Jeff Bezos' divorce won't affect his voting power at Amazon, because Mackenzie is giving him control
- Jeff Bezos will retain voting control over the Amazon shares he and Mackenzie Bezos hold following their divorce.
- Mackenzie will get 25% of their combined shares as part of the settlement.
- The agreement clears up some outstanding investor worries.
- But one big question remains: What does Mackenzie plan to do with her shares.
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Jeff Bezos isn't going to have to worry about having his ex-spouse challenge how he runs Amazon.
As part of their divorce, Mackenzie Bezos will get a quarter of the Amazon shares they held together, she announced Thursday on Twitter. But Jeff Bezos will get to control how those shares are voted. And his soon-to-be former wife won't be able to take back control of those votes without his approval, his death, or his incapacitation, Amazon said in a document filed with the Securities and Exchange Commission."Happy to be giving him ... 75% of our Amazon stock plus voting control of my shares to support his continued contributions," she said in a tweeted statement.
The Bezos' agreement concerning their Amazon stake removes a cloud of uncertainty that has hung over the company since they announced in January that they were getting a divorce. Collectively, they were the largest shareholders in the company; their 78.8 million shares gave them together a 16% stake. The divorce raised questions about how they would divvy up their shares, what Mackenzie might do with her portion and how she might exercise her potentially independent voting power in the company.
Legal experts also raised concerns that drawn out divorce proceedings could distract Bezos and hinder his ability to run the company.
The Bezos' divorce agreement addresses many shareholder concerns
The divorce agreement, which the company said should be finalized in about 90 days, has answered many of those questions and concerns. As part of the settlement, Mackenzie will get about 19.7 million Amazon shares, or about 4% of the company's stock, which is worth about $35.7 billion But she signed an agreement that will give Bezos voting power over those shares.
Barring Bezos' incapacitation or death, Mackenzie can't get that voting power back unless he consents. He also will retain voting authority over those shares if she transfers them to another party, say to a non-profit, if that party intends to hold on to them. As part of her agreement with Bezos, Mackenzie agreed to require any party to whom she transfers shares in that way to confer their voting power to Amazon's CEO.The agreement does leave one major question unanswered: What does Mackenzie plan to do with her stake? In her tweet she said she was, "Excited about my own plans," but didn't elaborate. The divorce agreement doesn't appear to bar her from selling shares or transferring them to a charitable entity that had plans to do so. In either case, Bezos would no longer exercise voting control over those shares.
But as a practical matter, Mackenzie may find it difficult to sell a significant stake quickly. Over the last three months about 5 million shares of Amazon traded each day. Mackenzie will hold about four times that many shares, meaning that any significant selloff on her part would likely undermine Amazon's share price - and the value she could see from selling.
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