(Bloomberg) – Adam Neumann drew more wealth than previously thought from his tumultuous time at WeWork, according to a new book about the coworking giant and its co-founder.
Neumann-controlled entities have earned more than $ 2.1 billion from the company since its founding, including share sales, cash settlement payments, and WeWork shares, all while the company burned more than $ 11 billion and laid off thousands of workers after their failed attempt. in an initial public offering in 2019, according to recent company filings, as well as reports from The Cult of We: WeWork, Adam Neumann and the Great Startup Delusion, a book to be published Tuesday by Wall Street Journal reporters Eliot Brown and Maureen Farrell.
Part of that $ 2.1 billion total comes from We Holdings LLC, a Neumann-controlled entity, which sold WeWork stock in nearly every funding round, including the first, the authors wrote. Those stock sales, most of which were only available to Neumann or a select few executives, totaled more than $ 500 million, according to the book. In previous 2019 reports from Axios it had been estimated that Neumann had sold around $ 300 million. The remainder of Neumann’s total payment can be pieced together from company files, including a May document related to WeWork’s plans to go public soon through a merger with a blank checking company.
A WeWork representative and a Neumann spokesperson declined to comment.
Neumann’s huge payout highlights how the former CEO used his voting control over WeWork to advance his own interests at every stage in the life of the company. Neumann’s meteoric rise, rapid fall, and golden parachute have been recorded in depth, but the book adds new details on how far he was able to enrich itself as the company grew.
Listen to the podcast: Foundering: The WeWork Story
Neumann also profited heavily from his bitter exit from WeWork, during which investors abruptly paid for him to relinquish control. When he was ousted from the top job two years ago, he was ready to walk away with $ 1 billion in potential stock sales and cash payments as part of a severance package, a figure that has already sparked outrage. That deal quickly became embroiled in a series of lawsuits between Neumann and SoftBank Group Corp., WeWork’s largest investor.
After the dust and lawsuits settled, Neumann still ended up on top financially. We Holdings LLC was able to sell $ 578 million in stock in February as part of the settlement agreement, according to company documents. The filings also show that Neumann himself received $ 198 million in cash payments as part of his departure.
According to filings, Neumann still owns tens of millions of shares in WeWork, which will go public later this summer through a merger with special-purpose acquisition company BowX Acquisition Corp. His shares are worth more than $ 825 million. , based on the BowX price.
WeWork, meanwhile, is pushing to move past its sparkling Neumann-led era. Its new CEO, Sandeep Mathrani, said the company is on track to be profitable by the end of the year and has taken aggressive cost-cutting measures in the last year and a half to cut its once-famous expenses. WeWork also expects its flexible-use offices to be in greater demand in a post-pandemic world where office workers have new and changing preferences for working in person.
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