WeWork co-founder Adam Neumann has agreed to several governance changes ahead of its parent company’s listing on Nasdaq, in response to investor feedback that threatened to derail it.
Neumann, who had already agreed to a one-year lock-up agreement with the underwriters of the IPO, has also now agreed “to limit his ability to sell his shareholdings in the second and third years to more than 10%,” according to a filing with the US Securities and Exchange Commission.
He has also committed himself to giving WeWork’s parent company, The We Company, “any profits he receives from the real estate transactions he has entered into with the company”.
Neumann had previously agreed to give up all his power to make any investment and management decisions affecting the properties he had already transferred to ARK, a new global acquisition and management platform launched in May in partnership with Caisse de dépôt et placement du Québec real estate subsidiary Ivanhoé Cambridge, for management.
He has also promised to “not enter into future real estate transactions with the company”.
The We Company’s board of directors and Neumann have also agreed to appoint a new lead director by the end of the year.
In addition, they will decrease the number of votes per share for the board and Neumann from 20 to 10.
This voting power held by the board will also decrease further to one vote per share “in the event that Adam becomes permanently incapacitated or dies,” the filing reported.
The move follows the reported return last week of $5.9m by a holding company co-managed by Neumann to The We Company for use of the “We” brand he created.
A date, as yet, has still not been set for WeWork’s listing after it launched its IPO in August.
In a prospectus filed on 14 August, the company said revenues during the first half of this year stood at $1.5bn (£1.24bn), up from $763.7m during the same period of 2018. The pre-tax loss over those six months stood at just shy of $900m.
Today, the company operates in 111 cities across 29 countries, according to the IPO prospectus, with some 527,000 members. More than half of its customers are based outside of the US, the company said.
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