By Serach Nissim
A new book has revealed that the WeWork co-founder received a larger payout from the office sharing giant than previously known.
The book entitled, “The Cult of We: WeWork, Adam Neumann and the Great Startup Delusion”, released on Tuesday by Wall Street Journal reporters Eliot Brown and Maureen Farrell, says that Adam Neumann may have extracted over $2.1 billion from the company since its founding. That enormous figure includes stock sales, cash settlement payments and WeWork shares. As reported by Crain’s NY, the most troubling part about it is how all this money was made by then CEO while the company lost over $11 billion and fired thousands of employees following its failed initial public offering in 2019.
As per Crain’s, previously it was thought that Neumann had sold around $300 million in WeWork shares, as per reporting from Axios. The book authors, however, say that We Holdings LLC, an entity controlled by Neumann, sold shares of WeWork in almost every funding round, including the earliest ones, for a total of over $500 million.
The book also highlights how Neumann cashed out heavily upon his exit from WeWork. Investors paid him enormously just to get him to give up control of the company. When he was kicked out of his CEO position two years ago, he was set to walk away with $1 billion in potential stock sales and cash payments as part of a severance package. The large payout led to a number of lawsuits between Neumann and SoftBank Group Corp., the company’s major investor. By the end of those settlement agreements, We Holdings LLC was allowed to sell $578 million in stock in February and Neumann himself received $198 million in cash payments, as per filings.
WeWork’s new CEO, Sandeep Mathrani, said the company is currently on track to be profitable by the end of 2021 and has made great strides to cut its notoriously exorbitant expenses. He said he is optimistic that the market for flexible-use office space will improve post-pandemic. Neumann still owns tens of millions of shares in the company, as per Bloomberg. WeWork has plans to go public soon through a merger with special purpose acquisition company BowX Acquisition Corp —a method many startups are now using which has less restrictions than IPOs. Shares are slated to be worth over $825 million, based on the price of BowX.
A representative for WeWork and a spokesman for Neumann declined to comment.