SIGforum.com    Main Page  Hop To Forum Categories  The Lounge    Company lays off 4,000 workers, CEO walks away with $1.7b parachute
Page 1 2 

Moderators: Chris Orndorff, LDD
Go
New
Find
Notify
Tools
Reply
  
Company lays off 4,000 workers, CEO walks away with $1.7b parachute Login/Join 
Member
posted
...yeah. Roll Eyes

Here’s what WeWork is giving laid-off employees who aren’t named Adam Neumann
quote:
WeWork recently laid off its first round of employees after the coworking company’s recent implosion — and some former staffers are unhappy with the severance packages they’re being offered.

Recode obtained a severance package that was extended to a recently laid-off employee of Meetup, an app for in-person social events that WeWork acquired. On Monday, Meetup laid off 25 percent of its workforce, or about 50 employees, according to a source. Today, another WeWork-owned company, the coding bootcamp Flatiron School, also laid off dozens of employees.

Meetup is one of several companies WeWork acquired in the past few years that is reportedly up for sale.

The severance offer Recode reviewed (which may not apply to all terminated employees) provides three months of “garden leave” — in which an employee remains on the payroll with benefits but stops working — as well as one month of severance pay.

While four months of pay might sound pretty generous, it’s in stark contrast to the $1.7 billion golden parachute investors handed to WeWork founder and former CEO Adam Neumann. The contract also asks laid-off workers to sign away their right to sue the company over workplace issues and agree to a non-compete clause. That would mean the employee cannot work for a company that competes with WeWork’s wide array of business lines under a preexisting employment contract that sources say could last for between six and 12 months.

As anxious WeWork employees await larger cuts of up to 4,000 jobs in total, this first round of layoffs is raising questions among an already upset staff about whether WeWork rank and file should be getting a better deal, particularly when Neumann walked away with an unprecedented sum for a CEO who brought his company from record heights to near financial ruin.

“WeWork is happy to cash out Adam’s equity and give him a big check, but employees like me that need that cash aren’t getting any value for our equity,” said one former Meetup employee who spoke on the condition of anonymity.

After numerous reports of financial mismanagement and erratic behavior, Neumann stepped down as CEO and later gave up his board seat at WeWork in exchange for a package payout from the company’s largest investor, SoftBank. That included a sale of $1 billion worth of Neumann’s shares, a $500 million loan, and nearly $200 million in “consulting fees.”

...
 
Posts: 9420 | Location: Wine Country | Registered: September 20, 2000Reply With QuoteReport This Post
Tinker Sailor Soldier Pie
Picture of Balzé Halzé
posted Hide Post
quote:
...$1.7 billion golden parachute investors handed to WeWork founder and former CEO Adam Neumann.


Ok, that made me raise my eyebrows a bit. Wow.


~Alan

Acta Non Verba
NRA Life Member (Patron)
God, Family, Guns, Country

"My guns are always loaded."
~R.G. Justified

What whiskey will not cure, there is no cure.
 
Posts: 22855 | Location: Ski Town, Utah | Registered: October 29, 2012Reply With QuoteReport This Post
Funny Man
Picture of TXJIM
posted Hide Post
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.
Saying he was the CEO is misleading at best, probably meant to cause the outrage that generates clicks.....


______________________________
“I'd like to know why well-educated idiots keep apologizing for lazy and complaining people who think the world owes them a living.”
― John Wayne
 
Posts: 6276 | Location: Austin, TX | Registered: June 29, 2010Reply With QuoteReport This Post
An investment in knowledge
pays the best interest
posted Hide Post
quote:
Originally posted by TXJIM:
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.
Saying he was the CEO is misleading at best, probably meant to cause the outrage that generates clicks.....

Correct. Not sure what the consulting fees are about, but half a billion was either a legit corporate loan or he'll forgo some debt to equity conversion that was in his contract... so not really $1.7 billion at all. If one is pissed reading the article, be pissed at the dumbass journalist and the horrible investors / underwriters backing this dogshit.
 
Posts: 1920 | Location: Mid-Atlantic | Registered: December 27, 2002Reply With QuoteReport This Post
Member
posted Hide Post
quote:
Originally posted by TXJIM:
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.

Do companies payout stock sales all in one lump sum this large...I would've expected this to be stretched out over several years. I guess they wanted him gone and done with.

As an aside, Neumann's wife is cousin to Gweneth Paltrow and is a loon
 
Posts: 9420 | Location: Wine Country | Registered: September 20, 2000Reply With QuoteReport This Post
Member
posted Hide Post
quote:
Originally posted by TXJIM:
He was the founder, stock holder #1. Most of the "parachute" was his equity being cashed out.
Saying he was the CEO is misleading at best, probably meant to cause the outrage that generates clicks.....


