WeWork's Neumann to step down as CEO, give up control
WeWork co-founder Adam Neumann agreed on Tuesday to resign as chief executive of the U.S. office-sharing company and give up majority voting control, bowing to pressure from some of his investors.
The company announced the decision following a board meeting earlier on Tuesday to discuss a challenge to Neumann's authority by his biggest investors, including Japan's SoftBank Group Corp , venture capital firm Benchmark Capital and Chinese private equity firm Hony Capital, according to people familiar with the deliberations.
The investors amassed a majority on We Company's seven-member board to push for Neumann's resignation as CEO, one of the sources added.
Artie Minson, currently chief financial officer of WeWork parent We Company, and Sebastian Gunningham, a vice chairman for the New York-based start-up, will become co-chief executives, the company said. Neumann will stay on the board as non-executive chairman, the company added.
The leadership changes come after We Company postponed its initial public offering (IPO) last week following push-back from perspective investors, not just over its widening losses, but also over Neumann’s unusually firm grip on the company.
This was a blow for SoftBank, which was hoping for We Company's IPO to bolster its fortunes as it seeks to woo investors for its second $108 billion Vision Fund. It invested in We Company at a $47 billion valuation in January.
We Company said on Tuesday it was now evaluating the "optimal timing" for an IPO.
Neumann also agreed to reduce the power of his voting shares, losing majority voting control, according to the sources. Each of his shares will now have the same voting rights as three We Company common shares, not the 10 common shares previously, the sources said.
Neumann's shares used to have the same voting power as 20 We Company common shares, before he agreed to reduce his grip slightly earlier this month in an unsuccessful attempt to make the IPO more attractive to investors. (Reporting by Joshua Franklin in New York and Anirban Sen in Bengaluru; Additional reporting by Greg Roumeliotis in New York; Editing by Chizu Nomiyama and Dan Grebler)