Former Uber CEO names 2 board members amid legal struggle
Travis Kalanick, the co-founder and former chief executive officer of Uber Technologies Inc., named two new directors without consulting the company’s new leader or other board members, escalating a Machiavellian battle for control of the world’s most valuable startup.
Kalanick said late Friday that he had appointed Ursula Burns, former Xerox CEO, and John Thain, an ex-CEO of Merrill Lynch, to the startup’s board. Uber challenged the appointments, calling them “a complete surprise.”
The former CEO is defending himself against a lawsuit brought by Uber’s largest shareholder, Benchmark Capital, over his authority to fill the two board seats. Kalanick says he controls three of the company’s 11 board seats. Benchmark is suing Kalanick for fraud and has asked him to relinquish control of board positions. The suit is in arbitration.
Kalanick resigned as CEO on June 20 after Benchmark and a group of early investors asked him to step down. Uber’s board has been rife with infighting and went through a contentious process to select former Expedia CEO Dara Khosrowshahi to replace Kalanick.
“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,” Kalanick said in an email. “It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members.”
Uber expressed concern at Kalanick’s announcement, saying it was “working to put in place world-class governance.”
Kalanick remains supportive of Khosrowshahi, the person said. The former CEO saw the two appointments as a way to improve the company’s board of directors ahead of a vote on Uber’s governance structure, a person familiar with the matter said.
Last week, governance reforms drafted by the company and Goldman Sachs were circulated among the board, people familiar with the matter said. The board had planned to vote on them Tuesday. The people asked not to be identified because they were discussing private matters.
One proposal would make one Uber share equal one vote. That would wipe out the extra power of stock held by early investors like Benchmark and Kalanick.
The company also proposed giving one of Kalanick’s three board seats to SoftBank Group as part of a possible investment in the startup by the Japanese technology giant, the people said.
Another proposal: Requiring a two-thirds vote from the board to appoint a former officer of the company as CEO, creating a barrier to Kalanick ever returning to a leadership position, the person said.
Outside the boardroom, a judge overseeing a lawsuit brought by Waymo has ordered Uber to explain by Monday morning why it waited until last week to reveal 15,000 emails and numerous documents held by engineer Anthony Levandowski. Waymo says Levandowski stole its trade secrets while he worked there before leaving to direct Uber’s driverless car program.