- Adam Neumann’s $US1.7 billion golden parachute could be slashed as SoftBank bosses seek to trim the $US9.5 billion rescue deal they struck with WeWork last month, according to Bloomberg.
- Some SoftBank executives have said Neumann’s exit package – which reportedly consists of $US970 million from stock sales to SoftBank, a $US500 million credit line, and $US185 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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The WeWork cofounder and former CEO was set to sell up to $US970 million worth of company stock to the Japanese conglomerate as part of a $US3 billion tender offer, receive a $US500 million credit line to cover his personal debts, and rake in $US185 million in consultancy fees over four years.
Some SoftBank executives, however, have said his exit 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 with banks about a 300 billion yen, or $US2.8 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 initial public offering collapsed and the company’s 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 the deal, one source told the news outlet.
The $US9.5 billion rescue deal consists of the $US3 billion tender offer, the acceleration of a $US1.5 billion warrant – which SoftBank CEO Masayoshi Son spoke with lawyers about reneging on but was told he couldn’t, Bloomberg reported – and $US5 billion in fresh funding.