Is Eric Schmidt's love life putting shareholders in danger?

We hear that Marcy Simon, the PR consultant briefly installed in Google's New York office, is more than a mere mistress to Google CEO Eric Schmidt. The rumors are resplendent: That Schmidt funded Simon's acrimonious divorce; that he is separating from his wife Wendy; that he is buying a $25 million Manhattan apartment in which to live with Simon. But why should anyone care about such tawdry personal details? If the latter two bits of hearsay have any truth to them, then shareholders should be extremely worried.



A divorce would put part of Schmidt's multibillion-dollar Google stake on the market, potentially depressing the share price. And a recent study has found a strong correlation between the purchase of an expensive house by the CEO and a drop in his company's shares. Schmidt likes to laugh off his affairs, telling confidants, "What can I say? I just like the ladies." (We note the use of the plural, especially since Schmidt appears to have a habit of two-timing.)

It's time for Google's board, however, to tell Schmidt that his love life is no laughing matter. At best, it's an unneeded distraction as Google faces renewed attacks from rivals and growing unrest from partners. At worst, it's a lapse of personal ethics — especially his installing Simon as a Google consultant — that sets a corrupting tone for a company that pretends to instruct employees not to be "evil."

What would be the non-evil thing to do here? Perhaps Schmidt's marriage is on the rocks; perhaps he's sincere in his intention to make an honest woman out of the former Duchess of West Chelsea. If so, he should get on with matters, and disclose the disposition of his personal fortune in Google stock to shareholders. Given the recent findings on CEOs tanking their companies' stocks after buying expensive houses, perhaps he should disclose his real-estate plans, as well. (If he does intend to marry Simon, perhaps the pre-nup ought to be thrown into the SEC filing, while he's at it.)

But we suspect Schmidt doesn't want to disclose any of this. Not because he's worried about privacy — but because his intentions with respect to the "ladies" in his life are, well, evil. A legal disclosure would require some finality. And, from all appearances, it seems like Schmidt prefers his affairs unsettled.