Adam Neumann's golden parachute could balloon to over $2 billion if WeWork goes public

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  • Adam Neumann’s $US1.7 billion golden parachute could balloon to over $US2 billion if WeWork goes public.
  • The WeWork cofounder holds about 24 million “profit interests” in the coworking startup that could be worth upwards of $US350 million following a successful float, the Financial Times reported, citing documents and sources.
  • The potential windfall would be on top of SoftBank’s exit package for Neumann, which includes a $US500 million credit line, a $US185 million consultancy gig, and the chance to sell $US970 million worth of shares.
  • View Business Insider’s homepage for more stories.

Adam Neumann’s $US1.7 billion golden parachute could balloon to over $US2 billion if WeWork goes public, as he owns millions of special shares in the business.

The WeWork cofounder holds about 24 million “profit interests” in the coworking startup, the Financial Times reported, citing documents and sources. If WeWork succeeds in going public, those would convert into stock at a value equal to the price of its publicly traded shares minus a set “catch-up price.”

Neumann previously owned about 42.5 million profit interests with a catch-up price of $US38.36 a share. He forfeited some of them but negotiated a lower catch-up price for the remainder as part of a deal with SoftBank in October, the Financial Times reported. He now has about 8.5 million vested profit interests with a catch-up price of $US19.19 a share, and a further 15.6 million with a catch-up price of $US21.05, the newspaper added.

If WeWork goes public and its shares hit $US25 – they were valued at $US19.19 by SoftBank in October – Neumann’s profit interests could convert into stock worth about $US110 million. If WeWork’s share price rose to $US35, they could be worth just over $US350 million.

The potential windfall would be on top of SoftBank’s exit package for Neumann, which included a $US500 million credit line to help him cover his personal debts, a consultancy gig worth $US185 million over four years, and a tender offer allowing him to sell up to $US970 million worth of WeWork shares.

SoftBank struck the deal with Neumann as part of its $US9.5 billion bailout of WeWork after its IPO collapsed in September. The startup scrapped its plans to go public after investors railed against its sky-high valuation, hefty losses, questionable business model, lack of governance, and Neumann’s controversial behaviour.

WeWork, SoftBank, and Neumann declined to comment to the FT. Neither were immediately available for comment when contacted by Business Insider.

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