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Profit-sharing

November 7, 2023 • 3 min read

Fifteen percent of the profit is distributed among the team

Every employee of Teal Partners directly shares in the success of the company. Fifteen percent of the annual profit is distributed among the 30 internal employees. According to Koen Denies, the profit-sharing principle illustrates the company philosophy of ownership, autonomy, and collectivity: "Teal Partners truly belongs to everyone who works here. By sharing a percentage of the profit with the team, we put that belief into practice."

First, the practical side. How do you apply profit-sharing?

Koen Denies: "Profit-sharing can be a one-time payment or a regular compensation according to the annual profit. For us, it's the latter: we pay out the profit compensation every year, and we've been doing that since 2017. Fifteen percent of the profit is distributed among the employees. Those who haven't been with us for a year receive their share according to the number of months they have worked with us."

What is the philosophy behind it?

Koen Denies: "Teal Partners belongs to all employees. That's our adage, and we make it concrete with profit-sharing. To put it in a picture: everyone reaps the fruits of the tree we have grown together. We want every employee to be imbued with the idea that this is their company, and not just the company where they work."

"We set the bar high at Teal Partners. We ask for dedication, commitment, and passion. We want to attract the best people. They deserve to fully enjoy what they contribute to every day. Our company grows rapidly due to the commitment of our people who go the extra mile. We like to actively think about how we can best reward these people."

Employees can also be involved through shares or options. Why do you choose profit-sharing instead?

Koen Denies: "There was a thought process behind that. Giving away shares for free: we don't believe in that. You only appreciate something if you have to work for it. If we were to offer shares for sale, we would favor the most financially powerful employees. Due to our growth, the value of the company is rising too quickly. Young people or recent graduates with less financial room risk missing out. We don't want that. Profit-sharing is a good alternative. There's no need to invest upfront. It's even safer: a share can decrease in value while you don't run any risk with profit-sharing."

"We asked ourselves: why does a company issue shares? There are three reasons. First, a share gives the buyer voting rights. But participation is already anchored in our way of working, with the flat hierarchy and employee autonomy. Second, shareholders share in a company's profit. What we do by issuing the profit premium is the equivalent of providing a dividend. Third, shareholders receive the added value when a share is sold. We honor that as well. For example, when shares of Teal Partners were sold in 2021, the team also received fifteen percent of the added value."

According to figures from Securex, less than one in a hundred companies apply the principle of profit-sharing. It's not common. Why do you do it?

Koen Denies: "For us, it's a matter of principle. We want the people who give their best every day, in our projects and for our customers, to really get what they deserve. In most companies, the added value that people create at the end of the day goes only to the shareholders. That doesn't feel quite right."

"Of course, shareholders should get their share, but don't the people who stand in the line of fire every day deserve the same? They receive a wage for their work, but if they do their work excellently, and if the company grows and becomes stronger as a result, then they deserve just as much their share of that added value. For us, it's not logical that only investors, by investing capital, earn from the profitability and growth of a company. Through profit-sharing, we want to bring this more into balance, by also rewarding the people who invest their energy and time in the company every day."

How are the profit-sharing and the self-direction principles of Teal Partners linked?

Koen Denies: "Profit-sharing translates our beliefs in ownership, autonomy, and collectivity into practice. We evaluate our salary policy together every year. Every employee can request changes or put other ideas on the table. But that hasn't happened yet. It's a collective decision that benefits everyone."