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WeWork CEO Adam Neumann makes millions from renting office space back to the company: report

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Adam NeumannWeWork CEO Adam NeumannJackal Pan / Getty

  • WeWork CEO Adam Neumann reportedly made millions of dollars by renting office space in buildings that he partially owns back to the company, according to a Wall Street Journal report on Wednesday
  • In a filing for prospective investors last year, WeWork reportedly disclosed that it paid $12 million in rent between 2016 and 2017 to buildings “partially owned by officers” of WeWork.
  • Investors tell the Journal that they’re concerned that the situation creates a conflict of interest — if those buildings were to raise their rents, Neumann could potentially stand to benefit.
  • WeWork tells Business Insider that Neumann only has a stake in four properties from which it leases space, out of the 400-plus coworking spaces the company operates globally, and that its board and investors are both fully aware of the situation. 

WeWork, the coworking company said to be valued at $47 billion, has been renting space in buildings partially owned by its CEO Adam Neumann, according to a Wall Street Journal report on Wednesday — an arrangement that’s reportedly netted the executive millions of dollars. 

Multiple WeWork investors told the Journal that the arrangement was concerning to them, as the situation creates a potential conflict of interest for Neumann.  For example, if those buildings were to raise WeWork’s rent, Neumann could personally profit. WeWork’s business model involves leasing large amounts of office space, and then subleasing smaller chunks of that space out to individuals, startups, and smaller groups.  

In a document for prospective investors last year, the company disclosed that it paid $12 million in rent between 2016 and 2017 to buildings “partially owned by officers” of WeWork, and said that it will pay more than $110 million over the lifetime of those leases, according to the report. 

Neumann reportedly has a 50% stake in an 11-story New York City building where WeWork operates a coworking space. The Journal also reports that Neumann is the “main investor” in a group that buys multiple properties in San Jose, CA, some of which are leasing space to WeWork. 

A spokesperson for WeWork tells Business Insider that Neumann only has a stake in four properties from which the company operates, out of its network of 400 coworking spaces globally. Furthermore, the company says that everything has been disclosed to investors and approved by the board, and that it hasn’t heard complaints. 

“WeWork has a review process in place for related party transactions. Those transactions are reviewed and approved by the board, and they are disclosed to investors,” said the spokesperson.

Of note, however, is that in a 2014 fundraising deal, Neumann was awarded enough equity in the company to exert voting control over its board of directors. While WeWork’s board mainly consists of independent directors, Neumann’s vote is enough to make or break any proposal.

Read the full Wall Street Journal report here

Earlier this month, the coworking company announced it would be rebranding from WeWork to The We Company, which it said would better reflect company’s ambitions of moving beyond providing office space and pushing further into markets like education or residential living.

Read more: WeWork is changing its name to ‘The We Company’ as SoftBank invests $2 billion

The day before the rebranding was announced, WeWork lost out on a $16 billion investment from the Japanese tech company Softbank, which decided to downsize its investment to $2 billion. 

 

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More groups join in support of women in STEM program at Carleton

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OTTAWA — Major companies and government partners are lending their support to Carleton University’s newly established Women in Engineering and Information Technology Program.

The list of supporters includes Mississauga-based construction company EllisDon.

The latest to announce their support for the program also include BlackBerry QNX, CIRA (Canadian Internet Registration Authority), Ericsson, Nokia, Solace, Trend Micro, the Canadian Nuclear Safety Commission, CGI, Gastops, Leonardo DRS, Lockheed Martin Canada, Amdocs and Ross.

The program is officially set to launch this September.

It is being led by Carleton’s Faculty of Engineering and Design with the goal of establishing meaningful partnerships in support of women in STEM.  

The program will host events for women students to build relationships with industry and government partners, create mentorship opportunities, as well as establish a special fund to support allies at Carleton in meeting equity, diversity and inclusion goals.

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VR tech to revolutionize commercial driver training

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Serious Labs seems to have found a way from tragedy to triumph? The Edmonton-based firm designs and manufactures virtual reality simulators to standardize training programs for operators of heavy equipment such as aerial lifts, cranes, forklifts, and commercial trucks. These simulators enable operators to acquire and practice operational skills for the job safety and efficiency in a risk-free virtual environment so they can work more safely and efficiently.

The 2018 Humboldt bus catastrophe sent shock waves across the industry. The tragedy highlighted the need for standardized commercial driver training and testing. It also contributed to the acceleration of the federal government implementing a Mandatory Entry-Level Training (MELT) program for Class 1 & 2 drivers currently being adopted across Canada. MELT is a much more rigorous standard that promotes safety and in-depth practice for new drivers.

Enter Serious Labs. By proposing to harness the power of virtual reality (VR), Serious Labs has earned considerable funding to develop a VR commercial truck driving simulator.

The Government of Alberta has awarded $1 million, and Emissions Reduction Alberta (ERA) is contributing an additional $2 million for the simulator development. Commercial deployment is estimated to begin in 2024, with the simulator to be made available across Canada and the United States, and with the Alberta Motor Transport Association (AMTA) helping to provide simulator tests to certify that driver trainees have attained the appropriate standard. West Tech Report recently took the opportunity to chat with Serious Labs CEO, Jim Colvin, about the environmental and labour benefits of VR Driver Training, as well as the unique way that Colvin went from angel investor to CEO of the company.

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Next-Gen Tech Company Pops on New Cover Detection Test

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While the world comes out of the initial stages of the pandemic, COVID-19 will be continue to be a threat for some time to come. Companies, such as Zen Graphene, are working on ways to detect the virus and its variants and are on the forefronts of technology.

Nanotechnology firm ZEN Graphene Solutions Ltd. (TSX-Venture:ZEN) (OTCPK:ZENYF), is working to develop technology to help detect the COVID-19 virus and its variants. The firm signed an exclusive agreement with McMaster University to be the global commercializing partner for a newly developed aptamer-based, SARS-CoV-2 rapid detection technology.

This patent-pending technology uses clinical samples from patients and was funded by the Canadian Institutes of Health Research. The test is considered extremely accurate, scalable, saliva-based, affordable, and provides results in under 10 minutes.

Shares were trading up over 5% to $3.07 in early afternoon trade.

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