Rewind the clock by a decade, and Leon Black made headlines in RBR+TVBR because of the strong dislike of the billionaire by Sirius XM shareholders. At the 2010 annual shareholders’ meeting, more voted against Black than for him as he sought to remain on the Board of Directors.
Who knew then that the founder of Apollo Global Management, which today has a majority stake in Cox Media Group, would end up emerging as a despised individual who would end up stepping down due to his ties to one of the most infamous American financiers of the modern era?
Apollo on Monday announced that its “Conflicts Committee” and its board of directors completed a previously announced independent review of Chairman and CEO Leon Black’s previous professional relationship with Jeffrey Epstein — the convicted sex offender tied to the trafficking of minors who died in prison.
The review began in October, with the Committee retaining Dechert LLP to conduct an investigation. What did it find?
- Apollo never retained Epstein for any services and Epstein never invested in any Apollo-managed funds
- Epstein regularly advised Black on trust and estate planning, tax issues, philanthropic endeavors, and the operation of his Family Office
- All fees paid to Epstein by Black or his Family Office were for bona fide tax, estate planning and other related services, and the amounts were intended to be proportional to the value provided by Epstein
- Epstein’s advice was vetted by respected professional advisors
- Dechert found no evidence that Black was involved in any way with Epstein’s criminal activities at any time
The findings of the report are consistent with statements made by Black and Apollo regarding the prior relationship.
In producing the report, Dechert had unrestricted access and examined more than 60,000 pieces of communication, including emails, text messages and documents, and conducted interviews with more than 20 relevant individuals, Apollo says.
While that report seemingly appears to be a positive one for Apollo, the ties between Black and Epstein are perhaps too great to overcome.
As such, Black on Monday informed the Board of Directors that he will retire as CEO on or before July 31. But, he will continue as Apollo’s Chairman.
That will be a largely ceremonial position, as the Executive Committee, with the support of the Apollo board, unanimously approved Marc Rowan as the new CEO.
Rowan is an American billionaire businessman and a co-founder of Apollo.
In addition, Apollo’s Board will be expanded and will include four new independent directors. Pamela Joyner, an esteemed business leader and founder of Avid Partners, and Siddhartha Mukherjee, a world-renowned physician and scientist, have been appointed to the Board, effective March 1.
Apollo expects to appoint two additional independent directors “as soon as practical.”
In addition, Apollo Co-Presidents Scott Kleinman and James Zelter have been named to the board and will take on increased responsibility for the day-to-day operations of the company.
Without delving into his relationship with Epstein, Black offers comments expressing pride in Apollo, created in the early 1990s by him and Rowan. It is publicly traded, after conducting a successful Initial Public Offering in 2011. “Given the extraordinary strength and depth of Apollo’s management team and consistent with best-in-class governance practices, I have advised the Apollo Board that I will retire as CEO on or before my 70th birthday in July and remain as Chairman,” Black said. “In that role, I look forward to focusing on strategic planning, growth initiatives, investment opportunities and supporting Apollo, which has been my life’s work, in whatever ways I can.”
Black also requested that the Apollo board and the Executive Committee evaluate and consider, subject to required corporate and regulatory approvals, “meaningful new measures to further enhance Apollo’s corporate governance.”
This includes moving to a “one share, one vote” structure, and the elimination of Class C voting stock.
Lastly, Apollo has retained WilmerHale to review its reputational risk management processes and provide recommendations for enhancement.
