• Tech News
    • Games
    • Pc & Laptop
    • Mobile Tech
    • Ar & Vr
    • Security
  • Startup
    • Fintech
  • Reviews
  • How To
What's Hot

Elementor #32036

January 24, 2025

The Redmi Note 13 is a bigger downgrade compared to the 5G model than you might think

April 18, 2024

Xiaomi Redmi Watch 4 is a budget smartwatch with a premium look and feel

April 16, 2024
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Facebook Twitter Instagram Pinterest VKontakte
Behind The ScreenBehind The Screen
  • Tech News
    1. Games
    2. Pc & Laptop
    3. Mobile Tech
    4. Ar & Vr
    5. Security
    6. View All

    Bring Elden Ring to the table with the upcoming board game adaptation

    September 19, 2022

    ONI: Road to be the Mightiest Oni reveals its opening movie

    September 19, 2022

    GTA 6 images and footage allegedly leak

    September 19, 2022

    Wild west adventure Card Cowboy turns cards into weird and silly stories

    September 18, 2022

    7 Reasons Why You Should Study PHP Programming Language

    October 19, 2022

    Logitech MX Master 3S and MX Keys Combo for Business Gen 2 Review

    October 9, 2022

    Lenovo ThinkPad X1 Carbon Gen10 Review

    September 18, 2022

    Lenovo IdeaPad 5i Chromebook, 16-inch+120Hz

    September 3, 2022

    It’s 2023 and Spotify Still Can’t Say When AirPlay 2 Support Will Arrive

    April 4, 2023

    YouTube adds very convenient iPhone homescreen widgets

    October 15, 2022

    Google finishes iOS 16 Lock Screen widgets rollout w/ Maps

    October 14, 2022

    Is Apple actually turning iMessage into AIM or is this sketchy redesign rumor for laughs?

    October 14, 2022

    MeetKai launches AI-powered metaverse, starting with a billboard in Times Square

    August 10, 2022

    The DeanBeat: RP1 simulates putting 4,000 people together in a single metaverse plaza

    August 10, 2022

    Improving the customer experience with virtual and augmented reality

    August 10, 2022

    Why the metaverse won’t fall to Clubhouse’s fate

    August 10, 2022

    How Apple privacy changes have forced social media marketing to evolve

    October 16, 2022

    Microsoft Patch Tuesday October Fixed 85 Vulnerabilities – Latest Hacking News

    October 16, 2022

    Decentralization and KYC compliance: Critical concepts in sovereign policy

    October 15, 2022

    What Thoma Bravo’s latest acquisition reveals about identity management

    October 14, 2022

    What is a Service Robot? The vision of an intelligent service application is possible.

    November 7, 2022

    Tom Brady just chucked another Microsoft Surface tablet

    September 18, 2022

    The best AIO coolers for your PC in 2022

    September 18, 2022

    YC’s Michael Seibel clarifies some misconceptions about the accelerator • DailyTech

    September 18, 2022
  • Startup
    • Fintech
  • Reviews
  • How To
Behind The ScreenBehind The Screen
Home»Startup»Just Two Cheers For Patagonia’s Chouinard: Why Ignore An ESOP?
Startup

Just Two Cheers For Patagonia’s Chouinard: Why Ignore An ESOP?

September 26, 2022No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Just Two Cheers For Patagonia’s Chouinard: Why Ignore An ESOP?
Share
Facebook Twitter LinkedIn Pinterest Email

As a business advisor and outdoors enthusiast, I’ve long admired Yvon Chouinard. Protecting nature is one of four core values of Patagonia, the global outdoor apparel and equipment company he founded a half-century ago. Chouinard is also committed to the welfare of his employees, and Fortune even named it the “coolest company on the planet.”

So, I read with intense interest Chouinard’s bold decision to transfer his family’s ownership of the gear maker, valued at $3 billion, to an environmental nonprofit and place its voting stock into a trust. “Earth is now our only shareholder” headlined Patagonia’s news release.

I applaud the way Chouinard and his family have structured the sale to continue Patagonia’s environmental focus. They have transferred all of their voting stock – about 2% of overall shares – into the Patagonia Purpose Trust. It will be overseen by family members and their closest advisors to ensure the company honors its pledge to run a socially responsible business and gives away its profits to a newly established nonprofit, Holdfast Collective, that will own the nonvoting common shares and use the profits on climate initiatives.

An ESOP protects your legacy, ensuring that you can not only remain independent, but also maintain … [+] your focus on being a great place to work, a valued member of our community, and a good steward of the environment.

getty

At the same time, is it a missed opportunity? Over the last 20 years, I have counseled hundreds of private and family-owned companies about the benefits of employee ownership, or ESOP, as part of a change-of-ownership. So, I wonder why Chouinard and his advisors didn’t at the least consider a partial ESOP structure – a plan that gives, say, 20% to 30% ownership in Patagonia to his 2,000-plus loyal and devoted employees.

