch of incredibly smart, kind, and thoughtful people focused on doing good work together, especially through the ownership lens, our joy at work rises above the ordinary.
[1] A benefit available to all Galwegians allowing one week off each year for creativity or innovation