In no uncertain terms, John Legere has been credited with successfully turning around T-Mobile (NASDAQ:TMUS), engineering the wireless carrier's transformation into the Un-carrier after taking the helm in 2012. In the years since, Legere shepherded in the installment plan model that supplanted the subsidy model while addressing countless other pain points in the industry -- all while growing T-Mobile's subscriber base by more than ninefold.
As T-Mobile chugs toward the finish line of its blockbuster $26 billion megamerger with Sprint, the Un-carrier may now be at risk of losing its eccentric Un-CEO (and his weekly slow-cooking show on social media).
The Wall Street Journal reports that beleaguered co-working start-up WeWork has approached Legere to take over the top job. WeWork had filed its S-1 Registration Statement with the SEC in August, making a major step toward going public, but the document uncovered all sorts of bizarre red flags and examples of self-dealing on the part of former CEO Adam Neumann. Investors balked, WeWork pulled its IPO, and absurd stories have been circulating and entertaining us in the months since.
WeWork named two executives, Artie Minson and Sebastian Gunningham, co-CEOs to take over following Neumann's exit. Those co-chiefs secured multimillion-dollar severance packages as part of Softbank's bailout of the company, which earned its excessive valuation in part by masquerading as a tech company.
WeWork is now facing massive layoffs and plans to divest "non-core" segments like its stake in a wave pool company that specializes in making lagoon technology. Amid the widespread use of specialized metrics that don't adhere to generally accepted accounting principles (GAAP), WeWork also received strong pushback for wanting to use a metric called "community adjusted EBITDA" that cleverly excluded basic operating expenses like rent, employee salaries, and costs related to amenities.
As T-Mobile and Sprint have been trying to merge for over a year and a half, Legere has grown closer to Sprint Executive Chairman Marcelo Claure, who previously served as Sprint CEO and used to clash with Legere before the carriers proposed the combination. Claure is now Softbank's chief operating officer and was recently named WeWork's executive chairman as part of the bailout.
Legere has a ton of money personally riding on the Sprint deal. The chief executive took home over $66.5 million in compensation last year, according to regulatory filings. When T-Mobile first proposed the merger in early 2018, it granted Legere nearly 600,000 special restriction stock units (RSUs), currently worth nearly $50 million based on current levels, that are tied to the deal's closing. However, that equity will still vest once Legere's contract is up at the end of April 2020, just under six months from now, even if the merger falls through.
The proposed merger has cleared all regulatory roadblocks but now faces a legal challenge in the form of a multistate lawsuit that seeks to the block it. T-Mobile remains confident that it can close the deal in early 2020.