Let's begin three weeks ago, when WeWork made public its long-awaited IPO filing. Buried on the 199th page of the company's prospectus were two sentences that told a short story. To paraphrase: After WeWork officially changed its name to The We Company earlier this year, it acquired the rights to certain "we" trademarks in exchange for partnership interests (i.e., stock) worth $5.9 million. The LLC that received that $5.9 million payment for the rights was controlled by WeWork's CEO, Adam Neumann.
Essentially, Neumann changed the name of the company, then paid himself $5.9 million for the new name. It was an unsavory bit of self-dealing that, among several other aspects of the filing, sparked debate about how deeply Neumann is intertwined, financially and otherwise, with the company he co-founded—one he's helped build into a co-working colossus that was valued at $47 billion in a SoftBank-led round of funding earlier this year.
It was a case of a CEO getting caught with his hand in the cookie jar. And now, Neumann is trying to quietly withdraw his hand and dust off any crumbs that might be lingering.
WeWork filed an updated version of its IPO prospectus Tuesday, one that included notes on two recent developments. First, that Harvard Business School professor and former Uber executive Frances Frei has joined the company's board, becoming its first female director. And second, that Neumann has returned the $5.9 million in partnership interests he received in exchange for the "we" trademarks—a move, the filing helpfully notes, that was undertaken "at Adam's direction."
The rest of WeWork's prospectus appears unchanged, with information on the size of the offering and an estimated price range still to come. The company could launch its roadshow early next week, according to Bloomberg.
WeWork had taken heat both for the lack of women on its board and for some unusual corporate governance practices. The addition of Frei and the return of Neumann's partnership interests would seem to be steps in the right direction, signs that the company is willing and able to respond to criticism. The motivation for both moves is admirable.
Yet the fact of Neumann's prompt and willing reversal also raises a slightly disturbing question. It would seem that either the CEO didn't think anyone would notice the $5.9 million transaction in WeWork's original IPO filing, or he didn't think anyone would care. Which is worse?
Featured image via Noam Galai/Getty Images for TechCrunch
Related read: The strange world of WeWork