Who is Patagonia founder Yvon Chouinard and what happens to the company now?

Earth is our sole shareholder.

This is the slogan for the transfer of the company from the Chouinard family to a nonprofit organization that will spend all of the company's profits on fighting climate change.

Yvon Chouinard, the founder of Patagonia, said in an interview with The New York Times that he hoped the announcement would influence a new form of capitalism that didn't end up with a few rich people and a bunch of poor people.

Over the years, Chouinard's net worth has increased, but he detests excessive wealth and was looking to sell his assets.

Patagonia will continue to seek to maximize its profits and compete with other outdoor clothing retailers. The move distinguishes Patagonia from other businesses as its profits will go to a trust and nonprofit organization instead of to shareholders who own a stake in the company

This is the first time it has been done at this size. There were no good alternatives. We created our own.

What were the other options?

How does the new model work?

The Chouinard family decided to take their shares and sell them to nonprofits.

The entire voting stock, which was once held by the Chouinard family and only represents 2% of overall shares, has been placed in a trust. The entity will be overseen by members of the family and closest advisers and will approve key company decisions such as appointments to the board of directors and changes to the company's legal charter.

The Holdfast Collective will take care of the rest of the company, which is worth $3 billion. The Holdfast Collective will distribute an annual dividend from any cash that is not reinvested in Argentina to fight the environmental crisis, protect undeveloped land around the world, and advocate for causes and candidates in politics.

The $100 million of profits that the Chouinard family received each year will now be donated to a new nonprofit.

The maximum amount of money will be given to people who are working to save the planet.

Why not just sell the company and donate the proceeds to charity?

One option was to sell the company and give the money to charity. This move would endanger the future of the area.

"We couldn't be sure a new owner would maintain our values or keep our team of people employed."

If the company were to be sold to a private equity company or a large fashion conglomerate, it would undermine the vision of treating its workers and the planet with respect.

Why not go public?

A disaster like that would have been terrible. Going public would allow Chouinard to sell off his shares and give the proceeds to charity, but it wouldn't affect the company's direction.

Even public companies with good intentions are under too much pressure to make short-term gains.

Who is Yvon Chouinard?

The financial engineering of a deal of this size is unparalleled in creativity, and who else could pull it off than Yvon Chouinard.

A pioneer in rock climbing in the 1960's, Chouinard is not a typical company founder. He lived out of his car and ate cat food. He can be found in his modest homes in Ventura and Jackson Wyoming, not using a cellphone or a computer.

In 1957, Chouinard sold the back of his car to make hardened steel pitons, which he used to surf and climb. The use of steel pitons made by his company, which made up 70% of his income, caused significant damage to the cracks of the park. He introduced new aluminum chockstones, called Hexentrics and Stoppers, which were able tonibalize the sales of pitons and led to the further success of his business.

He was a pioneer in sustainable and stakeholder capitalism. Each year, Patagonia gives 1% of its sales to grassroots environmental groups. The business model will not change under the new ownership.

In 2012 Patagonia became the first company in California to become a certified Benefit Corporation, which is a private certification of for-profit companies of their "social and environmental performance."

Are there others who have donated their wealth?

According to the New York Times, the only person to do something on this scale is a Republican donor who gave away his company for free.

The conservative political advocacy group that received that case was one of the main architects of conservatives efforts to change the American judicial system, including by appointing conservative judges to the Supreme Court and funding efforts to stop action on climate change.

How does this change capitalism?

The move goes against the idea that businesses are only responsible for generating profits for shareholders. Businesses wouldn't succeed if they didn't have the incentive to maximize shareholder returns, according to economists at this school.

More than ever, employees and consumers are choosing companies based on what they stand for, according to Charles Conn, the chair of Patagonia.

Conn argues that shareholder capitalism has brought a lot of good, in the form of the reduction in poverty and longer lives through medical innovation, but it made its gains at an enormous cost.

He says shareholder capitalism thinks goals other than profit are confusing. He says that the market will continue to work and that responsible purpose-led companies will attract more investment, better employees, and deeper customer loyalty.

He writes that this is not 'woke' capitalism. It is the future of business if we want to make a better world for our children.