There’s a statement that’s sure to invoke wonder, skepticism, and outright disdain among the wannabe horological cognoscenti. Indeed, search around the internet and you’ll see such entries in the forums. Members mocking and laughing at the thought that a luxury manufacturer that sells watches from the mid-four figures to nearly six figures apiece could ever be a non-profit.
But of course, like all things, there’s a lot more to the history of Rolex.
The plain fact of the matter is Rolex is actually a series of companies headed up by Rolex S.A. And in fact, just to further complicate things, some of those companies own portions of each other. But basically they all funnel into Rolex S.A., which in turn, is wholly owned by the Hans Wilsdorf Foundation. That foundation is recognized by the Swiss government as a charitable trust, and thus, pays no taxes.
This last fact is where the “non-profit” attribution comes from. And dear reader, please keep in mind that Swiss law does not fit absolutely congruently with United States law. And it is U.S. law which informs most of the internet doubters.
If you’re wondering what a non-profit is, Wikipedia defines it as the following:
“A nonprofit organization (NPO) or non-profit organization, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that operates as a business aiming to generate a profit for its owners.”
Making Money: Rolex a Non-Profit
But legal differences between countries aside, you could make a relatively sweeping statement that, in general, not-for-profit companies do indeed make a profit. From Rolex’s revenues (reported to be well north of $4 Billion), salaries are paid and operating expenses and manufacturing costs are covered. Much of the balance left over gets plowed back into the company, or goes to an unknown number of charities. And what’s left after that goes into the bank.
Some have speculated that Rolex could go on operating for years with no revenue at all, simply on what they’ve got socked away in the corporate mattress. But we’ll never really know, because owing to their legal status, neither Rolex S.A. nor the Wilsdorf Foundation are under any obligation to disclose their financials.
A Charitable Organization
So what does this “corporate” structure look like?
Well, Hans Wilsdorf formed the Foundation just after his wife died in 1944. He was sole owner of Rolex, and gave all his shares to the Foundation. When he passed away in 1960, control of the Foundation went to a reported five Foundation trustees. These folks are not shareholders or owners. They are merely custodians. Their main charter, if you will, is to perpetuate Rolex S.A., as well as look after the aforementioned unknown number of charitable activities.
But we do know those charitable entities include The Rolex Institute (which furthers the company’s charitable activities), The Rolex Awards for Enterprise (which recognizes pioneering men and women around the world who work to improve life on Earth), and The Rolex Mentor and Protégé Arts Initiative (which supports a number of extremely talented young artists).
Now, it’s true, the Rollie on your wrist is a magnificent timepiece. But now you know the rest of the story – at least the part that’s available to be known by the public at large. Now you can be proud that your Rolex has done its part to support numerous philanthropic endeavors around the world.