Rolex/Tudor and the Wilsdorf Foundation. Humble or Dodgy?
The Wilsdorf Foundation (sole owner of Rolex and Tudor) is registered as a charitable organisation in Switzerland. Under this rule they have no obligation to divulge almost anything - and so they don't.
No one knows how much money they make, where it goes, who's on the board of the foundation, how they get paid - nothing.
So my question isn't about what people know, because none of us know anything, but rather what do you feel. Do you feel this discretion is appropriate humility or is it a legal shield used to hide something unpleasant?
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Pete
Consistently overthinking watches, still, better than underthinking I guess.
Melbourne, Australia
Member since
Last active: 11 months ago
Since no one donates money to them publicly like through fundraisers, it's possible that the government doesn't even audit them.
Total secrecy has a way of... changing things, shall we say.
Since no one donates money to them publicly like through fundraisers, it's possible that the government doesn't even audit them.
Total secrecy has a way of... changing things, shall we say.
yeah, people always say 'rolex doesnt answer to shareholders but if the board members of the Wilsdorf foundation are renumerated based on foundation income (which would make sense) is there any practical difference?
so... are they not taxed? Anyone can shed light on this?
so... are they not taxed? Anyone can shed light on this?
to the best I can see it works like this:
1. rolex is a for profit company privately owned by wilsdorf - therefore only needs to disclose details to the owner not the market
2. rolex makes big profits BUT 100% of these are "donated" to a charity (wilsdorf) therefore no tax.
3. wilsdorf - as a charity doesn't have to disclose anything and doesn't pay tax.
I've studied this topic for years. Hans Wilsdorf was a control freak, the foundation was setup by him as a matter of control. I'm sure it is 100% legal, he owned the company, and things were set up per his instructions in perpetuity. I think the man was pretty smart, the company has survived well beyond his death in 1960.
The only figures disclosed by the foundations are here: Key figures. It doesn't say how much is donated or to whom or even if this is the only expenditure of money from the foundation.
An article by the Tribune de Genève claimed in 2018 that the donations are for supporting public works and other causes in Geneva Switzerland - an area well known worldwide for it's poverty and sub-human living conditions and which has always been in dire need of help. A summary in English of the article can be read here.
to the best I can see it works like this:
1. rolex is a for profit company privately owned by wilsdorf - therefore only needs to disclose details to the owner not the market
2. rolex makes big profits BUT 100% of these are "donated" to a charity (wilsdorf) therefore no tax.
3. wilsdorf - as a charity doesn't have to disclose anything and doesn't pay tax.
what the.... how does their Government not feel they should get a cut?? Or do you think they have enough presence to prop up the rest of the industry?? This is a major loophole. Is this how billionares protect their wealth? Set up foundations and write off everything????
For those of you who want to know more I recommend this book:
There are others of course but this one is essential if you are interested in Rolex.
I chose dodgy and would have chosen dodgy but legal.
I have no special knowledge of what is going on with the Wilsdorf trust but do have some understanding of analogous structures which hold private companies within the shell of a nonprofit.
Sometimes it is relatively innocuous, such as how Goodwill operates thrift stores to fund charitable giving. You might complain about the specifics of their exec comp or where the money goes but 86% of their revenues go towards charitable services. I sit on a couple non profit boards....that's pretty good especially for an organization that large.
However, that world can get pretty murky pretty quickly. Nonprofit organizations, particularly in places like the Netherlands and Switzerland, can be used as tax avoidance schemes on a truly grand scale.
The most well documented of these is IKEA, which is technically fully owned by a nonprofit called Stichting Ingka Foundation whose mission is to "To promote and support innovation in the field of architectural and interior design" whatever that means. The Stichting organization allows for Ikea to largely keep it's books private and pay little in income taxes in return for a defined charitable area of giving.
Sounds innocuous enough but Ikea makes $40b+ a year in revenues and $2-4b a year in profits. Acknowledged and traceable donations have never exceeded $150m a year.
