- Ousted WeWork co-founder Adam Neumann’s $185 million consulting deal with his former company is no longer in place, executive chairman Marcelo Claure said during a Wall Street Journal event Monday.
- Claure told the audience that Neumann “may have violated some of the parts of the consulting agreement, so that’s no longer in effect,” according to The Journal.
- Claure, also a top executive and board member at SoftBank, didn’t say which terms Neumann allegedly “may have violated” but added that he had initially been “incredibly helpful” to SoftBank as it took over the reins following Neumann’s failed IPO attempt last year.
- Neumann stepped down as CEO in September 2019 amid a string of controversies surrounding his leadership of the company, and has since sued the Japanese bank for backing out of buying nearly $1 billion of his WeWork shares.
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When WeWork co-founder Adam Neumann stepped down as CEO last September amid a string of controversies, he landed a massive exit package from WeWork investor SoftBank, which took over the embattled company, that included a $185 million consulting deal.
But Neumann may have invalidated that contract after he “may have violated” its terms, WeWork executive chairman Marcelo Claure suggested Monday during a virtual event hosted by The Wall Street Journal.
“I don’t think that consulting agreement is still in force,” Claure said, according to The Wall Street Journal, adding: “I think Adam may have violated some of the parts of the consulting agreement, so that’s no longer in effect.”
Claure, who is also the COO, executive vice president, and a board director at SoftBank, didn’t say which terms Neumann allegedly breached because it relates to an ongoing lawsuit over Neumann’s exit package, but added that the former WeWork CEO and chairman had been “incredibly helpful” when SoftBank stepped in to rescue WeWork, The Wall Street Journal reported.
WeWork, SoftBank, and a spokesperson for Neumann did not respond to requests for comment on this story.
Neumann’s exit package also included the option to sell up to $970 million of WeWork stock to SoftBank as well as a $500 million credit line, but Neumann sued the Japanese bank in May for backing out of the stock purchase agreement, claiming that SoftBank and Claure amended the deal without his permission in late December.
SoftBank took the reins of WeWork in October 2019 following Neumann’s failed attempt to take the company public in a deal that involved Neumann’s resignation, a fresh $5 billion investment, buying back up to $3 billion of stock, and acquiring around 80% of the real estate startup.
WeWork, only months before privately valued at $47 billion, had seen its valuation plummet more than 80% amid multiple controversies surrounding its finances, governance, and a toxic culture fueled by Neumann’s leadership style.