Elizabeth R. Koch Divorce

Recently I became aware that Elizabeth R Koch (daughter of Charles and Liz Koch) recently got divorced in 2023. The tip came through my blog site as a comment to one of the blog posts I had written previously. Typically it is not easy for me to look at court records as each county has the records and sometimes you need credentials to access them. The alternative is using a website called PACER that offers the legal documents however the issue is many of the documents can be sealed and the courts often charge for documents. It is even harder to know what information the documents contain until you actually purchase them.  

Elizabeth initiated the divorce from her former husband Jason Peter Kakoyiannis. The couple was married on June 9th, 2012 and the separation date was February 27th, 2003 with the divorce being finalized in August 30th, 2023 in Los Angeles, California. The divorce records show that there were no children which is accurate considering I have never seen any pictures of Elizabeth with her own children. As part of the divorce many of the details are hidden from the public. One of the interesting aspect of the divorce is the mutual waiver of spousal support. Both parties agree that under new circumstances will either seek financial support from the other. All this ensures is that both spouses start clean from a financial perspective. 

Elizabeth had three different attorneys that represented her. Alyssa Dickerson, Dana Lowy (she signed off on the legal paperwork), and Lisa Meyer.  Lowy and Meyer both work for a law firm that handle the high profile/complex family law cases. Her former husband Jason only had one attorney Laura Wasser. 

Jason (Elizabeth's former husband) himself is no slouch as he went to Brown University for undergraduate school, then he earned a master's degree from Yale University, and then went to University of Southern California for a law degree. He started his career working as an attorney and then moved over to the marketing business development side and now is a managing partner at a firm called Ferment. Jason makes a small apperance in a birthday video to Charles Koch here. 

The financial aspects of a divorce are not public like other divorces because there is a "confidential further stipulated judgment" which already has financial arrangements for both parties. Said in a different way this is probably a prenuptial agreement to determine in the event of divorce what would happen to both parties. Over the decades the Koch family has been private in terms of legal proceedings. For example after the Koch vs. Koch trial Charles, David, Bill, and Frederick all signed a agreement that they could not discuss the details of the case ever again. Koch Industries itself for many decades has remained fairly private. Even for instance the revenue that Forbes publishes each year Koch will never confirm if that number is 100 percent accurate but just uses it as a range for roughly what their revenues are.

Previously I had blogged about Elizabeth Koch and her relationship with a previous boyfriend with its ups and downs. Actually the post I had on Elizabeth Koch is the most popular blog post ever on my blog. Last year Elizabeth spoke with the New York Times regarding the different charities she was involved with to help people with their quote perception boxes. She does admit when she was younger she suffered from panic attacks and meltdowns and was taking pharmaceutical drugs to help with her mental illness. She admits that she has taken psychedelic drugs in the past even though that they are currently illegal. She had mentioned that when she took the psychedelics she felt as if Looney Tunes characters were coming out of her body. At one point she went to Peru and took ayahuasca and then started vomiting and at one point found herself in a nudist colony. I honestly wonder what Charles Koch would think of all this. For the New York Times article Charles Koch declined to be interviewed but had mentioned that he was delighted and couldn't be more proud of his daughter for trying to make the world a better place. Having said all this I still believe that Elizabeth Koch is a very fascinating person however I could maybe see how some of her personality traits may not work in a long term relationship.

Her brother Chase Koch is also divorced and was divorced in 2020. I did a blog post about that here. It is interesting that two children that came from parents who have been married over half a century now find themselves both divorced. Liz Koch herself was divorce before she was with Charles Koch. However it is hard to know upon closed doors what really happened in each case as there are always two different sides to the story. Elizabeth was married for roughly eleven years and her brother Chase was married for roughly 10 years.

The effect of Elizabeth getting divorce doesn't impact the future of Koch Industries however given that Elizabeth didn't have children. Charles Koch in a 2023 Forbes interview mentions that he has gifted Chase and Elizabeth equal amounts of non-voting shares of Koch Industries. Non-voting just means that as shareholders they don't get a say in how the company is run (from a shareholder perspective) or can control the company, however still in theory should receive the dividends generated from Koch Industries. In the future I am curious to see what happens with the ownership of Koch Industries after Charles Koch passes and there will be many potential shareholders with Chase, Elizabeth, Mary Julia, David Jr. and Mark Koch. 

Koch Industries Inc. Historical Dividends 1984-2024

Recently I did a analysis on the historical dividends of Koch Industries. I have data going back to 1984 and have recent data up until 2024 on the dividends of the company. This represents 40 years of data which is a pretty good data set given how long Koch Industries has been around for. In order to obtain the historical information going back to 1984 I had to obtain access to historical Forbes, Fortune, Wichita Eagle and other articles that have been written over years about the Koch brothers and Koch industries.

