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Wait so if the products actually worked as expected then he would not have been caught/found guilty? Why is Adam Neumann not also facing prison time for leasing

Wait so if the products actually worked as expected then he would not have been caught/found guilty? Why is Adam Neumann not also facing prison time for leasing his own building/selling "we" to wework?

anotha1 5y ago
Because this is common practice. The business owner my dad worked for "leased" the building and warehouse from his son.
- detaro 5y ago
  Owner is a relevant point. If you funnel shareholder/co-owner money to you that's a problem, if you entirely own the company that argument goes away.
  - anotha1 5y ago
    Yeah, probably not unethical from that standpoint. My dad seemed to think it was some sort tax avoiding inheritance scheme. I guess my question would be, is there a point where it does become illegal even if there was an individual owner? Is there a threshold where leasing at higher than market rate becomes illegal?
    - lotsofpulp 5y ago
      Why would it be illegal to pay yourself more than market rate? In the US, you typically want different entities owning the real estate versus the ones operating the business for liability and tax purposes. The IRS treats owners' basis differently based on whether the income is due to passive (real estate rental) or non passive activity (operations).
      - anotha1 5y ago
        Why? Idk that's why I'm asking. And your comment didn't help clear anything up other than getting across that you are obviously superior in the field of tax law. Thanks.
- Anarch157a 5y ago
  Wasn't that one of the issues with WeWork, the company leasing estate owned by it's founder ?
  - noetokyo 5y ago
    It doesn't make it any less shady/unethical.
notsureaboutpg 5y ago
Because this exec received cash and stocks to approve contracts and purchasing of licenses. It's okay for a business to purchase services from another business and for both businesses to be run by the same person or family. What's not okay is for someone in one business to receive cash and stocks from another business, completely separate from any contract or employment agreement, in order to approve a contract between both businesses especially if this is not disclosed to the person's employer
dfadsadsf 5y ago
Because Adam Neumann did it openly and followed the law? If Netflix VP disclosed company affiliation and kickbacks to Netflix and Netflix was fine with it, it won't be a problem. At much smaller scale, engineer on my team had brother who owned business organizing offsites/company retreats. Engineer suggested we use his brother company for our team offsite (and told what a cool rope courses they do) and disclosed affiliation (that he is his brother). After that I checked websites, looked at other options and decided to go with engineer's brother company. I email HR just in case and it was totally fine. Key was that I (unaffiliated with brother company) made final decision and disclosure of relationship. Event was a blast and frankly I feel that we got more than we paid as brother worked extra hard to make sure everything went smooth and cool. I recommended that company to other managers and I know that a few other teams had events with them. At this point it was twice removed (those managers did not even know engineer on my team) and no disclosure was necessary. Disclosure is key.
- smashah 5y ago
  If something were to go wrong on the retreat would you think there would be a risk of the relationship being of legal consequence? Don't mean to sound like a clown but You know what I've noticed? Nobody panics when things go "according to plan." Even if the plan is horrifying!
  - dfadsadsf 5y ago
    Go wrong as in retreat was boring? I guess I will trust judgment of that engineer a bit less but otherwise I can't think of any consequences. Go wrong as in somebody died? Pretty sure conflict of interest will be about 10th thing anyone will worry about. Go wrong as in rafting guide bantering sexist jokes? Happen to my team without any conflict of interest. Asked him to stop as soon as I heard it, reported to HR, explained situation and nothing came out of it. Again I can't imaging conflict of interest will change anything here.

anotha1 5y ago

Because this is common practice. The business owner my dad worked for "leased" the building and warehouse from his son.

detaro 5y ago
Owner is a relevant point. If you funnel shareholder/co-owner money to you that's a problem, if you entirely own the company that argument goes away.
- anotha1 5y ago
  Yeah, probably not unethical from that standpoint. My dad seemed to think it was some sort tax avoiding inheritance scheme. I guess my question would be, is there a point where it does become illegal even if there was an individual owner? Is there a threshold where leasing at higher than market rate becomes illegal?
  - lotsofpulp 5y ago
    Why would it be illegal to pay yourself more than market rate? In the US, you typically want different entities owning the real estate versus the ones operating the business for liability and tax purposes. The IRS treats owners' basis differently based on whether the income is due to passive (real estate rental) or non passive activity (operations).
    - anotha1 5y ago
      Why? Idk that's why I'm asking. And your comment didn't help clear anything up other than getting across that you are obviously superior in the field of tax law. Thanks.
Anarch157a 5y ago
Wasn't that one of the issues with WeWork, the company leasing estate owned by it's founder ?
- noetokyo 5y ago
  It doesn't make it any less shady/unethical.

notsureaboutpg 5y ago

Because this exec received cash and stocks to approve contracts and purchasing of licenses. It's okay for a business to purchase services from another business and for both businesses to be run by the same person or family. What's not okay is for someone in one business to receive cash and stocks from another business, completely separate from any contract or employment agreement, in order to approve a contract between both businesses especially if this is not disclosed to the person's employer

dfadsadsf 5y ago

Because Adam Neumann did it openly and followed the law? If Netflix VP disclosed company affiliation and kickbacks to Netflix and Netflix was fine with it, it won't be a problem. At much smaller scale, engineer on my team had brother who owned business organizing offsites/company retreats. Engineer suggested we use his brother company for our team offsite (and told what a cool rope courses they do) and disclosed affiliation (that he is his brother). After that I checked websites, looked at other options and decided to go with engineer's brother company. I email HR just in case and it was totally fine. Key was that I (unaffiliated with brother company) made final decision and disclosure of relationship. Event was a blast and frankly I feel that we got more than we paid as brother worked extra hard to make sure everything went smooth and cool. I recommended that company to other managers and I know that a few other teams had events with them. At this point it was twice removed (those managers did not even know engineer on my team) and no disclosure was necessary. Disclosure is key.

smashah 5y ago
If something were to go wrong on the retreat would you think there would be a risk of the relationship being of legal consequence? Don't mean to sound like a clown but You know what I've noticed? Nobody panics when things go "according to plan." Even if the plan is horrifying!
- dfadsadsf 5y ago
  Go wrong as in retreat was boring? I guess I will trust judgment of that engineer a bit less but otherwise I can't think of any consequences. Go wrong as in somebody died? Pretty sure conflict of interest will be about 10th thing anyone will worry about. Go wrong as in rafting guide bantering sexist jokes? Happen to my team without any conflict of interest. Asked him to stop as soon as I heard it, reported to HR, explained situation and nothing came out of it. Again I can't imaging conflict of interest will change anything here.