A Former WeWork Employee Makes a Shocking Claim Against Adam Neumann in New Lawsuit
The world came crashing down in August for disgraced and dismissed WeWork CEO Adam Neumann after the company’s plans to go public failed spectacularly, leading to investors backing out and even pushing the company to the brink of bankruptcy. How could one man’s mistakes cost a business so much?
It showed that there was a bigger problem within the corporation, especially linked to his leadership style and the family’s self-dealing moves that were often made in secrecy without consulting other executives in the company — all of which raised the investors’ eyebrows.
Things quickly went downhill from there, and it’s quite unbelievable how he went from being a promising entrepreneur to an ousted executive… almost overnight
From High to Low
WeWork’s fate hadn’t always looked this gloomy. In its hay days, Adam had managed to steer his founded company to a valuation of $47 billion. However, the recent chain of events proved that what goes up, must come down.
Shareholder value slowly diminished as news broke of WeWork’s weak IPO strategy. In the end, the fate of the company came down to the hasty decisions Newman made and the man was unseated as the chief executive officer of the company.
However, things didn’t seem to get better for the business that he left nor the people who stayed. The plan of going public appears to have taken a back seat now in the midst of all the mess. But, Adam did not walk away emptyhanded: he received a golden parachute of $1.7 billion.
Yes, you read that right. Despite the chaos he had created for his company, the 40-year-old businessman got a sizable bail from SoftBank, one of the biggest investors of WeWork.
The Japanese company knew that Adam was going to be a walking risk from then on, so they offered him an amount that’s impossible to resist just to exit the board.
From any angle, the disgraced official is the winner – he sank WeWork but still managed to walk away as a billionaire. While he may be happy about his exit, the employees certainly are not.
One of the skeptics is Natalie Sojka, a former WeWork staff member, who accused Adam and other shareholders of breaking their fiduciary responsibility, abusing their power, and gaining advantage at other stakeholders’ expense.
The case also has Masayoshi Son, CEO of SoftBank, as a defendant. The lawsuit pointed out that although the investing company knew that the man destroyed the reputation of the business, he was still granted $185 million for consultation pay — $1 billion will come from his stocks plus a $500-million credit.
Natalie, a former executive assistant at WeWork for 17 months, slammed the decision and touted the pay as an improper personal sum given to Adam.
The lawsuit also referred to his exit pay as unfair not just to the lower-ranking employees but to other shareholders as well.
SoftBank’s promise aside, WeWork reportedly is struggling to pay its employees, many of whome will be laid off. This greatly reflects the pay disparity between top officials of the companies versus the people at the helm.
One of its companies, Meetup, has already started firing staffers, who are disappointed with the severance pay they received. According to rumors, the app fired 50 employees, which equate to 25 percent of its workforce.
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