Back in the 1960s Koch Industries paid out a pretty small dividend to shareholders. In 1961 the company (by my estimation) had roughly $117,000,000 of revenue, profit of $3.5 million (the revenue was derived based off historical single digit profit margins), and Koch Industries paid out total dividends of $150,000. The year that Fred Koch died in 1967 Koch Industries had about $177,000,000 of revenue but only paid out dividends of $300,000 (according to Sons of Wichita). Between the start of the 1960's to the end of the decade the dividends for Koch Industries more than doubled. Charles Koch didn't take over Koch Industries until 1967 (after his father Fred Koch passed). 

In order to try to best estimate the historical dividends for Koch Industries what I had to do is take the revenue of the company utilizing sources like Forbes and Fortune. They both estimate the revenues of Koch every year and then I had to apply a profit margin assumption for the company. In this 1974 Forbes article Charles Koch doesn't exactly say what the profit of Koch Industries is by confirms that $100 million of profit is an accurate number. The company had $2 billion of revenue in 1974 which would make the profit margin roughly 5%. However, by the 1980's the profit margin of Koch Industries was only 3%. 

By the late 1990's the profit margin was only 1% as Charles and David Koch had to battle their brothers and other Koch Industries shareholders which led to a major distraction where questionable deals. It should be pointed out that historically Koch Industries has gone through ups and downs like they did in the 1970s losing money with the estimated lost ranging from $50 million to $80 million-within their shipping business, then again in 1998 when they purchased Purina Mills with an estimated loss of $120 million on that business). 

When I evaluate the historical profit margin of Koch Industries in the past from either published data or estimates I get roughly a 2% profit margin. I assumed a 2% profit margin from 1984 until 2002. After the Purina Mills loss and the Koch vs. Koch lawsuit was over the leadership decide to make changes which I believe would result in higher returns over time. For that reason the profit margin from 2003-2011 is 5%. In 2012 it was estimated that Koch Industries had a profit margin from Forbes of 10%. However I believe this is somewhat overstated as Koch industries over the past decade or so has gotten into a lot of different technologies and even Chase Koch has mentioned that a lot of these projects are "pre-revenue" (this was covered here) or in other terms not making any money. My estimate would be that Koch might have to write down some of the businesses under Koch that are related to technology. With that all said beginning in 2011 I assumed the profit margin was on 7% (compared to 5%). This also reflects the fact that historically Koch Industries was tied to the oil and gas business (which historically made up a large percentage of their revenue and profit) and we finally business which can have much lower margins than other businesses.

There might be questions of how do I know that this data is accurate and this is a good and valid question. One way to check is Pro Publica within the past couple of years published information regarding the top income earners which included Charles and David Koch. Pro Publica had estimated that from 2013 to 2018 that David Koch had roughly $234,000,000 of annual income each year. When I look at the estimates that I have for 2013 to 2018 I come up with an average of $231,000,000 which is fairly close. However there are some things for instance that I'm not including (for example any salary or bonuses that Charles and David Koch earn from Koch Industries). 

The growing dividends over the years has lead to the Koch Industries shareholders being able to enjoy their investment. David Koch would enjoy toys from now and then. He mentions in this article that in the 1980's had only one Ferrari and not 15. David would enjoy taking a private jet with his close friends and visit Africa, the Himalayas and the Amazon jungle. In addition to this he in the past he has had a $100,000 Alaskan cruise where he rented a minesweeper that was converted into an excursion ship, and he would charter three helicopters before getting into the boat. Even in the 1990's David had a car and driver pick him from his office (however the family didn't have a social secretary). Later on the Koch family had a chef and three nannies. In addition to spending money on himself David also would regularly give over half of his income to charity). In this post I covered David Koch and his lifestyle. Even before David had his extreme wealth he did like to live a little large. In August 1993 David through a lavish party on a Saturday night after beating prostate cancer at his Southampton estate. David spent $100,000 just on the fireworks, With dancing by the tennis courts in pool and had several famous sous chefs that had made to order omelets at 3:00 AM. Now that is a life! I covered the different homes and lifestyle of David Koch in this article. 

The growth of Koch Industries was fueled by a couple of things. The first is Koch Industries policy of reinvesting 90% of the profits back into the company (I don't know of any other major company public or private that does this). Reinvestment of profits back into the company compounds quickly over time. Also Charles Koch has spent his whole career focusing on ensuring that his company can add value and provide products and services that customers value. Believe it or not this isn't typical of most companies. Many companies just believe here is our product and the customer needs to accept it without thinking through if it provides value, how it can be improved, and the wants and needs of customers. The company back in 1960 was only paying out $150,000 to all Koch shareholders, which grew to $28 million by the early 1980's, and I estimated in 2024 the dividends Koch Industries pays out is roughly $691 million (based on a profit margin of 7%, corporate tax rate of 21%, and reinvestment of 90% of the earnings back into the company). This would say over between 1984-2024 the dividends grew at an annual rate of 10%. Charles Koch and his company have rewarded shareholders over many decades with adding more commas and zeroes to their dividend checks and the main shareholders are now billionaires as a result of the long standing growth.