(Reuters) – WeWork owner The We Company said on Friday it has curbed the voting power of founder and CEO Adam Neumann, as part of changes to its corporate governance aimed at boosting demand for its planned initial public offering.
FILE PHOTO: The WeWork logo is displayed on the entrance of a co-working space in New York City, New York U.S., January 8, 2019. REUTERS/Brendan McDermid/File Photo
The loss-making company said it was making the changes “in response to market feedback.”
Neumann’s superior voting shares will decrease to 10 votes per share from 20, it said in a regulatory filing.
He will also give the company any profits he receives from real estate deals he has entered into with We Company.
Neumann will retain majority control of We Company after the IPO, the firm said, but no member of Neumann’s family will be on the company’s board and any successor will be selected by the board.
That scraps a plan for his wife and co-founder Rebekah Neumann, who is chief brand and impact officer, to help pick the successor.
In the run-up to its IPO, We Company has faced concerns over its corporate governance standards as well as the sustainability of its business model.
That model relies on a mix of long-term liabilities and short-term revenue, raising concerns about how it would weather an economic downturn.
We Company may seek a valuation of $15 billion to $18 billion in its IPO, down from the $47 billion value it commanded in its last private fundraising round in January, Reuters reported this week.
It plans to list its stock on the Nasdaq as early as this month.
Reporting by Anirban Sen in Bangalore and Joshua Franklin in New York; editing by Saumyadeb Chakrabarty and Jason Neely