This.


————————————-
Those who can, do. Those who can’t, manage.
 
Posts: 1438 | Location: Northeast Georgia | Registered: November 18, 2017Reply With QuoteReport This Post
Moderator
Picture of arcwelder76
posted Hide Post
Capitalism sucks.

Find me a better system..


Arc.
______________________________

"Like a bitter weed, I'm a bad seed"- Johnny Cash

"I'm a loner, Dottie. A rebel." - Pee Wee Herman

Rode hard, put away wet. RIP JHM

"You're a junkyard dog." - Lupe Flores. RIP

 
Posts: 26234 | Location: Love that dirty water, oh | Registered: June 09, 2004Reply With QuoteReport This Post
Prepared for the Worst, Providing the Best
Picture of 92fstech
posted Hide Post
quote:
The contract also asks laid-off workers to sign away their right to sue the company over workplace issues and agree to a non-compete clause. That would mean the employee cannot work for a company that competes with WeWork’s wide array of business lines under a preexisting employment contract that sources say could last for between six and 12 months.


This is the part I don't get right here. Why the non-compete? The Company is terminating their employment, then telling them they can't work anywhere else in their realm of experience for 12 months...in exchange for four months severance. What are they supposed to do for the next 8 months?

I get making somebody sign a non-compete at the beginning of employment...but to do it as part of a layoff as a condition of severance, well beyond the duration of the severance package, seems like a dick move.
 
Posts: 3222 | Location: In the Cornfields | Registered: May 25, 2006Reply With QuoteReport This Post
186,000 miles per second.
It's the law.




posted Hide Post
Softbank had to pay off Neumann's 500M loan he had against his stock, in addition to cashing out his 1B in equity. Softbank lost 5B on the bailout. This is the kind of crap you see near the end of a run, just like in 1999/2000 when all the junk internet stocks blew up.
 
Posts: 2382 | Registered: August 19, 2001Reply With QuoteReport This Post
Nosce te ipsum
Picture of Woodman
posted Hide Post
Nothing surprises me anymore. The 4 months pay for 6-12 months non-compete is extortion, though. The genius is actually finding clients who will pay for these "services". Maybe I can break into this market for imagined value ... Hey, I have a secret formula for dehydrated water ...
 
Posts: 7200 | Location: Mid-Atlantic Region | Registered: March 24, 2004Reply With QuoteReport This Post
I Am The Walrus
posted Hide Post
quote:
Originally posted by 92fstech:
quote:
The contract also asks laid-off workers to sign away their right to sue the company over workplace issues and agree to a non-compete clause. That would mean the employee cannot work for a company that competes with WeWork’s wide array of business lines under a preexisting employment contract that sources say could last for between six and 12 months.


This is the part I don't get right here. Why the non-compete? The Company is terminating their employment, then telling them they can't work anywhere else in their realm of experience for 12 months...in exchange for four months severance. What are they supposed to do for the next 8 months?

I get making somebody sign a non-compete at the beginning of employment...but to do it as part of a layoff as a condition of severance, well beyond the duration of the severance package, seems like a dick move.


Same here regarding that no compete. Depending on the state, I believe it might not even be enforceable but it even being there is a dick move.

But it's probably there because they have a lot of dirty shit they don't want to get out. Seems the shittiest companies use a no compete clause.


_____________

Edmond
 
Posts: 10280 | Location: Central Florida | Registered: March 12, 2005Reply With QuoteReport This Post
Don't Panic
Picture of joel9507
posted Hide Post
That company was set up and run for the private benefit of the founder. As one small example, the founder personally trademarked the company name and then selling the trademark to the company for $5.9M!

That's the kind of stuff that should have sent knowledgeable private investors turning them down flat. They should have gone under long before they hit the wall with the pre-IPO public disclosures.
 
Posts: 12661 | Location: North Carolina | Registered: October 15, 2007Reply With QuoteReport This Post
eh-TEE-oh-clez
Picture of Aeteocles
posted Hide Post
Non competes are generally narrowly tailored to be enforceable in the places where they are allowed. Without knowing the details of the non competes, you can't really make a judgement on whether it's a over reach.

That said, non-competes are made to protect the company from you taking your skillset to a competitor. Just because you are laid off doesn't make you less of a threat, or make the competitors go away.
 
Posts: 10896 | Location: Orange County, California | Registered: May 19, 2002Reply With QuoteReport This Post
Member
posted Hide Post
quote:
That's the kind of stuff that should have sent knowledgeable private investors turning them down flat. They should have gone under long before they hit the wall with the pre-IPO public disclosures.



Absolutely!!! This scam with all of the self-dealing and insider real estate deals should have been very obvious to any knowledgeable investor.----- However, the enticement always is that you can ride the stock up and dump it before everyone else figures out that it is a scam.
 
