Adam Neumann isn't having a good year. It wasn't all that long ago that he was CEO of the company he co-founded, had a multi-billion paper net worth, and was eyeing a lucrative IPO that would make him even wealthier. When WeWork filed for its now canceled IPO, a few things stuck out. One, he planned to have his wife, certified yoga teacher Rebekah Paltrow Neuman succeed him. The board of directors struck that down pretty quickly. Now, it's been revealed that during a speech Neumann gave to employees in January, he said that WeWork isn't "just controlled – we're generationally controlled." He went on to say that his five children "don't have to run the company," but they "do have to stay the moral compass of the company." Let me remind you that Neumann is the man who fires 20% of his staff annually so that he can get more out of those who remain through fear that they will be the next person to be let go.
This speech was caught on video and during it Neumann also talked about his future grandchildren and great grandchildren and great-great-grandchildren saying: "It's important that one day, maybe in 100 years, maybe in 300 years, a great-great-granddaughter of mine will walk into that room and say, 'Hey, you don't know me; I actually control the place. The way you're acting is not how we built it,'" he said.
This is the man that compared WeWork to a rare jewel in an interview with Fast Company. At that time he said: "Do you know how long it takes?" He was implying how long it takes for a diamond to be created. Dude. You were peddling shared office space, not a lifesaving medical procedure. Perspective is important and he doesn't seem to have much.
The reason Neumann thought he could pass WeWork down to his heirs for generations is due to the dual-class shares Neumann had convinced investors to give him. (He isn't the only tech founder to do this.) The shares that Neumann has in WeWork don't just give founders more voting power after their company goes public – they can also be passed down to their kids. Nearly half of the companies that went public with dual-class shares between 2004 and 2018 gave founders "outsized voting rights in perpetuity," according to SEC Commissioner Robert Jackson. Basically, dual-class shares ensure that a public company will forever be controlled by a small group of corporate insiders for generations.
Now, we don't have to worry about that happening in WeWork's case, as the company is nearly valueless, with some experts predicting it will run out of operating cash by Thanksgiving. On the flip side, Neumann's five kids now don't have to feel beholden to Daddy's company and can forge their own lives and careers.