Ex- WeWork CEO is denied full payout
Ousted co- founder Adam Neumann was to get $ 185 million pending a stock sale. SoftBank backed out.
WeWork and its primary backer, SoftBank Group Corp., paid Adam Neumann only a portion of the $ 185million fee that was part of his controversial exit package as chief executive a person familiar with the transaction said.
The fee was tied to a noncompete agreement for Neumann, said the person, who asked not to be identified because the details are private. A portion of the payment depended on the completion of a deal to acquire WeWork stock from Neumann and other shareholders, the person said. SoftBank backed out of that stock transaction, a move that is the subject of a lawsuit involving Neumann.
The status of Neumann’s exit package came into focus Monday when Marcelo Claure, a SoftBank executive and WeWork executive chairman, was asked about it at a Wall Street Journal technology conference. He said the deal was no longer in effect and declined to elaborate, citing the legal dispute. It’s unclear how much Neumann was paid.
Representatives for SoftBank and WeWork declined to comment. A spokesman for Neumann didn’t immediately respond to a request for comment.
Neumann’s promised $ 185- million fee was part of a larger deal on his way out of WeWork that included the chance to sell $ 1 billion in stock and a $ 500- million loan. The package, part of SoftBank’s bailout of the coworking start- up last fall, felt like salt in the wound for many WeWork employees, who had just watched their company’s initial public offering plans crumble. Weeks after Neumann walked away, thousands of WeWork jobs were eliminated.
Since then, though, Neumann’s generous compensation hasn’t all come through. Notably, SoftBank reneged at the last minute on the tender offer in which Neumann would have been able to sell his shares. That prompted a lawsuit from both WeWork and Neumann, saying SoftBank broke its agreement to buy $ 3 billion in shares from Neumann, investors and employees. That lawsuit is ongoing.