Amazon founder and CEO, Jeff Bezos, is calling it quits after 25 years of marriage to his wife, MacKenzie Bezos. Jeff Bezos’ fortune is estimated at $139 billion, making him the richest man in modern history.
Carving up property can be complicated in a divorce, but even more so if you are a billionaire with significant assets to be separated, such as houses, brokerage accounts, retirement plans, restricted stock, stock options and art. The Bezos empire includes many of these hard-to-divide assets as well as a 16.3% stake in one of the largest businesses in the world: Amazon.
The vast majority of the Bezoses’ money is tied up in Amazon stock. Divorce lawyers and financial advisors are scratching their heads, trying to figure out how Jeff can buy out MacKenzie’s fair share of the 80 million Amazon shares they own.
Buyout
In many divorces, one spouse essentially buys the other spouse’s interest in the business. The CEO walks away with all the company shares, and the ex-spouse secures other marital assets such as brokerage and retirement accounts, real estate and collectibles. However, Jeff and MacKenzie do not have this option, because so much of their net worth is tied up in Amazon stock. Some couples structure the buyout over several years to ease the burden on the selling spouse and allowing them to come up with enough cash to compensate the ex-spouse.
Co-Ownership
Another option for the Bezoses is transferring the stock into MacKenzie’s name, while the voting rights of the shares remain with Jeff. The transfer would require some very creative lawyering but could offer a solution that would sit better with Bezos, as well as Amazon investors.
Co-ownership is not a very popular way to distribute a business asset, because most couples are not able to remain business partners after a divorce. Often, a marriage ends due to some type of breach of trust or irreconcilable difference. A business partnership is also a marriage of sorts. If the couple could not make their marriage work in their personal life, they most likely cannot make a go of it in their business life either.
Selling The Stock/Business
The lack of liquidity means Bezos may have to sell stock, which could affect his ownership of Amazon and dilute his control of the company, putting his position as a controlling shareholder in jeopardy. This is any divorcing business owner’s worst nightmare. Imagine devoting your entire life to building a business and losing control of it while you are also suffering the loss of your marriage.
Selling shares in a publicly traded stock is much easier than finding a buyer for a private company. It may take a significant amount of time to find the right purchase partner, and the couple might not realize the full value of the company if they are rushed to sell. Many business sales create a large tax burden on sellers, which they might neglect to consider in their haste.
Actual Details Not Known
The Bezos family has remained mum about the exact details of the financial split. We may have to wait until the next SEC filing submitted by Amazon to become privy to the stock ownership changes.
