Economy

Uber board to consider vote to cut Kalanick influence

Uber board to consider vote to cut Kalanick influence”

Late on Friday, Sept. 29th, Uber's CEO Dara Khosrowshahi and other high-ranking execs suddenly found themselves in a quandary over how the former chief executive Travis Kalanick appointed two new directors without telling anyone.

The board, now expanded to 11 members, is preparing to vote on a series of measures to change the company's corporate governance and whether to accept a $10 billion stock sale to Japanese conglomerate SoftBank. They highlight the part of the proposal created to limit its former CEO's decision-making power by stating that anyone who has been an officer at the company can only return to the role if they get two-thirds board approval and 66.7 percent center of shareholder approval. The outcome of the sale is uncertain due to due to stipulations from early Uber investors who claim they won't sell to Softbank if Uber's structure of governing remains unchanged and insists that it bars Kalanick from returning as chief executive.

Kalanick's resignation came after months of controversies including sexual harassment in the workplace, trade secret theft allegations, a federal investigation and even a video of the former CEO berating an Uber driver.

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. Directors are divided about what role Kalanick should play and whether he should retain control over a large part of the board. To ensure that the public offering happens at that time, there is a provision that if more than one third, but less than one half, of the board wants an I.P.O., they can add directors until they have the control over the board they need to make the public offering happen. That suit was sent into private arbitration and the sides are in the process of selecting an arbitrator.

■ According to the proposal, if the Uber board seats now held by three directors - Ryan Graves, Arianna Huffington or Wan Ling Martello - are vacated, Mr. Khosrowshahi gains the power to nominate directors for those spots.

Among the issues up for debate, according to a September 30 report in the New York Times, are moving toward a one-share, one-vote system by removing rights attached to Class B and preferred shares and pushing the company toward a 2019 initial public offering by appointing more directors to the board if more than one-third, but less than half, are in favor of going public.

An initiative that would require a former employee (e.g., Kalanick) to get a two-thirds vote from the board and shareholders to be named CEO. Venture capitalist Shervin Pishevar, investor Stephen Russell and other shareholders threatened Monday to sue directors who voted for the plan, including Kalanick. But under the proposal, that would change to one vote per share.

■ The plan does allow Mr. Kalanick to keep his board seat, subject to the approval of Mr. Khosrowshahi.



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