Can WeWork CEO Sandeep Mathrani Work His Magic Again?
Mathrani has experience pulling troubled companies out of the trenches. Can he help WeWork rebuild its image and take it public?
April 2 2021, Updated 11:01 a.m. ET
With an Apple TV series on the horizon, WeWork is one step closer to becoming a household name—but is it for the right reasons? The company's failed IPO and executive breakdown in 2019 led to then-CEO Adam Neumann stepping down. He was replaced by Sandeep Mathrani in February 2020. Now, with a reverse merger in WeWork's lap, it looks like the company still gets to go public after all.
As for Mathrani, he's raking in a CEO-rated salary, but what exactly does that mean?
Sandeep Mathrani took his post after WeWork CEO scandal.
Mathrani has been the CEO of WeWork for just over a year, but he's already spearheading another public offering. This time, it's with the help of SPAC BowX Acquisition.
Public WeWork stock doesn't exactly sit well on the tongue given its valuation's malleability in recent years. After the company's failed $50 billion IPO, its main backer—Japanese VC firm SoftBank—took control over the company. Together with WeWork, SoftBank pressured Neumann out of his executive role, which effectively eliminated his rise to startup stardom.
Just a few months later, SoftBank revoked its plan to purchase $3 billion in company shares, which Neumann subsequently sued the firm for. Neumann was able to hold onto his shares (given the hundreds of millions he lost in the controversy), but SoftBank's termination of the share purchase caused his securities to take a dive in value. A layoff of thousands ensued at WeWork.
In short, Mathrani really inherited a mess. Currently, the company claims a $9 billion valuation, which is less than one-fifth of its 2019 appraisal. As a coworking operation that leases, renovates, and subleases office space, the new normal of social distancing poses a lot of potential for the company. Companies will likely seek fresh setups with health and safety in mind. Amid the winding road, WeWork will have to make up for a lot of lost ground. Apparently, Mathrani is ready to take that on.
Sandeep Mathrani's salary as WeWork's CEO is unknown.
Mathrani's current salary at WeWork is unknown, but we can base his compensation off his previous role. In 2018, he worked as CEO of Brookfield Property Partners and made an annual salary of $14 million. It's hard to imagine Mathrani would take a pay cut for such a tricky job as WeWork.
That same year, Mathrani served as the lead facilitator for Brookfield Property's acquisition of General Growth Properties (GGP)—a deal that went down for $15 billion. Mathrani isn't a stranger to monumental deals.
Sandeep Mathtani knows how to pull a company out of the trenches.
In 2011, Mathrani became the CEO of GGP. The company had just gone through a Chapter 11 bankruptcy. It was the largest real estate bankruptcy ever and included 160 of the company's subsidiaries in the case. The fact that Mathrani was able to get GGP to the point of a $15 billion sale just seven years after he became the CEO is noteworthy.
Given Mathrani's history, WeWork might very well have a shot in the public and consumer markets. However, with an Apple TV series starring Jared Leto as Neumann, the company will have to fight against its tainted image.