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Trust Rumors Swirl
Earlier this year reports emerged that Bloomberg may one day become a PPT
In Brief: Last April, reports began to swirl that billionaire Michael Bloomberg was looking to one day transition his stake in the media and financial conglomerate he founded to a Perpetual Purpose Trust.
The Details: While no specific timeline or confirmation from Bloomberg has been provided, reports indicate that Bloomberg is interested in a model similar to that used by Patagonia CEO Yvon Chouiard. A steward ownership model would likely direct a portion – or even all – of the firm’s revenue to Bloomberg Philanthropies. In addition, the move would grant employees greater say, with voting rights vested firmly with those who are closest to the operation and management of the company.
The Impact: Bloomberg’s announcement has major implications for the Employee Ownership and Employee Ownership Trust movements. The announcement resulted in increased visibility of a structure that is relatively unknown in the United States. Media coverage of the rumored move increased the profile of the structure both in the business and political communities. The eventual transition could prove even more impactful, as Bloomberg would serve as another example of a major corporation shifting to a new form of ownership. Finally, the rumors may encourage politicians to create the necessary legal and regulatory structures for such a significant transition.
The Questions: Currently, Patagonia offers the only example of a major corporation transitioning to a Perpetual Purpose Trust. For Bloomberg, this means many regulatory and structural questions still exist. These queries include - how and to where profits will be distributed, who would the company’s trust committee consist of, and what the purpose of the trust will be.
Go Deeper: Check out the original article here.