WeWork CEO to be Paid $1.7 Billion to Go Away

WeWork CEO to be Paid $1.7 Billion to Go Away

WeWork CEO to be Paid $1.7 Billion to Go Away

As part of the deal, SoftBank, which already owns about a third of the company, is to buy almost $1 billion of stock in WeWork's parent from Mr. Neumann, who was forced out as chief executive after pushback from prospective investors scuttled the IPO.

As part of the deal with SoftBank, the company will offer to buy as much as $3 billion from existing shareholders, from the fourth quarter. It was unclear if agreement had been signed, and the high-level talks are fluid.

"The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free cash flow", Claure said in a statement.

Japan-based tech giant Softbank has infused $5 billion in new financing into the struggling co-sharing workspace company WeWork. A spokesperson for Neumann wasn't immediately available for comment.

The deal will value WeWork between 7-point-5 billion and 8 billion U.S. dollars on a pre-funding basis and could be officially announced as soon as Tuesday, U.S. time. With this, Neumann is also set to get a $500 million loan from SoftBank to pay off $500 million in debt financing he received from J.P. Morgan, UBS and Credit Suisse earlier this year; he will also receive a $185 million consulting fee, according to the Journal's reporting.

Neumann resigned from his position as CEO over fears that WeWork investors were attempting to oust him.

WeWork owner The We Company's board was evaluating SoftBank's offer against an alternative financing proposal from JPMorgan Chase & Co, but chose to go with SoftBank, even though the bank put together a $5bn debt financing package.

Marcelo Claure, SoftBank's chief operating officer, would become chairman.

WeWork will narrowly avoid financial ruin and in the process, reward its former leader, Adam Neumann, with as much as $1.2 billion.

It was first reported on Monday that Mr Neumann was negotiating stepping down from the board and would serve as an adviser.

"This is where the math gets confusing because they've put in more money than the valuation of the company", said Larry Perkins, founder and CEO of SierraConstellation Partners, a management advisory firm that specializes in helping companies navigate hard turnarounds.

Under its new co-CEOs, Artie Minson and Sebastian Gunningham, WeWork has been crafting plans to sell or shut down side ventures, including a private elementary school and event-planning website Meetup.com, to focus on its core business of leasing office buildings, renovating them and subletting to short-term tenants.

WeWork abandoned its initial public offering last month, after investors questioned its large losses, the sustainability of its business model and the way it was being run by Mr Neumann, who gave up his chief executive title last month. The plan would more than halve his stake to less than 10% of the shares and voting rights.

Neumann holds special voting shares that enable him to dismiss dissident directors, which sparked concern among investors when the company was preparing for its flotation.

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