(Bloomberg) — According to a new book about the co-working giant and its co-founder, Adam Neumann has gained more wealth than previously thought from his tumultuous time at WeWork.
Entities controlled by Neumann have made more than $2.1 billion from the company since its inception, including stock sales, cash payments and WeWork stock — while the company burned more than $11 billion and laid off thousands of employees after its failed attempt. to an IPO in 2019, according to recent company filings and reporting from The Cult of We: WeWork, Adam Neumann and the Great Startup Delusion, a book to be released Tuesday by Wall Street Journal reporters Eliot Brown and Maureen Farrell.
A portion of that $2.1 billion total comes from We Holdings LLC, an entity controlled by Neumann, which has sold WeWork shares in nearly every funding round, including the earliest, the authors wrote. Those stock sales, most of which were available only to Neumann or a select few executives, totaled more than $500 million, according to the book. Earlier reporting in 2019 from Axios had estimated that Neumann had sold about $300 million. The rest of Neumann’s total payout can be compiled from company files, including a May document related to WeWork’s plans to go public soon through a merger with a blank check company.
A WeWork representative and a spokesperson for Neumann declined to comment.
Neumann’s skyrocketing payout shows how the former chief executive officer used the voice control he had over WeWork to advance his own interests at every stage of the company’s life. Neumann’s meteoric rise, rapid fall and golden parachute are described in detail, but the book adds new details about the extent to which he was able to enrich himself as the company grew.
Listen to the podcast: Founding: The WeWork Story
Neumann also made a lot of money from his acrimonious exit from WeWork, with investors paying hefty fees to get him to relinquish control. When he was kicked out of the top job two years ago, he would walk away with $1 billion in potential stock sales and cash payments as part of a severance package, a number that has already sparked outrage. That settlement soon became embroiled in a series of lawsuits between Neumann and SoftBank Group Corp., WeWork’s largest investor.
After the dust and lawsuits, Neumann was still recovering financially. We Holdings LLC was allowed to sell $578 million in stock in February as part of the settlement agreement, according to company files. The files also show that Neumann himself received $198 million in cash payments as part of his departure.
According to the filings, Neumann also still owns tens of millions of shares in WeWork, which will go public later this summer through a merger with BowX Acquisition Corp., a special acquisition company. Its shares are worth over $825 million, based on BowX’s price.
Meanwhile, WeWork tries to leave the frothy, Neumann-led era behind. Its new CEO, Sandeep Mathrani, said the company is on track to be profitable by the end of the year and has taken aggressive cost-cutting measures over the past year and a half to reduce its once-famous spending. WeWork also hopes there will be more demand for its flexible-use offices in a post-pandemic world where office workers have new and evolving preferences for personal work.
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