By Feuer
WeWork’s ousted CEO Adam Neumann might finally find the door with a renegotiated exit package.
Neumann received a juiced-up stock award worth $245 million, on top of $200 million in cash, as part of a sweetheart exit package from the office rental company he led to disaster, regulatory filings show.
The fresh payout is part of a renegotiation of his massive 2019 exit package that sparked a long-running battle between Neumann and WeWork’s main investor SoftBank.
The new deal is meant to end the dispute and clear the way for the company’s public debut, the Wall Street Journal reported.
The payout was disclosed in regulatory filings related to WeWork’s plans to finally go public through a SPAC merger with BowX Acquisition Corp.
The filings show WeWork, now led by real estate legend Sandeep Mathrani as CEO, gave Neumann an enhanced stock award worth $245 million in February. He also received $200 million in cash and was able to refinance $430 million in debt on favorable terms.
In addition, the deal allowed a company controlled by Neumann to sell almost $580 million in WeWork stock.
Neumann has been negotiating his exit from the company he founded since 2019, when the company botched its effort to go public through an IPO.
Shortly after the company published regulatory filings for its IPO that revealed staggering losses and questionable management decisions, WeWork’s valuation cratered and Neumann was forced out as CEO.
Neumann, however, remained in a strong bargaining position as he still held the position of chairman and his shares of the company commanded more voting power than those owned by others. That led to an ugly divorce between Neumann and WeWork’s primary investor, Softbank.
Within weeks of the botched IPO, WeWork was running low on cash and Softbank prepared a rescue package.
In order to get rid of Neumann amicably, the Japanese conglomerate agreed to give Neumann a $185 million consulting fee, to allow an entity he controls to sell $970 million of stock and to refinance $500 million in debt tied to his remaining shares.
But Softbank later reneged on the deal as the COVID-19 pandemic struck, saying certain conditions weren’t met. Neumann, in turn, sued Softbank.
The latest payout is expected to end the dispute, the Journal reported.
Along with the renegotiated exit package, WeWork also confirmed in the filings news reports that Neumann had helped his former company secure its deal to go public by meeting with the BowX team.
