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What exactly are the implications of the trust, as opposed to him just remaining a direct shareholder and handing off the reigns? Did the trust let him get some

What exactly are the implications of the trust, as opposed to him just remaining a direct shareholder and handing off the reigns? Did the trust let him get some liquidity out of his shares somehow? He's still on the board in both scenarios, and it seems like he'll retain voting power. But kudos - I'm glad he didn't want to just sell to some private equity vampire group. And I'm glad he gets to do whatever he wants (is he retiring?).

lcnPylGDnU4H9OF 3y ago
I might be wrong but it sounds similar to what Patagonia did[0]. I believe the point is to (attempt to) guarantee that the long-term priorities of the company are not taken over by sort-term profit chasing. [0] https://www.cnn.com/2022/09/14/business/patagonia-ownership/index.html https://www.cnn.com/2022/09/14/business/patagonia-ownership/...
giomasce 3y ago
I guess the advantage of passing ownership to the trust is that you're not involved anymore. If you keep shares you know that at some point in your life (or at the end of your life) you'll have to pass those to somebody else or setup a trust. Finding somebody else is hard, because it must be somebody that simultanously you trust deeply and who is willing to take on the responsibility to keep aligned with whatever way you want to company to be managed. So you setup a trust instead. Well, if you setup a trust immediately you don't have to think about that any more!
koromak 3y ago
I think these often have rules about a certain portion of profits being allocated to employees, which is nice
tadfisher 3y ago
He's the majority shareholder, so if he sells his shares or dies, the new owner of his shares could theoretically sell off the company, fire all of its employees, etc., without employee involvement. The new majority shareholder is an employee-owned trust, so the employees have direct control of the company, within the limits of the trust's charter.

lcnPylGDnU4H9OF 3y ago

I might be wrong but it sounds similar to what Patagonia did[0]. I believe the point is to (attempt to) guarantee that the long-term priorities of the company are not taken over by sort-term profit chasing. [0] https://www.cnn.com/2022/09/14/business/patagonia-ownership/index.html https://www.cnn.com/2022/09/14/business/patagonia-ownership/...

giomasce 3y ago

I guess the advantage of passing ownership to the trust is that you're not involved anymore. If you keep shares you know that at some point in your life (or at the end of your life) you'll have to pass those to somebody else or setup a trust. Finding somebody else is hard, because it must be somebody that simultanously you trust deeply and who is willing to take on the responsibility to keep aligned with whatever way you want to company to be managed. So you setup a trust instead. Well, if you setup a trust immediately you don't have to think about that any more!

koromak 3y ago

I think these often have rules about a certain portion of profits being allocated to employees, which is nice

tadfisher 3y ago

He's the majority shareholder, so if he sells his shares or dies, the new owner of his shares could theoretically sell off the company, fire all of its employees, etc., without employee involvement. The new majority shareholder is an employee-owned trust, so the employees have direct control of the company, within the limits of the trust's charter.