Inside The Klaus Schwab Davos Cash machine, the World Economic Forum, a Swiss non-profit, grapples with currency hoarding, managing substantial revenue and cash reserves, and acquiring high-value real estate, sparking awe and ire in the events industry.
Let’s take a moment to recognize the extraordinarily prosperous media company that is the World Economic Forum before we get into what is going on there.
The largest financial issue facing the WEF now is currency hoarding. For a Swiss non-profit, in fact, to be sitting on a Scrooge-McDuck pile of Swiss francs that employers are paying to send delegates has become a little humiliating. According to a spokesperson, business partnerships start at CHF 15,000 ($17,600) and go up to CHF 600,000 ($705,000) for annual subscriptions that, as of 2017, include the option to spend an additional tens of thousands on tickets.
Thus, the Forum has been covertly acquiring some of the priciest real estate in the world; in this instance, it is located in affluent Cologny, 300 kilometers west, on the left shore of Lake Geneva.
Swiss property records, examined with the assistance of Otto Hostettler, a reporter for the Swiss magazine Beobachter, show that the Forum expanded its compound in 2012 when it paid a total of 24 million francs for two properties on Cologny’s lakefront Chemin de Ruth. Its Villa Mundi conference center was constructed out of a different building that was more recently acquired in a deal whose specifics were not immediately known. (According to Peter Goodman, a critic of Davos, one additional advantage of the purchases is that they link WEF head Klaus Schwab’s residence and office.)
They have the money to do it. The business had a tidy 200 million Swiss francs in cash as well as approximately $500 million in revenue for the year that ended in March 2023. According to three executives who have thoroughly examined Davos’s financial records, the WEF would be worth far more than $1 billion if it were a for-profit business.
In response to emails, WEF spokesman Yann Zopf stated, “Any surplus is fully reinvested into our initiatives and operations in the service of our mission.”
Additionally, rivals in the burgeoning events industry view Davos with a combination of amazement and anger at its lofty stance.
“To replicate what Davos has done in other industries is incredibly difficult,” said Doug Emslie, the founder of the global events business Tarsus, which was sold to Informa for last year for nearly $1 billion. When it comes to the brand, he said, “That Swiss neutrality is very helpful, and the fact that it’s not for profit is very helpful as well.”
Emslie continued, saying that he finds the designation of “not-for-profit” confusing: It’s all crap, he declared. “It’s the businesses who fail to pay taxes.”
After all that, who on the Promenade can blame Dr. Schwab for managing the organization in a way that is, to put it mildly, unlike any non-profit you have ever seen?
For example, in 2021—the last year for which the company’s U.S. tax forms are available—13 of its executives made more than $500,000, with Schwab and Forum President Borge Brende each receiving about $1 million. The study also reveals that for “security or operational efficiency” reasons, “the chairman, accompanied by his spouse, may be provided with private air travel in exceptional situations.”
Recently, GreatGameIndia reported that, according to Semafor, Klaus Schwab announced in an email to staff on Tuesday that he will step down as World Economic Forum Executive Chairman.
