Despite announcing 2,400 layoffs last month (with potentially more to come), WeWork continues to reward the executives who steered the company from potential huge IPO to financial disaster. The Financial Times reports that current co-CEOs Artie Minson and Sebastian Gunningham—Minson was formerly the president and co-chief operating officer, and Gunningham was the vice chair and chief automation officer, before they were promoted to the joint CEO position after founder Adam Neumann was forced out by the board—will likely receive $8 million each if they leave, and chief legal officer Jennifer Berrent will receive $1.5 million. The board has already considered removing all three.
Why would any corporate board green-light $8 million exit packages to embattled CEOs? It’s how they attract top talent to lead companies with dire financial outlooks such as WeWork, knowing that ejected CEOs rarely get rehired as leaders—only 5.5% of former CEOs under age 60 are hired elsewhere as CEO.
But WeWork’s rank and file has suffered tremendously while its executives pocket cash. CEO Adam Neumann exited in September with an exit package worth $1.7 billion and may receive hundreds of millions in additional payout based on a complex conversion of stock shares that previously held little value.
Last month 150 employees wrote an open letter to management deriding the “exclusion and selfishness playing out at the company’s highest levels” and begging for fair severance packages for laid-off coworkers. The company has been downsizing due to a cash shortage, which was caused by a failed IPO that staffers had expected to make them wealthy.
The latest executive exit package details were released to shareholders preceding Softbank’s upcoming $3 billion tender offer, which will temporarily rescue the company. Both co-CEOs currently earn $1.5 million in salaries. Minson holds vested stock shares worth up to $14 million, while Berrent’s are worth up to $4.9 million.