Uber’s board reportedly is set to consider reforms that would further reduce ousted CEO Travis Kalanick’s power and make it harder for him to return as chief executive.
SAN FRANCISCO — The soap opera that is the Uber story continues Tuesday, when a deeply fractured board reportedly votes on measures intended to further cut the power of its ousted CEO.
Proposed board reforms would limit former chief executive Travis Kalanick’s influence as a board member and shareholder, make it more difficult for him to ever return as CEO, give all shareholders equal voting power and move Uber toward an IPO in the next two years, Bloomberg reported. The board is also expected to discuss a proposed $10 billion stock sale to SoftBank.
This latest wave of drama started late Friday, when Kalanick — kicked out by investors in June — made a surprise announcement. The ousted executive said he had appointed two new members to Uber’s board: former Xerox CEO Ursula Burns and former Merrill Lynch CEO John Thain. The move was seen as a slap in the face to the rest of the ride-hailing company’s executives and board, who apparently weren’t consulted before the decision was made.
“The appointments of Ms. Burns and Mr. Thain to Uber’s Board of Directors came as a complete surprise to Uber and its Board,” a company spokesman wrote in an emailed statement. “That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of.”
It also was a blow to Uber’s new chief executive, Dara Khosrowshahi.
The new CEO called the move by his predecessor “disappointing” in an internal email to employees, Bloomberg reported. He wrote: “Travis appointed two new members to Uber’s Board without discussing it with me or the Board of Directors more broadly. Anyone would tell you that this is highly unusual.”
In a statement emailed to this news organization by his spokesman, Kalanick wrote it was important to appoint the new board members when he did.
“I am appointing these seats now in light of a recent Board proposal to dramatically restructure the Board and significantly alter the company’s voting rights,” he wrote. “It is therefore essential that the full Board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John.”
“I am confident that, with their additions and Dara’s appointment,” he continued, “Uber will be well situated to focus on the future and continue to revolutionize how cities move.”
Burns was CEO of Xerox from 2009 to 2016, and now serves on the board of American Express, Exxon Mobile, Nestle and Datto. Former President Barack Obama appointed her to help lead the White House’s science, technology, engineering and math (STEM) program from 2009 through 2016.
Thain was CEO of Merrill Lynch until its $50 billion sale to Bank of America in 2008. After that, he served as CEO of CIT Group from 2010 to 2016.
Meanwhile, Kalanick is fighting a lawsuit brought by his high-profile investors at Benchmark, who sued him for fraud over the summer. The investors are attempting to snatch Kalanick’s board seat and prevent him from appointing his allies to the board. It’s unclear what will happen now that Kalanick already has appointed two new members. That suit is proceeding in private arbitration after a judge removed it from open court.
