Mitt Romney testified under oath in 1991 that the ex-wife of Staples founder Tom Stemberg got a fair deal in the couple’s 1988 divorce, even though the company shares Maureen Sullivan Stemberg received were valued at a tenth of Staples’ stock price on the day of its initial public offering only a year later
Under a plan approved by Romney and other board members in 1988, Maureen Sullivan Stemberg was given 500,000 shares of Staples common stock, then awarded a special “D” class of stock in exchange for those shares. She sold about half of the shares only to learn that those sold holdings would have been valued higher in a 1989 public offering of Staples stock.
In testimony Romney said he backed the deal to give Stemberg’s wife a special class of stock “as a favor to Tom. It was something that was done in my opinion, it was initiated as a favor. Tom needed to have a settlement with his wife so that was the genesis of it.” But Romney insisted the board’s decision was made “in the best interests of the company’s shareholders.”
Romney acknowledged at the time that there were no other cases in which a separate class of securities was created for the benefit of one individual. He also said that as an investor through Bain, he had never seen that kind of a device used before.
Well, you might indeed argue that donating a huge amount of money to somebody by the company was, indeed “in the best interests of the company’s shareholders” if it helped them avoid a personal mess, but if it’s the right thing to do is something you can disagree on..