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- The We Company’s CEO Adam Neumann must donate at least $1 billion to charity in the next decade or his control over the shared-workspace group will be almost halved.
- Adam and Rebekah Neumann — the company’s chief brand and impact officer and his wife — must hit the giving target or their "high-vote" shares will halve in power from 20 voting rights to 10.
- Adam holds the vast majority of voting rights due to the company’s share structure, but he won’t want to see his influence shrink.
- Read more about The We Company on Markets Insider.
The We Company’s CEO Adam Neumann must donate at least $1 billion to charity in the next decade or his control over the shared-workspace group will be almost halved.
The pledge by Adam and Rebekah Neumann — the company’s chief brand and impact officer and his wife — is detailed in the group’s IPO filing. The pair must give $1 billion in cash and equity to charitable causes in the next 10 years or their "high-vote" shares — which carry 20 voting rights each compared to the one vote per normal share — will halve in power to 10 votes apiece.
"Rebekah and Adam are dedicating additional resources to amplify the positive global impact of our organization," The We Company said in its prospectus. "This effort is designed to enable us to scale our social and global impact as the Company grows."
The two WeWork cofounders have donated over 15% of the money they’ve made from selling company shares, the prospectus said. Their first contribution under their new pledge will help conserve over 20 million acres of intact tropical forest, it added.
While The We Company will shortly go public, it has divided ownership of the company into three share classes to ensure Adam maintains control. He holds 2.4 million Class A shares out of about 168 million, granting him less than 1.5% of the voting rights for that share class, according to the prospectus. However, he also holds 113 million Class B shares — 98% of the total — and all 1.1 million Class C shares. Rebekah’s shareholding isn’t disclosed in the filing.
Add the 20 voting rights for each Class B and Class C share to his Class A voting rights, and Adam commands 2.27 billion voting rights, giving him unrivaled control of board decisions. If Adam and Rebekah fail to meet their charity commitments, that figure would almost halve to below 1.14 billion.
While Adam would still command far more voting rights than any other investor based on the current share distribution, that could change over the next decade. As he won’t want to take the risk of losing final say over the company’s activities, his favorite charities can look forward to plenty more checks in the mail.
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Source: Business Insider – tmohamed@businessinsider.com (Theron Mohamed)