WeWork Cuts CEO Powers Ahead Of Wall Street Debut

A WeWork office is seen in New York City on July 19, 2019. -- AFP photo

WeWork announced plans last Friday to reduce the power of the co-founder and chief executive of the office-sharing giant as it readies its Wall Street share offering.

A securities filing by its parent The We Company said CEO Adam Neumann would also give the company any profits he reaps on private transactions made with the startup.

A series of governance changes were also outlined in the document to address concerns about Neumann’s control and private transactions with WeWork, which touts itself as revolutionising the market for office space.

WeWork, which has already reduced by more than half its anticipated market valuation and which has faced pressure to delay its initial public offering, intends to go forward with the listing the week of September 23, according to a source familiar with the transaction.

In last Friday’s filing with the Securities & Exchange Commission, the company said the voting power in Neumann’s “super” shares would be cut from 20 votes per share to 10 votes.

The We Company will also appoint a lead independent director by the end of the year and maintain a board with a majority of independent directors, and without any members of Neumann’s family.

The document also said the company had “unwound” partnership interests to Neumann that he received for transferring trademarks to the We Company.

Neumann’s control and private deals with WeWork had sparked criticism from analysts and investors ahead of the market debut of one of the largest multibillion-dollar startups.

WeWork’s recent funding rounds, which have attracted investments notably from Japan’s SoftBank, have valued the company at some USD47 billion but sources have indicated the IPO value will be in the area of USD20 billion or less. — AFP

 

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