- SoftBank will reportedly give former WeWorkCEO Adam Neumann $US1.7 billion as part of a bailout plan for the office rental startup, according to The Wall Street Journal.
- The report of Neumann’s windfall drew a strong reaction from current and former WeWork employees as well as industry experts.
- Aaron Levie, the CEO of Box, poked fun at the absurdity of Neumann’s golden parachute, with a sharp tweet referencing a missing chapter in startup business books.
- Visit Business Insider’s homepage for more stories.
Getting kicked out of the company you created is every startup founder’s worst nightmare.
But the fate of WeWork CEO Adam Neumann, who is being paid a king’s ransom to effectively go away, struck at least one well-known tech CEO as a fascinating outcome.
“I’ve read almost every book on startups, and somehow have just completely missed the chapters that covered this part of the strategy,” Aaron Levie, the CEO of online storage company Box, wrote in a tweet on Tuesday. Levie’s quip was attached to a CNBC news article detailing a $US1.7 billion payout that Neumann will reportedly receive.
Neumann’s staggering payout is part of a deal organised by Japan’s SoftBank to take over the struggling office-sharing company, which abandoned its IPO plans in September.
The deal, reported on Tuesday by The Wall Street Journal’s Maureen Farrell and Eliot Brown, stipulates that Neumann will step down from the company’s board. In exchange, SoftBank will buy nearly $US1 billion of his WeWork stock, pay him a $US185 million “consulting fee” and offer him a $US500 million credit line.
The payout rattled current and former WeWork employees, who told Business Insider’s Meghan Morris that they were frustrated with the deal. Industry experts, such as corporate law professors, analysts, and tech executives, were also astounded by the move.
I’ve read almost every book on startups, and somehow have just completely missed the chapters that covered this part of the strategy. https://t.co/H41lGA1kLz
— Aaron Levie (@levie) October 22, 2019
Neumann resigned as WeWork’s CEO in September, after reports of his management and financial practices soured investors on the company and scuttled its IPO. Neumann remained on WeWork’s board at the time – a position he will lose with the latest SoftBank deal.
Levie, whose Twitter bio describes him as Box’s CEO and “Lead Magician,” took Box public back in 2015, after a bumpy road that caused the company to delay its offering. The company’s stock surged 66% on its first day of trading, but has since fallen and currently trades just a smidgen above its $US14 IPO price.
The Box CEO recently spoke to TechCrunch about the process of going public, saying that there’s often too much attention focused on the IPO and not the business model.
“I think we have too much of a fixation on the IPO moment versus just building durable business models and how do they end up translating into valuations,” Levie recently said at TechCrunch Disrupt San Francisco.
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