Founder of Patagonia hands up company: 'Earth is now our sole shareholder.'
Founder of Patagonia hands up company: 'Earth is now our sole shareholder.'
The company's ownership, which was founded in 1973 and is reputedly worth over $3 billion, has been transferred to a trust established to maintain the firm's ideals, as well as a nonprofit organization.
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Patagonia founder Yvon Chouinard. (Fabian Marelli/GDA/AP)
Yvon Chouinard, the creator of Patagonia, revealed Wednesday that he is giving away the outdoor-apparel firm in an unconventional attempt to tackle climate change and the environmental catastrophe.
Chouinard stated in a letter posted on the firm's website that ownership of the company, founded in 1973 and reputedly valued at over $3 billion, has been passed to a trust established to maintain the company's values and objectives, as well as a nonprofit organization.
"Earth is now our only stakeholder," the company stated. "100% of the company's voting stock is transferred to the Patagonia Purpose Trust, which was established to maintain the company's ideals; and 100% of the nonvoting stock is transferred to the Holdfast Collective, a charity devoted to battling the environmental catastrophe and protecting nature."
According to a news release, revenues that are not reinvested in the firm will be paid as dividends to the Holdfast Collective to battle climate change. The firm aims to pay a $100 million yearly dividend, which might alter based on the company's performance.
"It's been half a century since we started our experiment in responsible business," Chouinard, 83, said in a statement. "If we are to have any hope of having a thriving world in 50 years, we must all do everything we can with the resources we have." I'm doing my bit as the company leader I never wanted to be. Instead of extracting value from nature and converting it into profit, Patagonia uses the wealth it generates to safeguard the resource.
"I am dead serious about protecting this world," he went on to say.
The move, which was originally reported by The New York Times, underscores Chouinard's unique approach to integrating his firm to conservation and political action over the course of his almost five-decade career. In recent years, for example, the corporation has chastised President Donald Trump and members of his administration for weakening public lands protections, even threatening to sue Trump.
Patagonia then announced in 2021 that it would no longer sell its products at a famous Wyoming ski resort after one of its owners held a fundraiser with Rep. Marjorie Taylor Greene (Ga.) and other Trump supporters.
More traditional means of activism have also been attempted by the firm. Patagonia not only manufactures items that are less detrimental to the environment, but also has contributed 1% of its revenues to charity groups that strive to safeguard the environment for many years and will continue to do so.
In 2014, the corporation financed the documentary "DamNation," which intended to rally support for dam removal in order to restore wild fish populations.
Chouinard stated in his letter on Wednesday that selling Patagonia or going public were both bad ideas. While the firm might have been sold and all earnings given, there was no assurance that a new owner would uphold the company's ideals or keep all employees working. And going public would have been a "disaster," according to Chouinard.
"Even well-intentioned publicly listed firms are under too much pressure to maximize short-term earnings at the price of long-term vitality and accountability," he said.
Chouinard said that the decision to give away Patagonia is the next stage in the company's long-running attempt to operate responsibly.
"If we expect for a flourishing world, much alone a thriving business," he said, "we must all do what we can with the resources we have." "This is another another way we've found to contribute."
According to Ryan Gellert, CEO of Patagonia, the Chouinard family "asked" him and several others two years ago to create a new structure for the firm with two primary goals: "They wanted us to protect the company's mission while also freeing up additional resources instantly and permanently to solve the environmental catastrophe," he explained. "We believe this new structure achieves both goals, and we hope it promotes a new way of conducting business that prioritizes people and the environment."
According to the news announcement, the Chouinard family will head the charitable activities of the Patagonia Purpose Trust and the Holdfast Collective under the new partnership. The company's leadership will remain unchanged as well. Gellert will remain CEO of Patagonia, and the Chouinard family will stay on the company's board of directors.
The other board members supported the ownership transfer.
"Companies that build the next form of capitalism via a profound commitment to purpose will attract more investment, better personnel, and stronger consumer loyalty," said Charles Conn, chairman of the board. "If we are to create a better world, they are the future of business, and that future begins with what Yvon is doing now."
Kristine McDivitt Tompkins, a board member, stated that "his vision has never wavered" in the 60 years she has known Chouinard.
Could not be more proud to serve on the board of directors of @patagonia. 💚 As of now, Earth is our only shareholder — ALL profits, in perpetuity, will go to our mission to “save our home planet.” https://t.co/SLTTTbao4y
— Dr. Ayana Elizabeth Johnson 🐙 (@ayanaeliza) September 14, 2022
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