Adam Neumann has locked up control of the We company in a jaw dropping way even by Silicon Valley standards by giving himself 20 votes per share

Adam Neumann has locked up control of the We company in a jaw dropping way even by Silicon Valley standards by giving himself 20 votes per share

adam neumann wework we company ceo

  • WeWork CEO Adam Neumann, like the CEOs of other high-flying startups that have gone public recently, holds shares in his company that will give him extra votes.
  • But Neumann's stock will give him 20 votes per share - twice as many as votes as the stock held by many of his peers, the company revealed Tuesday in the paperwork it filed for an initial public offering.
  • Thanks to that voting power, Neumann holds majority control over WeWork and is expected to continue to wield that control long after its IPO.
  • Read more WeWork stories here.

Many CEOs at the helm of newly public tech companies have special shares with extra voting power, allowing the executives to maintain control over their companies.

But Adam Neumann, the founder and owner of WeWork, has shares that give him even more votes than those held by his peers. Neumann gets 20 votes per share with his super-powered stock; other CEOs with such stock usually get about 10 votes per share.


The We Company - WeWork's parent corporation - will have three classes of shares, it disclosed Wednesday in the paperwork it filed to go public. Class A shares, which will trade publicly after its IPO, will have one vote per share. Class B and Class C shares, nearly all of which are owned or controlled by Neumann, will have 20 votes each.

Thanks to that power, Neumann holds a majority of the voting power at the We Company and is expected to continue to do so long after its public offering.

"Upon completion of this offering, Adam Neumann will own or control more than 50% of the total voting power of our capital stock and, as such, we will be a controlled company," We Company warned prospective shareholders in its IPO filing. "For so long as we are a controlled company," We continued, "you will not have the same protections afforded to stockholders of [other] companies."


WeWork's share arrangement is related to its complex structure

We Company just created the Class C shares as part of a corporate reorganization over the last two months that put in place an unusual and Byzantine corporate structure, the company revealed in its IPO filing. That corporate structure could limit the taxes Neumann and other insiders pay on We Co.'s future profits, while increasing the potential tax liability of outside shareholders.

Class C shares can be converted into Class B ones, and Class B ones can be converted into Class A shares. Class A shares can't be converted into shares of either one of the other classes of stock.

Having multiple classes of stock with differing voting rights used to be unusual and frowned upon by investors. But it's become increasingly common, particularly among tech startups. Google and Facebook both have such structures, as do companies ranging from Roku to Lyft.


Read this: The era of the all-powerful tech CEO has only just begun, even though Facebook and Snap show why that's a bad thing

Investors have questioned multi-class stock arrangements

Still, even among these companies, few have afforded insiders as much control as WeWork will give Neumann. Among the only executives whose power compares is Snap CEO Evan Spiegel. Although his stock only gives him 10 votes per share, the stock held by everyday investors doesn't get any votes at all, leaving them unable to have any say in corporate matters or oversight.

Companies with dual- or multi-class stock structures have argued that by giving their founders and other insiders disproportionate power, those leaders can focus on long-term strategy rather than short-term stock price fluctuations and quarterly earnings reports. But investors and other critics have countered that such arrangements can allow insiders to act in their own self interests rather than on behalf of the all shareholders and can shield them from accountability for their mistakes. Some institutional investors have been pressuring companies to drop such provisions.


Even before taking his company public, Neumann has already made several eyebrow-raising moves, including purchasing interests in buildings that he turned around and leased to WeWork and raising $700 million by selling or borrowing against his shares in the company.

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