Chamath Palihapitiya
Olivia Michael | CNBC
Tech investor Chamath Palihapitiya slammed WeWork’s corporate governance on CNBC on Tuesday.
“It is really a tale of pretty failed governance, almost of the highest order, short of something fraudulent, and that’s really quite a shame,” Palihapitiya said on “Fast Money Halftime Report.”
Startups, and the venture capital money behind them, need to address corporate governance “if we’re going to have credibility with the public markets,” he said.
Palihapitiya’s comments come as WeWork delayed its planned initial public offering after a number of setbacks including criticism about the CEO having too much power and a massive valuation cut.
On Friday, seemingly in a bid to assuage concerns over founder and CEO Adam Nuemann’s power, the board changed its voting structure to diminish his influence, according to an amended IPO filing.
WeWork also eliminated a provision allowing Neumann’s wife, Rebekah, to lead the search for his successor should he ever become permanently disabled or deceased. Instead, the board would pick a successor.
The filing also states that “no members of Adam’s family will sit on our board.”
WeWork was not immediately available to respond to CNBC’s request for comment on Palihapitiya’s remarks.
— CNBC’s Annie Palmer contributed to this story.
