WeWork’s long term CEO, Adam Neumann is in hot water as its biggest investor as well as some of the company’s board members want him to step down from the top role.
The co-working space company postponed its IPO amid concerns about its business model, valuation, allegations of poor governance, and the revelation of a six million dollar payment to Mr. Neumann, for the use of the word ‘We’.
According to various media reports, at a recent board meeting, some members proposed that he step aside, and into the role of non-executive chairman.
This would be a difficult move owing to Neumann’s ownership of majority voting rights. He may as well decide to fire the entire board in one fell swoop.
WeWork’s lead investor, Mayoshi Son – Founder of SoftBank, has invested close to USD 11 Billion, in the firm, and was set to spend another USD 1 Billion to support the now stalled IPO.
The investors claim to have quote, ”lost faith” in Neumann and wants him to step down from the CEO position.
According to Reuters, Mayoshi Son may be asked to step in as interim CEO of WeWork should Neumann step down.
The investors lobbying for Neumanns demotion have proposed taking legal action against him for ”self-dealing”. Neumann reportedly owns stake in companies that own property that his other company, WeWork has leased.
According to The Wall Street Journal, some investors claimed Neumann took drugs such as marijuana while on official duty. Neumann allegedly engaged in the use of marijuana while on a private flight to Israel, after which the flight crew discovered more of the drug stuffed in a cereal box during the return journey.
Benchmark Capital, one of WeWork’s other major investors, also wants Neumann out. Benchmark Capital notably lobbied shareholders to replace controversial Uber co-founder and then CEO, Travis Kalanick.
Aside from all aforementioned allegations, Neumann is also said to have employed immediate family members.
These misguided moves, as well as a doubts about the firm’s business model forced it to slash its valuation from USD 47 Billion (in January), down to USD 20 billion. The IPO plans have since been placed on hold amid the internal wrangling.
