Although former Uber Technologies Inc. CEO, Travis Kalanick, was pressured to resign from his position, he still held a chair on the board. The massive amount of scandals and lawsuits made investors very concerned and called for Kalanick to step down. Even though Kalanick stepped down as CEO, he still held power within the company.
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. Current Uber CEO, Dara Khosrowshahi, express his thoughts saying that Kalanick’s move. According to the Recode, who obtained the email first, Khosrowshahi sent an email saying that it was a “surprise” and saying that “anyone would say that this is highly unusual.”
“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 a statement emailed to Bloomberg. “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.”
The surprise move by Kalanick resulted in several reforms to be drafted by Uber and Goldman Sachs Group Inc., people familiar with the matter said. The board met on Thursday and planned to discuss and vote on Tuesday.
The proposals presented were to reduce power of certain board members, especially with Kalanick.
One proposal was that one share is equivalent to one vote, meaning that some members of the board would have less power. Another one was to take off one of Kalanick’s three board seats and give it to SoftBank Group Corp. The last one was that if a former officer of the company was going to be appointed as CEO, it would require two-thirds of the board’s vote, according to Bloomberg.
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.
Most of the proposals drafted at the meeting require majority vote of the board in order to pass an executive decision. This will limit directors from exercising their power irresponsibly.
“Just know that the most important work here is the hard work you're doing on behalf of our Company. Keep focused, keep together, and keep going.” said Khosrowshahi.