The regulation doesn’t explicitly require controlling shareholders to reveal prenuptial or different agreements that might have an effect on the disposal of their firm stakes within the occasion of divorce. But some consultants mentioned they might assist such a requirement.
“It’s absolutely material, and as a result it should be disclosed,” mentioned John C. Coffee Jr., director of the Center for Corporate Governance at Columbia University. In principle, he mentioned, any provision that may reassure buyers would result in the next share worth. “There’s no question it’s in the best interests of shareholders,” he mentioned.
Charles M. Elson, a professor and director of the company governance heart on the University of Delaware, additionally helps the disclosure of prenuptial agreements. “No one thought a Bezos divorce was a risk factor” for Amazon, Mr. Elson mentioned. “Now no one knows how this will turn out. From a shareholder perspective, it’s certainly material.”
Mr. Larcker mentioned requiring public disclosure could be going just a little too far, contemplating the privateness points concerned. But he agreed that, at least, a board wanted to be stored absolutely knowledgeable.
“Once a divorce settlement is underway,” he mentioned, “the board needs to think about whether the ex-spouse will demand a board seat, whether they are planning to liquidate their shares or perhaps sell as a block to an investor, maybe an activist. All of these actions can have a real impact on shareholder value.”
So far, buyers have hardly reacted to the Bezos breakup — Amazon’s shares are up barely for the reason that announcement. That could be partly as a result of the couple went out of their solution to characterize the break up as amicable, saying they plan to “continue our shared lives as friends.”
When many billions of are at stake, amicable divorces are uncommon, even after they begin out that approach. “Most divorces start out contentious and end contentious,” mentioned Samantha Bley DeJean, a matrimonial lawyer in San Francisco, who has labored with many Silicon Valley entrepreneurs and represents Angelina Jolie in her custody battle with Brad Pitt. “When they start out amicably, you hold out some hope that they’ll stay that way, but in my experience it only gets worse.”
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