WeWork founder and former CEO Adam Neumann drove his coworking company’s valuation to a whopping $47 billion by selling investors on his personality and the idea that he was revolutionizing real estate through tech. He also steered the company — through a series of poor and avoidable decisions — into near oblivion. Now the company’s biggest investor, SoftBank, is paying him $1.7 billion to leave the company and most of his stock behind.
That means, as Recode’s Pivot podcast co-host Scott Galloway pointed out, Neumann is getting about $850,000 for each of the 2,000 employees WeWork is expected to lay off — it just hasn’t done so yet because it couldn’t afford the severance.
Screwing up never felt so good.
“I’ve never seen such a massive consulting fee for someone who is walking away,” Evan Epstein, founder of the corporate governance firm Pacifica Global, told Recode, referring to tech startups. “It’s extraordinary that he walks away with billions of dollars in a situation where maybe the company is imploding and it’s losing value at the rate it is.”
About a billion dollars of that payout goes toward buying out Neumann’s stock, which like other WeWork employees, he’s free to sell (though it’s unclear how much the stock is really worth). Also questionable: SoftBank issuing him a $500 million credit line to help him repay loans he has due to JPMorgan Chase. On top of all that, SoftBank is paying him a $185 million consulting fee. That of course raises the question: Why pay someone to consult who has grossly mismanaged a company in the first place?