In its document, WeWork portrayed Neumann in glowing terms and central to its success.
One indication of the importance the company places on Neumann was just the sheer number of times it mentioned his name in the filing — 169 times. By contrast, Uber’s IPO filing mentioned “Dara” — the first name of its CEO — just 29 times, Galloway noted in a blog post.
But there was more. In one of the risk factors, the company warned that it didn’t have an employment agreement with Neumann, but said that “our future success depends in large part on [his] continued service,” calling him “critical to our operations.”
In the section where it described the various transactions Neumann and his family members have engaged in with the company, WeWork explained that they were a function of “his deep involvement in all aspects of the growth of our company” and prefaced its descriptions of them by talking about how crucial he is to WeWork.
“From the day he co-founded WeWork, Adam has set the Company’s vision, strategic direction and execution priorities,” WeWork said in the filing. “Adam is a unique leader who has proven he can simultaneously wear the hats of visionary, operator and innovator, while thriving as a community and culture creator.”
The document acknowledged that Neumann had sold shares of WeWork in the past, but said he hadn’t sold any since 2017, wouldn’t sell any in the IPO, and had committed to not transfer any of his shares or options for a year after the offering.
In terms of his real estate purchases, the company said he did them with its interests at heart.
“In the early days of our business, at a time when landlords were reluctant to recognize the benefits of WeWork as a tenant, Adam bought four buildings in order to help prove WeWork as a viable tenant to landlords,” the company said in the filing. “In December 2017, Adam expanded his participation in purchasing real estate by buying a majority interest in downtown San Jose development projects, a first step in pursuing the Company’s vision for the future of cities.”
Neumann has since agreed not to purchase any additional properties with the intent to lease them to WeWork, the company said. Wanting to address any conflicts of interest with the past transactions, he and the company set up a real estate fund primarily owned by WeWork that will manage his interests in 10 properties, including four leased by the company. The fund has an option to buy the properties for a year.
On the governance front, the company said it adopted its new corporate structure to allow it to more easily expand into new areas, acquire new businesses, or enter into partnerships. It also said the structure would help insulate each one of those business lines from each other so the failing of any one of them wouldn’t necessarily bring down the whole company.
While acknowledging that Neumann would retain majority control of WeWork after the offering, the company said that was good, because it is “a founder led company.” It also said that Neumann had committed to giving up majority control if the number of shares he owns dips below 5% of the outstanding number.
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