Adam Neumann of WeWork is a monster

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com, or follow me on Twitter.

Interesting:

The Narcissism of Modern Financiers

There are a few key players in this saga. The first is ex-CEO Adam Neumann, who according to the S-1 was pivotal to the company.

Our future success depends in large part on the continued service of Adam Neumann, our Co-Founder and Chief Executive Officer, which cannot be ensured or guaranteed.

Neumann was an untested CEO with an unlimited line of credit. As I read more stories about him, I noticed reporters dance around his personality. They call him ‘quirky,’ ‘charismatic,’ ‘unorthodox,’ and so forth. These are code words for something else.

Consider a few descriptions of how he and his family behaved. His wife, a New Age guru who was the chief impact officer, would fire employees because she ‘didn’t like their energy.’ They banned employee expensing of meals with meat (employees later saw Neumann eating meat). And then there’s this episode, which I found particularly revealing:

A few weeks after Mr. Neumann fired 7% of the staff in 2016, he somberly addressed the issue at an evening all-hands meeting at headquarters, telling attendees the move was tough but necessary to cut costs, and the company would be better because of it.

Then employees carrying trays of plastic shot glasses filled with tequila came into the room, followed by toasts and drinks.

Soon after, Darryl McDaniels of hip-hop group Run-DMC entered the room, embraced Mr. Neumann and played a set for the staff. Workers danced to the 1980s hit “It’s Tricky” as the tequila trays made more rounds; some others, still focused on the firings, say they were stunned and confused.

Mass layoffs followed by an expensive alcohol fueled party hosted by a celebrity reflects a problematic leadership style, to put it mildly. Neumann paired poor judgment with self-dealing. By now the story of Neumann’s corruption is well-known; he has pulled roughly $700 million from the company, owns buildings personally he leases to WeWork, and flies around on private jets. But the self-dealing is camouflaged with something else. Take this passage from the S-1.

To evidence their commitment to charitable causes and to ensure this commitment is meaningful, if Adam and Rebekah have not contributed at least $1 billion to charitable causes as of the ten-year anniversary of the closing date of this offering, holders of all of the Company’s high-vote stock will only be entitled to ten votes per share instead of twenty votes per share.

I don’t think there’s a better example than this passage of using philanthropy as moral cleanser. It is something Anand Giridharadas has written about as a pivotal element of modern capitalism.

All of this, the faux philanthropy, the strange management choices, the personal behavior, and so forth indicates something very simple. I am going to be blunt, because it’s time to stop using euphemisms just because someone is rich and a business leader. Adam Neumann is not “quirky,” he is not “charismatic,” and he does not have “an unorthodox leadership style.” He is an untalented and abusive monster who lies to get what he wants. And he was given an unlimited credit line from which he could legally steal.

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