Adam Neumann’s WeWork Exit Package Expands With $245 Million in Potential Stock
(Bloomberg) -- Adam Neumann is set to emerge from his separation with WeWork, the company he led from its beginning until his ouster in 2019, with an extra bonus of stock riches if the company’s new plan to go public is successful.
The award will give Neumann shares worth more than $245 million at the current price if public investors embrace the stock. The terms, disclosed in a securities filing this month, were part of a settlement agreement with SoftBank Group Corp., WeWork’s biggest backer, reached in February over a stock transaction that fell through in 2020.
The shares come on top of an already generous exit package for Neumann, who agreed to give up his role on the WeWork board for a year in exchange for the ability to sell roughly $480 million in stock to SoftBank, in addition to getting $50 million in cash, another $50 million to cover legal fees and a five-year extension on a pre-existing $430 million loan from the Japanese conglomerate. The settlement helped both parties avoid a trial in Delaware and finalized what had been an acrimonious separation between WeWork’s former leader and his biggest, once-loyal investor.
The extra stock, first reported Thursday by the Wall Street Journal, requires certain criteria to be met. WeWork plans to go public by merging with a special purpose acquisition company called BowX Acquisition Corp. The share price, which traded at as much as $12.45 on Thursday, must be above $10 after restrictions on Neumann’s stock sales expire, according to the filing. His lockup period lasts nine months after the closing of the deal, said a person familiar with the matter who wasn’t authorized to discuss the details publicly. The SPAC merger is planned for the third quarter.
Before the settlement agreement, Neumann was already set to receive the shares but negotiated for them to be fully vested with a base price of $0, the filing said.
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