Ousted WeWork CEO Adam Neumann can still reportedly name directors to WeWork's board, even though he left the company
- Former WeWork CEO Adam Neumann retains the right to name directors to its board, even after being ousted from the troubled coworking company, Fast Company reported Monday.
- As part of his exit agreement with WeWork, Neumann can name a director and a board observer while the company remains private and two more board members if it goes public, according to Fast Company.
- There are some conditions for him to exercise that power, though - he has to repay the money SoftBank loaned him, and he has to abide by his non-compete agreement.
- Part of the reason why WeWork's first attempt at going public flopped was because of Neumann's role at the company and his personal deals with it.
- Read more WeWork news here.
Adam Neumann may no longer be WeWork's chairman or CEO, but he could be able to continue to exert influence on the troubled real-estate company for years to come.
As part of his separation agreement with the company, Neumann has the right to name both a director and a non-voting observer to WeWork's board while it remains private, Fast Company's Katrina Brooker reported on Monday. If the company goes public, Neumann will be able to name two additional directors to the company's board, according to the article.
Neumann's ability to name directors to WeWork's board - whether the company is public or private - is contingent on him repaying the $500 million loan SoftBank gave him as a part of his exit package, Fast Company reported. He also has to continue to abide by a clause in that agreement that forbids him from competing with WeWork for four years. Additionally, should the company attempt to go public again, the underwriters of the move could block Neumann from naming additional directors, according to the article.
A representative for Neumann declined to comment. A WeWork spokesperson did not immediately respond to emails seeking comment.
Neumann stepped down as CEO of WeWork in late September. At the time, the company was attempting to go public but was facing significant pushback from potential investors, in part over a series of personal transactions Neumann or his family members had with the company. He later resigned as WeWork's chairman as part of SoftBank's $9.5 billion bailout of the company.
Following WeWork's failed IPO attempt, SoftBank and the company's senior management have been trying to figure out how to turn the company around. As part of that effort, WeWork is planning on laying off thousands of workers later this week.
The new report also mentions that in a meeting between SoftBank officials and top WeWork managers last week, SoftBank CEO Masayoshi Son said he wanted WeWork - known for its huge losses and massive cash burn - to be profitable by 2021. Last quarter, the company lost $1.3 billion on $934 million in sales.
Read the full report from Fast Company here.
- Read more:
- SoftBank could have just walked away from WeWork and its $9 billion investment. Business experts explain why it didn't.
- SoftBank likely had the Vision Fund on its mind when it decided to rescue WeWork
- WeWork used massive discounts - in some cases, essentially giving away space for 2 years - to try to poach customers from rivals
- WeWork opened 400 locations in 3 years. In some cases, it used deep discounts to convince existing customers to relocate to help fill them.