WeWork Says Its Deal with Adam Neumann Is No Longer in Place
WeWork Will Not Pay Neumann a $185 Million Fee
WeWork and its backer, SoftBank Group (SFTBY), have decided not to pay Adam Neumann a $185 million fee that was originally part of his exit package. Neumann was WeWork’s co-founder and former CEO.
Mr. Neumann left WeWork after the startup’s planned IPO did not come to fruition. The IPO was supposed to take place in August of 2019, but after it did not come together, SoftBank stepped in and took over WeWork in October of 2019. SoftBank then offered Neumann a deal to step down.
Neumann’s Exit Package
SoftBank said it would purchase $1 billion in stock from Neumann, would refinance a $500 million debt, and would pay him a $185 million consulting fee, but Marcelo Claure, WeWork Executive Chairman, said the agreement is no longer in place.
When Mr. Neumann left the company, he also agreed not to compete with WeWork for four years, but he is no longer subject to this part of the deal.
WeWork Looks Ahead
In addition to dealing with challenges from its past, WeWork is also trying to make a plan for how to deal with the COVID-19 pandemic, which has caused many office workers to work remotely for months.
Despite pandemic-related hardships, WeWork hopes to achieve profitability in 2021. The company’s leadership said that before the pandemic, WeWork’s occupancy was between 80% and 85%, and that in order to achieve profitability, the company will need 67% to 68% occupancy.
P.S. SoftBank is also an investor in SoFi.
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