Posts: 3832 | Location: Citrus County Florida | Registered: October 13, 2008Reply With QuoteReport This Post
Move Up or
Move Over
posted Hide Post
So it wasn't a golden parachute and they didn't lay 4000 people off yet.

Anything else?
 
Posts: 4677 | Location: middle Tennessee | Registered: October 28, 2008Reply With QuoteReport This Post
Too old to run,
too mean to quit!
posted Hide Post
quote:
Originally posted by FishOn:
Softbank had to pay off Neumann's 500M loan he had against his stock, in addition to cashing out his 1B in equity. Softbank lost 5B on the bailout. This is the kind of crap you see near the end of a run, just like in 1999/2000 when all the junk internet stocks blew up.


Such a "dick move" was pulled by IBM's board when John Akers was President and CEO.

The company had lost money for the first time in generations, if ever. Akers "fudged" to books by pulling all R&D money out and listing it as income, A couple billion. Killed R&D, but inflated the "numbers" and the board gave him a 2.5 million "reward". Also the first time in history. The CEOs were all on salary, period.

IBM had a division called Federal Systems Division (FSD). His next step in running the company into the sewer was to sell FSD to another company. Which basically ended IBM's business with the defense department.

So, rewarding politically correct corporate officers is not new, only getting worse.


Elk

There has never been an occasion where a people gave up their weapons in the interest of peace that didn't end in their massacre. (Louis L'Amour)

"To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical. "
-Thomas Jefferson

"America is great because she is good. If America ceases to be good, America will cease to be great." Alexis de Tocqueville

FBHO!!!



The Idaho Elk Hunter
 
Posts: 24708 | Location: Virginia | Registered: December 16, 2001Reply With QuoteReport This Post
His Royal Hiney
Picture of Rey HRH
posted Hide Post
Even if his final compensation was more reasonable as in 'millions' instead of billion, it still wouldn't be in the neighborhood of 4 months pay.

Having said that, 4 months pay IS very generous. WTF are people complaining about? When a company shut down, I think I got at most 2 weeks pay.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 15610 | Location: Bay Area, CA | Registered: March 24, 2011Reply With QuoteReport This Post
Now in Florida
Picture of ChicagoSigMan
posted Hide Post
I have been involved in the financial markets and venture capital for a long time. It has been a long time since I have seen such an egregious case of hype.

There is nothing magical or unique or innovative in WeWork's business. The are not much different than Regus and similar operators who lease space in buildings, divide it up and sublease it to businesses that need workspaces.

The CEO, with his odd behaviour and self-dealing, should have set off giant flashing warning lights in any venture capital office he visited.

The fact that it ever raised the billions that it did or even came close to an IPO is just insane.
 
Posts: 5503 | Location: FL | Registered: March 09, 2009Reply With QuoteReport This Post
Tinker Sailor Soldier Pie
Picture of Balzé Halzé
posted Hide Post
quote:
Originally posted by Rey HRH:
Even if his final compensation was more reasonable as in 'millions' instead of billion, it still wouldn't be in the neighborhood of 4 months pay.

Having said that, 4 months pay IS very generous. WTF are people complaining about? When a company shut down, I think I got at most 2 weeks pay.


Yeah, and benefits for three of those months as well. I thought that wasn't bad at all.


~Alan

Acta Non Verba
NRA Life Member (Patron)
God, Family, Guns, Country

"My guns are always loaded."
~R.G. Justified

What whiskey will not cure, there is no cure.
 
Posts: 22855 | Location: Ski Town, Utah | Registered: October 29, 2012Reply With QuoteReport This Post
186,000 miles per second.
It's the law.




posted Hide Post
quote:
Originally posted by ChicagoSigMan:
I have been involved in the financial markets and venture capital for a long time. It has been a long time since I have seen such an egregious case of hype.

There is nothing magical or unique or innovative in WeWork's business. The are not much different than Regus and similar operators who lease space in buildings, divide it up and sublease it to businesses that need workspaces.

The CEO, with his odd behaviour and self-dealing, should have set off giant flashing warning lights in any venture capital office he visited.

The fact that it ever raised the billions that it did or even came close to an IPO is just insane.


Thats right. Better Softbank take the hit vs retail IPO bagholders. There was a lot of this type stuff going on in '99-00. Usually retail investors end up with the losses. It is good WeWork never made it to the IPO.
 
Posts: 2382 | Registered: August 19, 2001Reply With QuoteReport This Post
  Powered by Social Strata Page 1 2  
 

SIGforum.com    Main Page  Hop To Forum Categories  The Lounge    Company lays off 4,000 workers, CEO walks away with $1.7b parachute

© SIGforum 2019