CEO’s $8.6m two-letter word backflip
The billionaire founder of a wildly successful start-up has been slammed after it emerged he received millions from his own company for the use of a single word.
Adam Neumann co-founded WeWork in 2010, along with Miguel McKelvey.
The company provides shared workspaces for tech start-ups and services for entrepreneurs, freelancers, small businesses and large enterprises.
But after WeWork filed to go public recently, one surprising detail was revealed.
The public learnt Mr Neumann had been paid a staggering $US5.9 million ($A8,678,605) by his own company.
The reason for the payment? The use of the word "we".
According to Business Insider, the payment came about when WeWork "reorganised and rebranded" as The We Company in January ahead of its initial public-offering filing.
Mr Neumann, 40, owned the trademark "We" through a private company, We Holdings LLC, which then sold the use of the word to WeWork.
The controversial move was panned by a range of experts, including New York University marketing professor Scott Galloway, Axios' Dan Primack and Trition Research Inc CEO Rett Wallace.
"Adam also owned the rights to the 'We' trademark, which the firm decided they must own and paid the founder/CEO $US5.9 million for the rights. The rights to a name nearly identical to the name of the firm where he's the founder/CEO and largest shareholder. YOU. CAN'T. MAKE. THIS. S*IT. UP," Mr Galloway said, according to Business Insider.
Meanwhile, Vanity Fair quoted Mr Primack as saying it was "abusive of the company's balance sheet", while Mr Wallace described it as a "masterpiece of obfuscation".
In the wake of the outcry, WeWork has backtracked, revealing in a document filed with the Securities and Exchange Commission it had reclaimed the money - and the use of the "we" trademark - at Mr Neumann's request.
"The issuance to We Holdings LLC of the partnership interests was unwound and the partnership interests were returned to the We Company Partnership," the document reads.
"The We Company continues to hold all of the assigned rights to the 'we' family trademarks." According to Forbes, the company has raised "about $8 billion from investors like Goldman Sachs and SoftBank" since its inception nine years ago.
It rents out office space in more than 90 cities globally and was most recently valued at $42 billion.
Before co-founding WeWork, the father of five, who lives in New York but was born and raised in Israel, ran a business that made baby overalls with built-in knee pads.