Fate of WeWork CEO Adam Neumann lies in hands of one board member

A decision by WeWork’s seven-member board on whether to keep Adam Neumann as CEO could boil down to a tie-breaker — with a Chinese investor who’s little known in the West casting the deciding vote.

Neumann, 40, has told supporters that he faces opposition from just three out of seven directors — and that he expects to beat back their efforts to boot him as CEO of WeWork’s parent company, We Co. sources said.

The only director who Neumann fears could be a wild card is John Zhao, the founder and CEO of Hony Capital, according to a person with knowledge of Neumann’s thinking.

The board tally comes as Neumann faces growing pressure to step down as head of the upscale office rental company amid questions over his leadership, including a troubled stock offering and a recent report that a jet owner had to recall a plane Neumann was on after the crew found marijuana shoved in a cereal box on the flight.

Calls for Neumann to step down are being led by Japanese investment giant SoftBank, which bought shares of We Co. at a $47 billion valuation earlier this year — only to learn that the company would be valued at under $20 billion in an IPO.

The We Co. directors Neumann believes oppose him are Ronald Fisher, a Softbank vice chair; Bruce Dunlevie of venture firm Benchmark, and Mark Schwartz, formerly of Goldman Sachs, sources said.

In Neumann’s corner are We Co. directors Lew Frankfort, chairman emeritus of luxury retailer Coach, and Steven Langman of Rhône Capital, sources said. Neumann, who is chairman, would also back himself in any board vote.

That leaves Zhao — who has been tapped to grow WeWork in Asia — as the potential holdout, sources added. As of Monday evening, Neumann still did not know where Zhao stood on the CEO question— but told people that he believes Zhao would support him if it came down to it, a source said.

“What CEO in the future will take money from that firm if they vote to remove Neumann,” said the source, referring to Zhao’s $10 billion investment firm, which has been tapped to help WeWork grow in Asia.

Certain directors continue to back Neumann because “he’s a brilliant guy who created a $10 billion company from nothing,” a second Neumann supporter said. “All of those stories didn’t say anything … he smokes pot or whatever,” this person said of stories questioning his leadership.

Of course, Neumann has the power through his super majority shares to fire the board, but going nuclear would only reinforce his reputation as an imperial CEO and hurt the stock offering, sources added.

Neumann was blind-sided by Softbank’s move against him, which was first reported in The Wall Street Journal, these people said. He has argued that a new CEO would delay the IPO for at least another year, but is also entertaining a proposal to remain on as non-executive chairman, a source close to him said.

Langman declined comment. Neumann, Frankfort and Schwartz did not return calls. Fisher, Dunlevie and Zhao could not be reached.

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