As part of the deal to take full control of the company, SoftBank will reportedly be giving WeWork CEO and co-founder, Adam Neumann, a massive payout.
Initial reports had pegged Neumann's payout to be somewhere around $1.7 billion, but the figure has since been brought down as per newly uncovered information from sources more familiar with the matter.
The deal to take full control of the troubled company will be a massive loss for SoftBank, which has agreed to drop the potential valuation of the company to around $8 billion. This represents a massive drop from the $47 billion market valuation the company got during its peak.
SoftBank would essentially be putting more money into the company than what it is currently worth. The Japanese investment firm is currently the largest investor in WeWork's parent company, The We Company.
Initial reports that had cited sources close to the deal had speculated that Neumann could be walking away with as much as $1.7 billion. However, newer reports have revealed that Neumann has apparently been allowed to sell up to $1 billion worth of the stocks he currently holds.
Under the deal, Neumann has been forced to use half of the proceeds of his stock sale to pay back the company's standing $500 million loans. However, Neumann will be receiving an additional $185 million for his consultation work for SoftBank over the last four years.
The news of Neumann's large payout reportedly caused quite a stir amongst WeWork employees. According to reports citing statements from WeWork employees, some staff members apparently complained about Neumann's payout. Meanwhile, some employees have apparently asked the CEO to split his money with staff.
Prior to agreeing with the SoftBank takeover, WeWork reportedly had considered two last-resort options, which included a loan package that was being offered by JPMorgan Chase. The company apparently wanted to explore other measures to recoup some of the money it had lost in its failed IPO attempt.
WeWork had faced multiple criticisms shortly after it had filed for its IPO in August. The main contention for some critics is how the company had operated. This included complaints of gender equality in its ranks and the unchecked powers of its top executives.
After it had decided to postpone its IPO, the company immediately began to make plans to downsize its business. WeWork reportedly started to offer the companies it had acquired for sale. The company also reportedly began plans for a mass layoff of its employees.
