MacKenzie Bezos is Entitled to Her Fair Share of Amazon.com
The Bezos, formerly the world’s wealthiest couple, announced they have finalized the details of their divorce. Amazon’s founder and chief executive will keep 75% of his company’s stock and all of their ownership of the Washington Post and the Blue Origin Space Company.
Mr. Bezos will also have “sole voting authority” over Ms. Bezos’ Amazon shares. Ms. Bezos will keep 25% of Amazon’s shares, worth about $36 billion. Even with only 2/3 of his company’s stock, Mr. Bezos remains the world’s richest person with a net worth of $108 billion.
The former couple announced their divorce four months ago. The divorce itself has been amicable from start to finish despite some of the dark twists and turns it took along the way. The National Enquirer and its parent company, the American Media Inc., reported that Mr. Bezos was romantically involved with former Los Angeles TV anchor Lauren Sanchez.
The tabloid published intimate text messages and photos between Mr. Bezos and Lauren Sanchez. In response, Mr. Bezos accused American Media of sending him emails that he said amounted to “blackmail.” Mr. Bezos’ security consultants believe that the leak was the result of a Saudi hack into Mr. Bezos’ phone.
Jeff Bezos and his team claim that the National Enquirer and Saudi Arabian government targeted him because of his ownership of the Washington Post. The Post reported on the murder of Jamal Khashoggi, one of its columnists that had been killed on the orders of the Saudi crown prince. The Post is also a frequent critic of the Trump Administration, which the National Enquirer has supported since the 2016 elections. Both American Media and the Saudi government deny the allegations.
Aside from the bizarre political and national security implications behind the divorce, the Bezos divorce has been a textbook example of a quick and amendable divorce, at least to the public eye.
Was MacKenzie Bezos Compensated Too Little?
The 75/25 percent split of Amazon is somewhat eye-raising given the divorce and property law in Washington State, where the Bezos are domiciled. Washington is a community property state; the spouses jointly own all assets obtained during the marriage.
It is also a no-fault state. Mr. Bezos’ affair plays in part in the legal division of their marriage. Assets do not have to be divided “50/50,” but they are to be divided “fairly and equitably.” However, most people would agree that an equal split is the fairest division.
The Bezos division appears to deviate from the standard 50/50 division of community property divorces, but there are several factors that might make this division fairer than it appears at first glance. First, the Bezos only announced the division of Amazon. They did not share how the remainder of their assets will be divided. It’s very plausible that the world’s wealthiest couple would have other significant assets that Ms. Bezos might also acquire.
Second, Ms. Bezos voluntarily entered into this arrangement, presumably with the advice of some of the best divorce attorneys in the world. The “fair and equitable” standard is a very flexible one.
The Bezos may have other reasons for the 75/25 split that might make this division fairer than the math might suggest. For instance, Amazon’s stock slightly dipped after they first announced their separation. Although the stock value has recovered since, a long and bitter public divorce battle might result in a greater loss for both the Bezos.
Finally, the 25% of Amazon stock that Ms. Bezos is maintaining is worth $36 billion. It’s difficult to believe that receiving assets worth $36 billion is somehow unfair.
Was MacKenzie Bezos Compensated Too Much?
On the other hand, $36 billion is arguably too much value for any ex-spouse to receive. Mr. Jeff Bezos is the founder of Amazon. Although Mackenzie Bezos helped him, $36 billion is grossly disproportionate to the work she put into Amazon.
In a contemporary marriage, the spouses are considered equal partners. If there is any woman who embodies the value that a wife might bring to the creation of a successful business, it’s Mackenzie Bezos. Jeff and Mackenzie married in 1993. Jeff informed his new wife that he wanted to quit his job and move across the country from New York, where they were living at the time, to Seattle to start a new company.
Mrs. Bezos fully supported him and became Amazon’s first employee. Among her first duties was to negotiate freight contracts to transport the products that people wanted to buy. She also served as the company’s first financial officer until Amazon was large and profitable enough to hire its own accountants.
The Bezos founded the company together right after they got married and they both spent a significant part of their lives building it up. The Bezos have four children together, but Amazon.com, Inc. could be accurately described as their fifth child.
Moreover, community property law is about the partnership of the marriage. Even if Mackenzie Bezos had not played an active role in the creation of Amazon, she would still be entitled to her fair share of the Bezos’ community estate.
Many people have a notion that it is unfair for a wife to receive half of a successful entrepreneur’s business if the wife was not involved with the business. This idea is misguided as the law examines the contributions that the spouses brought to the marriage, not just to the business.
Cleaning the house and taking care of the children are just as important to the marriage as running a profitable business. Americans had previously ignored the importance of domestic household roles –domestic roles are difficult to quantify as no income is earned.
Nevertheless, the states has increasingly come to recognize that stay-at home mothers (and fathers) can be just as important in the success of a business as the breadwinner’s active involvement at the office. The spouse who maintains the home frees the other spouse to focus on work.
Businesspeople who don’t have to leave work early to pick up the children or who can work overtime because they know their partner is taking care of the home front are more likely to be successful. Businesspeople that don’t have to schedule their own doctor’s appointments, spend time at the grocery store, or take time off to drop the kids off at soccer practice can focus on work without distraction.
The contributions of domestic spouses should not be ignored, even though the nature of the roles means that they will be largely invisible to society. Mackenzie Bezos played such a domestic role during her marriage with Jeff Bezos, but she was still his equal partner, whether it was at home or in the office.
$36 billion is excessive, but if anyone disputes with the amount of money that Ms. Bezos has can acquire after a 25-year marriage, they are missing the big picture. Divorce only divides the pot – if Americans have an issue with the division of the pot, they should ask how the pot got so big. The issue is not with how we divide assets upon divorce, but with the fact that one couple was able to amass such a fortune in the first place.