A true genius would increase his net worth by building a successful business. If you're not clever enough to do that though, there's always self-dealing.
It's not clear that it's possible to build a successful, long-term business by shouldering all the long-term risks of owning office space, and leasing it out at short-term rates to startups.
In that situation, the smartest move is to plunder your investors and shareholders for everything they are worth.
I think that line of reasoning might take us to a realm where plundering is always the smart option, offering certainty where the alternative is risky.
It is not completely legal though. Someone like a CEO has a fiduciary responsibility to act in the best interests of the company. "Breach of Fiduciary Duty" is a real thing, and opens you up to liability for actual loses as well as punitive damages. So while I understand why the CEO would do this, it's probably a good idea to step back from that activity, especially on the verge of an IPO where the investor market might take a hard pass at a company whose CEO appeared ready to strip the enterprise for parts and abscond with the proceeds.
"Breach of Fiduciary Duty" sounds like one of those things that you're supposed to do, but which is almost impossible to prove (after all you just have to claim "I thought it was a good idea" and you're covered), and so is basically never enforced. It's the kind of rule that ethical, good CEOs worry about, and the kind of rule successful CEOs don't waste energy on.
BTW, I notice that commenters often have wildly different views of what rules mean. To some, they mean something intrinsically, and it's the players duty to understand and abide by them. To others, rules mean nothing unless they are enforced, and even then you have tons of wiggle room (roughly proportional to the money you spend on your defense). (And these days there's a vocal third crowd that says the government shouldn't enforce rules against businesses of a certain size "because it makes us vulnerable".)
Yeah, I imagine it's hard to prove when the CEO just games the company's performance metrics to improve their compensation package, but self-dealing makes things at least a little bit clearer. I wouldn't be surprised if there's at least one activist investor lined up with plans to take advantage of the situation and start a shareholder lawsuit.
As for a good CEO vs. successful CEO, I guess I don't actually view the later as "successful", because their actions either hurt the company or at least hindered its success. I look at the failure of Sears, abetted by a self-dealing CEO, as a prime example of failure in this area.
> I think that line of reasoning might take us to a realm where plundering is always the smart option, offering certainty where the alternative is risky.
In a business with very risky long-term fundamentals, yes.
If you are trying to run a factory that makes widgets, or a store that sells widgets, or even a social network where people discuss widgets... There are obvious ways to build a successful business around these things. Just do what your competitors do, but better. It's very clear that a viable business can be made of this sort of thing, and that being a corporate pirate is just one of multiple ways of enriching yourself.
When your business consists of giving away a dollar for ninety cents, personal plunder is the only smart maneuver. Your shares aren't going to be worth the paper they are printed on, once the music stops, regardless of the heroic efforts you might, or might not undertake.
"Just do what your competitors do, but better" is indeed obvious. That would be the strategy. The tactics, however, are not so obvious, and the difficulty lies in execution. As just one of many possible example, even a great, visionary CEO might fail in the face of a stagnant workforce unable to adapt to the changes as capital runs out and debt runs high. And great, visionary CEO's are exceedingly rare.
Further, you assume that legitimate compensation would exceed what a predatory CEO could extract by self-dealing and gaming performance metrics. Even a successful business may have much more upside for the CEO in self-dealing rather than long term hard work. Why put in the hours to increase your legitimate compensation package when instead you can siphon the same or greater amounts via self-dealing? Or even just half of that, but in a tenth of the time before moving on to the next victim company?
Sure, but in this case "smart" may also != "legal". Breach of fiduciary duty would seem to come into play, especially after an IPO when activist shareholders may rise up and make a stink about it.
> A true genius would increase his net worth by building a successful business.
Which would mean not having pesky VC's with massive liquidity preferences.
Neumann is playing very efficient cards, his problem is trying to simultaneously portray this as something the public market should invest in.
Everyone gullible enough to consider WeWork shares on the public markets as validation - aka ALL the employees - should re-evaluate. Let the shares float, but no need for the lead underwriters to hold up syndicate bid, just let it float to its natural share price without the window dressing.
He is building a successful business, it's just that that business isn't necessarily WeWork. I don't hold their stock, I'm not one of their VCs, what he and WeWork do is not my business, I have no quarrel with it.
Precisely, the successful business may be him acting as vendor to which WeWork outsources various things. So he's the CEO, and uses company resources to outsource some of his responsibilities. It's just that he's also the person that is receiving those outsourced responsibilities. I'd like to try that myself-- "Hey boss, I can't do all of this work. I think we should outsource it, and I know just the person for the job, he's already familiar with the work, has free time, and is standing right in front of you!"
I'd strongly suggest the book. It goes into amazing detail and is super well written. I'm generally more into literature when not reading work related things. This was just fun to read.
[0] WeWork’s CEO Makes Millions as Landlord to WeWork - https://www.bizjournals.com/sanjose/news/2019/01/16/wework-c...