WeWork Makes Massive Changes To Its Corporate Governance Ahead Of The IPO – ZMR Blog
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WeWork Makes Massive Changes To Its Corporate Governance Ahead Of The IPO

The parent company of We Work has said on Friday that substantial changes will be made to their business after the investors have expressed their dissatisfaction over the governance structure in advance of their IPO.

The biggest of the changes is that We Co.’s voting shares will not be super as they had originally planned before. 20 votes were planned for each Class A stock share which is given to the early investors and the founders of the company. This has been reduced to 10 each now. In case Adam Neumann, the co-founder and CEO of the company becomes incapacitated or in the event of his death, the extra votes will completely disappear. 2.4 million Shares are there with Neumann. The Benchmark Capital Partners and Bruce Dunlevie, its chief who is also a director of WeWork has 32.6 million of its shares.

The other important change in the corporate governance is how the successor of Neumann will be named. Previously in case of death of Neumann or he becomes incapacitated within ten years following IPO, the decision of finding the new successor was given to Rebekah Neumann, his wife along with the two directors of the company. However experts had raised many concerns over this plan. Now as per the new plan, the choice of selecting the successor lies with the board of directors just like the case of any public company.

As per the Wall Street Journal, the company has planned to seek a valuation around $20 billion range for their planned IPO. According to the CB Insights the firm was valued at $47 billion previously. The growth of the firm is rapid. $1.5 billion was the revenue of the firm during the first half of the current year which was twice that of the year 2018 and was 250% more than what was in the year 2016. However the losses have also gone high. $904 million was the net loss reported during the first half of the year and was $4.2 million since the beginning of 2016.

WeWork is a New York based company which was founded in 2010 by Neumann along with Miguel McKelvey. In the IPO prospectus the firm has described themselves as a community company which is committed in providing the utmost global impact.

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