What does eat up most of the profit is brand licensing fees. You see, Ikea's brand name is owned by outside parties that have never been disclosed (though likely controlled by the founders family). The upshot is that billions of corporate profits flow directly from this nonprofit organization to the founding family, with a low tax bill due to the nonprofit organization. (If you have further interest in the story, the Economist has reported on it extensively).
The point of this long winded story is that when nonprofit organizations have low trnasparency, it's worthwhile to ask whether they're fulfilling their stated purpose.
Where do you suppose the Wilsdorf Foundation stands in this regard?
Sorry, there’s no getting around the fact it’s super sketchy. Unfortunately, every big company does this nonsense in one way or another. What Rolex does is no better or worse than what everybody else does so if they’re bothering you, you should be bothered by everyone else who has sold you anything recently.
I chose dodgy and would have chosen dodgy but legal.
I have no special knowledge of what is going on with the Wilsdorf trust but do have some understanding of analogous structures which hold private companies within the shell of a nonprofit.
Sometimes it is relatively innocuous, such as how Goodwill operates thrift stores to fund charitable giving. You might complain about the specifics of their exec comp or where the money goes but 86% of their revenues go towards charitable services. I sit on a couple non profit boards....that's pretty good especially for an organization that large.
However, that world can get pretty murky pretty quickly. Nonprofit organizations, particularly in places like the Netherlands and Switzerland, can be used as tax avoidance schemes on a truly grand scale.
The most well documented of these is IKEA, which is technically fully owned by a nonprofit called Stichting Ingka Foundation whose mission is to "To promote and support innovation in the field of architectural and interior design" whatever that means. The Stichting organization allows for Ikea to largely keep it's books private and pay little in income taxes in return for a defined charitable area of giving.
Sounds innocuous enough but Ikea makes $40b+ a year in revenues and $2-4b a year in profits. Acknowledged and traceable donations have never exceeded $150m a year.
What does eat up most of the profit is brand licensing fees. You see, Ikea's brand name is owned by outside parties that have never been disclosed (though likely controlled by the founders family). The upshot is that billions of corporate profits flow directly from this nonprofit organization to the founding family, with a low tax bill due to the nonprofit organization. (If you have further interest in the story, the Economist has reported on it extensively).
The point of this long winded story is that when nonprofit organizations have low trnasparency, it's worthwhile to ask whether they're fulfilling their stated purpose.
Where do you suppose the Wilsdorf Foundation stands in this regard?
Thanks for the read. Very insightful!
If I thought a watch company were something that could term into some evil empire I’d be more concerned, but I mean, they make good watches. As long as the company doesnt engage in illegal conduct, I’m not really bothered by it.
My working theory
The Rolex Board is compromised of Comic Superhero Legends who don't need a paycheck & are only motivated by doing some good
Some of the profits fund this
Some of the profits fund this
A few bucks goes here
Here's a very pissed off Rolex customer who's just found out someone else got to buy that pretty green dial bezel combo Rolex. He's been begging that nasty AD for years!
This guy's just a little confused. Is it Hulk or Kermit you spend too much money on a Rolex for?
If the tail number wasn't invisible you would be able to verify this as being a Rolex Nonprofit Jet
Rumor has it that Rolex paid for Robert Downey Jr's rehab after he got out of jail just so they could build this killer laboratory for Tony Stark
Every single one of these costumes were made with the same leather used for Rolex Cellini bands n straps
That's why this guy is always smiling when he wears his Cellini ... the leather is so comfy and supple . No Superhero here, just honorable mention for being the only person to buy a Cellini since the '80s. I'm guessing it's a gift.
Honestly, Rolex didn't fund any of this. Climate change ruined it , but Superman built this for free
If you are wondering why Rolex can't build anything out of Titanium other than a case back for the Seadweller it's because all the alloy R&D money was spent on a shield and hammer
If buying a Rolex to pay for this young lady's ammo tab ain't a good enough reason to buy a Rolex what is?
It's all funding amazing stuff my friends!
Not familiar with Swiss law. As far as disclosure goes, a privately held company does not have to reveal anything in the USA unless they choose to do so.
Straight dodgy if you ask me