Adam Neumann’s billion-dollar exit package from WeWork is a lesson in giving founders too much control

Adam Neumann’s eye-popping deal with SoftBank to exit WeWork is being described by corporate governance experts as a prime example of the issues with dual-class shares, where founders or early investors receive “high-voting shares” with voting rights disproportionate to their economic interest.

The news of Neumann’s package, which would let him walk away with as much as $1.2 billion, as well as a loan to repay a credit line, comes amid increasing pushback from investors as start-up unicorns such as Lyft, Pinterest and Peloton continue to go public with such arrangements.

Mark Zuckerberg holds nearly 60 percent of the voting power at Facebook with his super-voting shares. At Snap, the common shares offered as part of its IPO had no voting rights at all; its 2018 annual report said its co-founders controlled 97 percent of the voting power. Neumann’s shares at one point granted him 20 votes per share; that figure dropped to 10 votes per share before he stepped down as CEO. Read Full Article - The Washington Post, October 24, 2019