Business Lifestyle Technology

Here’s What Jeff and MacKenzie Bezos’ Divorce Could Mean for Amazon

Amazon CEO Jeff Bezos (L) and and his wife MacKenzie

Shortly after they were married, MacKenzie Bezos drove her husband, Jeff, across the country from New York to Seattle while he typed out a business plan for what would become Amazon.

Now, twenty-five years later, MacKenzie Bezos could once again find herself in the driver’s seat, this time with the potential to rattle her husband’s control over the world’s most valuable company.

The world’s richest couple announced in a joint statement Wednesday that they are getting a divorce “after a long period of loving exploration and trial separation.”

Jeff Bezos announced the couple’s plan to divorce in a tweet posted Wednesday. MacKenzie Bezos has yet to release her own statement.

The divorce could drastically reduce Jeff Bezos’ stake in Amazon and open the door for his wife to become one of its largest shareholders, with new leverage at the company, according to divorce lawyers and corporate governance experts.

Washington, where the family lives and Amazon is based, is a community property state, which means assets accrued during the marriage must be split equally in a divorce. Given that Amazon launched after the pair were married, this rule would likely apply to virtually all of Jeff Bezos’ current $137 billion net worth, experts say.

It is not known whether the couple has a pre- or post-nuptial agreement. It’s also unclear whether they might file for divorce in a different state. They own properties in California, Texas and Washington D.C., among other locations.

Assuming there is no prior agreement in place, the Amazon CEO may need to either sell off or transfer half of his more than 16% stake in the company to fulfill an equal split for the divorce, lawyers say.

MacKenzie Bezos could then try to use her large stake in Amazon to push for changes at the company, potentially in opposition to her ex-husband. But it’s unlikely this would lead to actual corporate change.

“It’s only 8% of the stock,” said Michael Pachter, an analyst with Wedbush, “…not enough to actually exert any control.”

“Jeff remains focused on and engaged in all aspects of Amazon,” Drew Herdener, vice president of corporate communications, said in a statement provided to the media.

Unlike other tech CEOs, including Facebook’s Mark Zuckerberg and Snap’s Evan Spiegel, Jeff Bezos’ control over Amazon doesn’t come from having a majority of voting power at the company, but rather from a strong leadership track record over two decades. That probably wouldn’t change with a reduced stake.

Indeed, his Amazon stake has been declining for years as he sells stock to fund his rocket company, Blue Origin.

Instead, it’s more likely that any tension between what would be Amazon’s two largest individual shareholders would simply “add potential drama to a situation where you may not want drama.”

But that assumes MacKenzie Bezos is looking for a fight. Hirsch said that MacKenzie Bezos’ legal counsel will almost certainly advise her that attempting to exercise control at Amazon not only risks creating a public spectacle, but also could undermine the value of her own holdings by interfering with business operations.

“My guess is there are going to be opportunities during negotiations that may allow MacKenzie to receive even more than the public is anticipating in terms of assets in return for her complete cooperation,” Hirsch says.

After Jeff and MacKenzie Bezos released their statement, The New York Post and The National Enquirer reported that Jeff Bezos had begun seeing another woman. The tabloid stories, which has not independently confirmed, do raise the prospect of a messier divorce than initially expected.

“If they can somehow resolve this amicably after yesterday, they’ll both walk away some of the wealthiest people in the world and it’ll be fine,” said Peter Walzer, founding partner at Walzer Melcher in California and president of the American Academy of Matrimonial Lawyers.

But, he added, “in our business, when there’s some kind of emotional issues involved and other people, it fuels a lot of fighting, attorney’s fees and a waste of a lot of money. “

About the author

Byron Adonis Mutingwende