More trouble is surfacing for WeWork and CEO Adam Neumann after reports show board members are considering stripping the CEO of his title and power.
The WeWork board has planned a meeting as early as today to discuss the future of Neumann. But of course the CEO has so much voting power that nothing may come of it — or worse, Neumann could oust the entire board for plotting against him.
SoftBank CEO Masayoshi Son, who has championed Neumann in the past and invested $11 billion in WeWork, is leading the push because Neumann is too crazy, according to people in Son’s circle reported by CNBC. In the past, Son had admired Neumann’s approach and even told him to be crazier.
“Masa turns to me and asks, ‘In a fight, who wins — the smart guy or the crazy guy?’” Neumann said in an 2017 interview with Forbes. “I say, ‘Crazy guy,’ and he looks at me and says, ‘You are correct, but you and (co-founder) Miguel (McKelvey) are not crazy enough.’”
But Neumann may have followed Son’s advice a little to closely for the big-money investor. Apparently, the WeWork CEO has repeatedly ignored advice from Son including going ahead with IPO plans that have since been delayed, and a call to eliminate hippy-dippy language like “elevate the world’s consciousness” in the company’s S-1 filing.
And it doesn’t stop there. A recent Wall Street Journal report found Neumann may have smoked marijuana in a private jet while travelling internationally from New York to Israel on a business trip. The owner of the jet recalled the plane back to the U.S. after flight crews found a stash hidden in a cereal box for the return trip.
Of course, WeWork is spinning Son’s discontent as a practical move to delay the IPO of a company SoftBank has so heavily invested in, according to parties familiar with the situation. If the company went public, SoftBank would have to write down its investment, which could lead to major losses if the company was valued under $20 billion after initial private valuations of $47 billion in January.
“WeWork should postpone its IPO indefinitely until it can restructure its governance,” said Bill George, a former board member at Goldman Sachs, and many other large companies. “Adam Neumann should give up some control to return WeWork to a more normal governance structure, and likely this will mean a CEO change. He should listen to Masa Son, who is one of his major financiers and very sharp — and very powerful.”