WeWork chief Adam Neumann aimed for a coup after the start of the IPO and the news that he had smoked the pot suspended
Adam Neumann (pictured above), co-founder and chief executive of We, the company that owns shared office space company WeWork, faces a potential coup led by investors who are not satisfied with losses and his control over the company
Adam Neumann, the sometimes exaggerated CEO of the company that owns WeWork, faces a possible coup by investors who are not satisfied with the increasing losses of the start-up of the shared office space and his grip on the company.
The Japanese SoftBank, the largest investor in WeWork & # 39; s mother, We Co, is investigating how to replace Neumann, four people familiar with the issue that was said Sunday.
The plan to expel Neuman would have the support of some on the We company board of directors, the sources said. The exact number of drivers that are against Neumann is not clear, reports the Wall Street Journal.
One option that SoftBank is considering is asking Neumann to serve as an interim chief executive officer, while a headhunting company finds an external replacement, one of the sources said.
A WeWork location (pictured above) in the financial district of Manhattan
No challenge has yet been submitted for Neumann, the sources said. We will hold a board meeting this week and the issue of his leadership could then be raised, according to the sources.
The possible expulsion comes after we postponed his initial public offer last week, with investors unhappy about losses, as well as Neumann, who allegedly smoked marijuana with friends on a private jet flight from New York to Israel, the Journal reports.
The aircraft operator, after discovering the pot hidden in a grain box for the return flight, was so upset that Neumann was dumped and had to find another flight, the Journal reports.
Neumann has not only been a high point for founding WeWork with Miguel McKelvey nine years ago, he is also known for his energetic style and penchant for excess.
Combined with his entrepreneurial skills and his willingness to take risks, Neumann WeWork helped generate more than $ 2 billion in annual income to become the most valuable startups in the country.
His style, however, has come under fire for mounting problems at WeWork. Investor interests include special voting shares held by Neumann, enabling him to dismiss dissident board members and to shoot down challenges for his authority.
It was a bad sign for the relationships between SoftBank and WeWork when Neumann spent a meeting of executives last week supported by the bank and organized by its CEO Masayoshi Son (pictured above)
In a sign of acidifying relationships between SoftBank and WeWork, Neumann did not participate in a meeting of executives of companies supported by SoftBank that took place in Pasadena, California last week.
The meeting was organized by SoftBank CEO Masayoshi Son, according to two people who were familiar with the case.
SoftBank had hoped for more profit for investors for its second $ 108 billion & # 39; Vision Fund & # 39 ;. But the postponement of We & # 39; s IPO last week derailed that plan.
The bank was already aware that it had invested $ 47 billion in January, but saw it fall to $ 10 billion this month due to skepticism from stock market investors, Reuters reported.
Venture capital company Benchmark Capital, another major investor in We, would also like him to step aside, one of the sources said.
Benchmark, SoftBank and the Chinese private equity company Hony Capital each have one representative on the seven-person board of We Company, including Neumann.
And then there is retired Goldman Sachs investment banker Mark Schwartz, an unaffiliated member of the We board, previously on the SoftBank board.
The position of Hony Capital as to whether Neumann should remain CEO could not be determined immediately.
The sources have asked not to be identified because the issue is confidential.
We and SoftBank refused to comment, while Neumann, Schwartz, Benchmark Capital and Hony Capital could not be reached immediately for comment.
If a board challenge against Neumann turned out to be successful, this could end with what happened to Uber co-founder Travis Kalanick, who resigned as CEO of the starting ride-up in 2017 after a rebellion of his board over a series of scandals, including allegations of making a chauvinistic and toxic work culture possible.
Uber replaced Kalanick with an outsider, the former Expedia Group Inc. CEO Dara Khosrowshahi, and completed his IPO last May.
If a management challenge against Neumann was successful, this could follow what happened to Uber co-founder Travis Kalanick (pictured above), who resigned as CEO of the starting start-up in 2017
Uber replaced Kalanick with an outsider, former CEO of Expedia Group Inc. Dara Khosrowshahi (photo above), and completed his IPO last May
It is not uncommon for founders of fast-growing start-ups to be eccentric and tightly control their companies, even if they are trying to attract investors on the stock market.
Neumann, however, has been criticized by investors and corporate governance experts for arrangements that went beyond the usual practice of having majority voting through special share classes.
These include giving a vote to his legacy in his replacement as CEO and binding the voting rights of shares to how much he donates to charities.
Neumann pictured above with his wife Rebekah, who was once part of a plan to help his successor choose. The pan was demolished after criticism from potential investors
Neumann has also entered into various transactions with We over the years, making the company a tenant of some of its properties and charging rent. He has also secured a $ 500 million credit line from banks that use company shares as collateral.
After criticism from potential investors, Neumann agreed to some concessions without renouncing majority interests. He agreed to give We Company all the profits he received from real estate transactions that he entered into with the New York-based start-up.
No member of the Neumann family will be on the board of the company and each successor will be selected by the board, deleting a plan for his wife and co-founder, Rebekah Neumann, to help the successor choose.
. (TagsToTranslate) Dailymail (t) news (t) japan