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- Adam Neumann’s $1.7 billion golden parachute could be slashed as SoftBank bosses seek to trim the $9.5 billion rescue deal they struck with WeWork last month, according to Bloomberg.
- Some SoftBank executives have said Neumann’s leaving package — which reportedly includes $970 million from stock sales to SoftBank, a $500 million credit line, and $185 million in consultancy fees over four years — is too generous.
- WeWork laid off 2,400 people or about 20% of its global workforce this week, and a former WeWork employee is also suing over Neumann’s departure deal.
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Adam Neumann’s $1.7 billion golden parachute could be slashed as SoftBank bosses seek to trim the $9.5 billion rescue deal they struck with WeWork last month, according to Bloomberg.
WeWork’s cofounder and former CEO was set to sell up to $970 million worth of company stock to the Japanese conglomerate as part of a $3 billion tender offer, receive a $500 million credit line to cover his personal debts, and rake in $185 million in consultancy fees over four years.
However, some SoftBank executives have said his leaving package is too generous, Bloomberg reported, citing people familiar with the talks.
SoftBank’s tender offer was scheduled to begin more than two weeks ago on November 6, The Real Deal reported. The company is speaking to banks about a 300 billion yen ($2.8 billion) joint-financing deal to fund the stock purchases, as a well as a credit line. However, MUFG Bank and Sumitomo Mitsui Banking — two of its biggest financiers — are calling on SoftBank to cut costs and flog assets to turn WeWork around rather than borrow more, Nikkei Asian Review reported this week.
Optics could be another factor. WeWork laid off 2,400 people or about 20% of its global workforce this week. A former WeWork employee is also suing over Neumann’s departure deal, arguing the consultancy payments are “beyond comprehension” given the coworking group’s IPO collapsed and its valuation plunged on his watch.
SoftBank hasn’t made a decision and could proceed with the original tender offer, Bloomberg reported. WeWork could take legal action if it tries to change the terms of their deal, one source told the news outlet.
The $9.5 billion rescue deal comprises the $3 billion tender offer, the acceleration of a $1.5 billion warrant — which SoftBank CEO Masayoshi Son spoke to lawyers about reneging on but they said he couldn’t, Bloomberg reported — and $5 billion in fresh funding.