The omission is baffling, especially since strong employee morale and engagement have been synonymous with Patagonia, and an ESOP could drive retirement security for employees in perpetuity. Chouinard has demonstrated repeatedly that he cares about his employees. The Ventura, Calif., company was the first for-profit California business to become a B Corp company that is measured by its social and environmental performance. Its headquarters has no enclosed workspaces, and Chouinard doesn’t have an office. It was among the first companies to establish an on-site childcare center.

Plus, his philosophical employee manual (which became the 2005 book Let My People Go Surfing: The Education of a Reluctant Businessman) essentially urges employees to cut work to ride the waves when the surf’s up. President Obama even recognized the company as a “Champion of Change” for its commitment to working families.

To be sure, Chouinard has addressed employee stock options and employee ownership in the past – and rejected them. In another book he published in 2012, The Responsible Company, he disclosed his apprehensions about employee and public ownership.

He voiced concerns that, “with shares more broadly distributed, the company would become overly cautious about undertaking risks in the pursuit of its environmental goals.” He added he was “willing to undertake risks that might give pause to broader ownership, even of employees committed to reducing environmental impact.”

Moreover, I would be churlish if I didn’t acknowledge Chouinard and his family’s generosity. The transaction’s structure, in which the family is gifting its non-voting Patagonia common shares to the Holdfast Collective, means the family will receive no tax benefit for its donation. That’s because Holdfast is a 501(c)(4), able to make unlimited political contributions, rendering donations to it non-tax deductible.

So, why did Chouinard neglect to create an ESOP, which could have been achieved at no additional cost to himself? To be honest, as is still often the case today, it may be because Chouinard or his advisors have not fully grasped the distinct tax, financial and other advantages that a partial or full ESOP can deliver to future growth and success of a company, including a Certified B Corp.

ESOPs and B Corps share many similar core values. No wonder an article in ESOP Builders, a Canadian consultancy, headlined “B Corps and ESOPs – Best of Both Worlds.” Dansko, the Pennsylvania-based comfort footwear maker, is a Certified B Corp that became a 100% ESOP-owned company in 2012. Its co-founder and CEO Mandy Cabot says becoming an employee-owned B Corp “protects our legacy, ensuring that we can not only remain independent, but also maintain our focus on being a great place to work, a valued member of our community, and a good steward of the environment.”

So, here’s my message to Chouinard and his board of directors. If the donation of the other 98% of Patagonia’s common shares to the Holdfast Collective has not yet closed, it is not too late to establish a partial ESOP, like Clif Bar did, and drive legacy value for the employees of this great company.

Having continued to observe many of the private companies I assisted in going the ESOP route, I can say without pause that they, their employees, and their communities benefit. A 2019 ESOP Association survey of members backs me up. Eighty-five percent reported their ESOP had a positive impact on their corporate culture and 75% said employees were more involved in ensuring the company’s financial success. Perhaps that explains why 72% of respondents to a separate survey would prefer to work for an employee-owned company.

Mr. Chouinard, have your advisors give me a call.

Source link

See also  The World Isn’t Ready for the Next Decade of AI
cheers Chouinard ESOP Ignore Patagonias
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Multiple Milestones As New Majority Capital Boosts Entrepreneurship Through Acquisition

September 26, 2023

Getty Images Plunges Into the Generative AI Pool

September 26, 2023

3 Hot Startup Opportunities In Augmented Reality

September 26, 2023

The ChatGPT App Can Now Talk to You—and Look Into Your Life

September 25, 2023
Add A Comment

Comments are closed.

Editors Picks

Nintendo Switch Online adds Pokemon Puzzle League in the west, Custom Robo in Japan

July 11, 2022

iPhone 14 review

October 3, 2022

RSA – APIs, your organization’s dedicated backdoors

June 25, 2022

Madrona backs WaFd Bank spinout developing consumer software for regional banks – Startup

March 6, 2023

Subscribe to Updates

Get the latest news and Updates from Behind The Scene about Tech, Startup and more.

Top Post

Elementor #32036

The Redmi Note 13 is a bigger downgrade compared to the 5G model than you might think

Xiaomi Redmi Watch 4 is a budget smartwatch with a premium look and feel

Behind The Screen
Facebook Twitter Instagram Pinterest Vimeo YouTube
  • Contact
  • Privacy Policy
  • Terms & Conditions
© 2025 behindthescreen.uk - All rights reserved.

Type above and press Enter to search. Press Esc to cancel.