Patagonia Founder Donates Company to Fight Climate Change

Facts

On Wed., Yvon Chouinard, the billionaire founder of outdoor apparel brand Patagonia, said he will be giving his company away to a private trust to use its profits to fight climate change.
Instead of taking the company public or selling the $3B brand, 83-year-old Chouinard and his wife and two kids will transfer all of their company voting power and shares to protecting and conserving nature.
Since the shares were donated as a gift, the family had to pay a $17.5M tax on the transfer and Patagonia will no longer be distributing any profits to the them.
Chouinard, who became famous for his alpine climbs in Yosemite National Park and has a net worth of $1.3B, wrote on the company website, “we’ll use the wealth Patagonia creates to protect the source of all wealth,” adding “Earth is now our only shareholder.”
Patagonia will continue operating as a for-profit company, and will use profits as needed to reinvest in the company and compensate employees. All other wealth will go to Patagonia Purpose Trust and non-profit Holdfast Collective, who will own 2% voting shares and 98% non-voting stock, respectively.
The philosophy behind this move has long been a part of the company’s business tactics, having imposed a 1% “earth tax” on itself in 1985 to support environmental non-profits around the world.

Narrative A, as provided by Yahoo News. While Chouinard’s decision to break away from the age-old shareholder motto is a bold move with noble motives to help the planet, it’s too soon to celebrate. Without a financial incentive to keep on track, it remains to be seen whether this strategy will succeed.
Narrative B, as provided by Fortune. This is the clearest proof yet that Yvon Chouinard is a leader in the movement away from shareholder capitalism and toward stakeholder capitalism. In a world infected with inequality and environmental destruction, Patagonia has chosen to put the Earth and its inhabitants above profit.