Uproar Over Two New Directors Appointed at Uber

Adjust Comment Print

Those two coordinated moves could drastically reshape the ride-hailing company's governance, while officially kick-starting what could end up being the largest private stock sale in history. The meeting will come days after the new CEO, Dara Khosrowshahi, proposed cutting the seats Kalanick controlled down from three to one, and raising his own to five from one.

On Friday, Kalanick had appointed Ursula Burns, Xerox Corp.'s former CEO, John Thain, former Merrill Lynch chief, to the company's board without consulting with the rest of the board.

A DE judge later that month sent the Benchmark lawsuit to arbitration.

Uber's board of directors reportedly plans to vote Tuesday, Oct. 2 on whether to cut its former CEO and co-founder's power on the committee.

The governance plan that touched off the latest politicking was created by Mr. Khosrowshahi and Goldman Sachs as part of a bigger effort to finalize a deal to sell billions of dollars of Uber stock to the Japanese conglomerate SoftBank, according to a person briefed on the proposal. And numerous proposals - including a mechanism to push Uber toward an IPO if more than a third but less than half the board support the move - are indeed unusual. The New York Times obtained a letter from the company's new CEO to its employees on September 29, which called Kalanick's actions as "disappointing" and added of the power struggle that "anyone would tell you that this is highly unusual". "So I am pretty sympathetic to them".

Kalanick's action on Friday could be subject to a new legal challenge.

Uproar Over Two New Directors Appointed at Uber
Uproar Over Two New Directors Appointed at Uber

Division among Uber investors exploded in public in August, when Benchmark Capital filed a lawsuit to force Kalanick off the board and rescind his ability to fill two other seats on the panel, accusing him of concealing a range of misdeeds. In an email to employees, Khosrowshahi called the decision "disappointing", writing, "Travis appointed two new members to Uber's Board without discussing it with me or the Board of Directors more broadly". This will limit directors from exercising their power irresponsibly. It's not clear whether the pair will join the board, though at least one current director believes the group will embrace Kalanick's appointees, a person familiar with the matter said.

Uber did not respond on Saturday to a request to comment about the Khosrowshahi plan.

One proposal was that one share is equivalent to one vote, meaning that some members of the board would have less power.

These proposals would ultimately shift the board's power and people such as Kalanick or even investors such as Benchmark would have a significantly reduced amount of power. Benchmark is a major proponent of the changes while Kalanick is opposed. The measure states that any person who has previously been an officer of Uber can return as chief executive only if he or she can get the approval of two-thirds of the board and 66.7 percent of all shareholders.

Ms Burns and Mr Thain took their seats on Monday and will be eligible to vote at Tuesday's board meeting in San Francisco, three people said.

Kalanick's lawyer at the time told the court that Kalanick had not rushed to fill the seats.

Black cab for Uber boss Jo Bertram as she leaves firm
He will have to grapple several grounds for concern among officials in London about the way Uber operates. The firm's London boss Tom Elvidge will head up United Kingdom operations on an interim basis, he said.


Comments