WeWork co-founder Adam Neumann announced that he is stepping down as the chief executive officer of the startup, calling the increased scrutiny he faced in recent weeks "a significant distraction."
"While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction. I have decided that it is in the best interest of the company to step down as chief executive," Neumann said in his announcement on September 24.
"As co-founder of WeWork, I am so proud of this team and the incredible company," he added. Neumann will remain chairman of the company he started in 2010 and also continues to control a majority of voting shares.
The move follows increased scrutiny of the office-sharing startup over its governance and profit, ahead of its initial public offering (IPO) plans.
Prior to this announcement, Neumann faced pressure from board members tied to major investor SoftBank, as per people with knowledge of the matter.
Neumann also met with, JPMorgan Chase CEO Jamie Dimon on September 22. Dimon is the lead underwriter for the company's IPO, and the encounter weighed on Neumann's decision to step down, the sources said.
He has come under scrutiny for perceived self-dealing as head of the fast-growing enterprise. In its prospectus to go public, WeWork disclosed that it had leased from entities in which Neumann "has or has had a significant ownership interest."
The company named as co-CEOs Chief Financial Officer Artie Minson and former vice-chairman Sebastian Gunningham.
"We would like to thank Adam for his vision and his passion for building WeWork over the past nine years. Our core business is strong and we will be taking clear actions to balance WeWork's high growth, profitability and unique member experience while also evaluating the optimal timing for an IPO," a joint statement from Minson and Gunningham read.
(With inputs from PTI)
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
