Michael Kovac/Getty Images for WeWork
- Adam Neumann will leave WeWork’s board for a year if a planned settlement with Softbank happens, Bloomberg reported.
- The deal with SoftBank also includes a $50 million payout to Neumann, WeWork’s cofounder, The WSJ reported.
- This is on top of about $500 million he would get from SoftBank buying shares, as reported by the Journal Monday.
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WeWork cofounder Adam Neumann stepped down as CEO in 2019 following intense public scrutiny – and now he’s reportedly set to leave its board, too, under a proposed settlement deal with WeWork owner SoftBank.
The deal would end a bitter legal battle between Neumann and SoftBank, WeWork’s biggest investor, who swooped in to save the shared-workspace company from bankruptcy when its IPO plans crumbled in 2019.
The deal, which is in advanced discussions but hasn’t been finalized, could see Neumann leave his position as an observer on the company’s board for at least a year, Bloomberg reported.
After a year, Neumann would be able to request to attend meetings as an observer, meaning he wouldn’t get a vote, or he could designate someone else to take his place, the sources told Bloomberg. Both of these would require approval from SoftBank, they said.
The settlement would give Neumann $50 million to cover legal fees, too, alongside a $50 million payout, sources told The Wall Street Journal. SoftBank would also extend a $430 million loan to Neumann by five years, they said.
This is in addition to about $500 million he would get from SoftBank buying shares from early WeWork investors, as reported by the Journal Monday. The figure is about half of what SoftBank originally agreed to purchase from Neumann as part of a $3 billion deal it abandoned in 2020.
In October 2019, SoftBank agreed to purchase $3 billion in stock from investors and employees after WeWork's IPO plans fell through the month before. SoftBank's bailout package included buying $970 million worth of shares from Neumann.
But SoftBank walked away from the deal the next April, and Neumann sued SoftBank. Sources told Bloomberg the case is set to be resolved in a settlement, meaning the planned trial for March 4 is no longer needed.
SoftBank would buy around half of its original $3 billion stock purchase under the proposed settlement, the Journal reported Monday, including about $480 million for a quarter of Neumann's shares in the company. He would remain a major shareholder in WeWork, CNBC reported.
Neumann stepped down as CEO in September 2019, following both the failed IPO and intense public scrutiny of Neumann's leadership style, use of company funds, and WeWork's nonstop party culture.
SoftBank also gave Neumann $1.7 billion to step down from his position as chairman of the board at WeWork.