WeWork paid its own CEO $5.9 million to use the name 'We,' but now he's giving it back after the deal was criticized
- WeWork paid its own CEO, Adam Neumann, just shy of $6 million for use of the word "We."
- Neumann owned the trademark through a private company, which then sold the trademark use to WeWork at an absurdly high price.
- In the company's latest SEC filing, WeWork says it has retrieved the money it paid to Neumann for the trademark and has retained use of rights to the "we" branding.
- It did as much, "at Adam's direction," the filing says.
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When WeWork filed to go public this summer, we learned an incredible detail about founder Adam Neumann: He was paid a whopping $5.9 million by the company he runs for use of the word "we."
The logic was laid out as such: Ahead of its IPO filing, WeWork reorganized and rebranded as "The We Company." In order to rebrand itself around the word "We," the company paid its own CEO nearly $6 million for trademark rights.
The transaction was handled through a private company that Neumann is a managing member of, WE Holdings LLC, which owned the trademark rights to the word "we." Moreover, WeWork characterized the nearly $6 million payment as "fair market value."
In his analysis of the company following its IPO filing, New York University professor Scott Galloway characterized the situation as such:
"Adam also owned the rights to the 'We' trademark, which the firm decided they must own and paid the founder/CEO $5.9 million for the rights. The rights to a name nearly identical to the name of the firm where he's the founder/CEO and largest shareholder. YOU. CAN'T. MAKE. THIS. S---. UP."
On Wednesday, in a newly filed SEC document, WeWork walked back that arrangement.
"The issuance to We Holdings LLC of the partnership interests was unwound and the partnership interests were returned to the We Company Partnership," the document says. "The We Company continues to hold all of the assigned rights to the 'we' family trademarks."
Michael Kovac/Getty Images for WeWork
Put more simply: WeWork retrieved the $5.9 million it paid to Adam Neumann and retained the trademark rights to the word "we."
Moreover, the filing says that the return of the $5.9 million and retaining of rights was done "at Adam's direction." Adam continues to serve as CEO of The We Company (the new name of WeWork).