The stink around WeWork Chief Executive Adam Neumann has apparently attached itself to JPMorgan CEO Jamie Dimon.
By Howard M. Riell
Some are complaining that the bank went too far in growing Neumann’s personal loans. Neumann stepped down last week as CEO of WeWork’s parent company, We Co. The problem, according to many, was too much spending.
“JPMorgan, along with UBS and Credit Suisse, helped Neumann with a $500 million personal line of credit that allowed him to buy buildings that he then leased back to WeWork — drawing backlash when the dealings came to light ahead of the now-defunct IPO,” the New York Post has reported. “That same credit line also allowed Neumann to cash out a big chunk of his shares, which also angered many investors, according to reports.”
All told, the Post continued, JPMorgan “provided Neumann with $97.5 million in loans, according to filings. And Dimon was known to have dealt with Neumann on a one-to-one basis, sources said. JPMorgan later became We Co.’s lead IPO underwriter, a deal that should have resulted in $100 million in fees. But demand for the shares fell short of expectations, in part due to questions about Neumann’s self-dealing. The IPO was called off and Neumann was out a week later.”
Days ago, WeWork’s Board of Directors announced that Neumann had decided to step back from his role as CEO, and will continue on as non-executive chairman of the board. WeWork’s Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman, have been named co-CEOs of the company.
Said Neumann in a statement, “As co-founder of WeWork, I am so proud of this team and the incredible company that we have built over the last decade. Our global platform now spans 111 cities in 29 countries, serving more than 527,000 members each day. While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive. Thank you to my colleagues, our members, our landlord partners, and our investors for continuing to believe in this great business.”
Added Artie Minson and Sebastian Gunningham, “We would like to thank Adam for his vision and his passion in building WeWork over the past 9 years. Our innovative membership model, beautiful designs and inventive community offerings have changed the way individuals and enterprises around the world think about their workspaces. It is an incredible honor to lead WeWork during this important moment in the company’s history. Our core business is strong and we will be taking clear actions to balance WeWork’s high growth, profitability and unique member experience while also evaluating the optimal timing for an IPO. We are committed to the continued success of our members, partners, employees and shareholders on this new journey.”
