Uber cofounder Travis Kalanick appointed Xerox chairwoman Ursula Burns and former Merrill Lynch CEO John Thain to the company’s board of directors on Friday, a surprise move that’s almost certain to re-ignite the bitter internal fighting that has destabilized the ride-hailing giant for months.
Uber quickly decried the move as “a complete surprise” to both the company and its board.
“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,” an Uber spokesman told Business Insider.
The appointments come a few months after Kalanick resigned under pressure from the CEO job at Uber. And the move signals that the hard-charging entrepreneur, who remains on Uber’s board, does not intend to fade away from the company he turned into a $ 69 billion juggernaut built largely in his image.
Uber hired Dara Khosrowshahi, the former CEO of Expedia, to replace Kalanick in August as the ride-hailing company tries to move past months of scandals and controversies that have caused an exodus of talent and, by some accounts, put a dent in its hefty private market valuation.
Uber is reportedly in negotiations for a massive $ 10 billion investment deal with Japan’s Softbank, and Benchmark Capital, one of Uber’s largest investors that helped pushed Kalanick out, has sought to structure the deal in a way that ensure the former CEO cannot return to power.
In his statement to Business Insider, Kalanick drops a strong hint that these appointments are a direct refutation of Benchmark’s demands.
“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 writes. “It is therefore essential that the full Board be in place for proper deliberation to occur, especially with experienced board members as Ursula and John.”
Disputed seats
ReutersThe appointments of Burns and Thain fill two board seats controlled by Kalanick, which have sat vacant until now. Kalanick’s control over the two seats has been challenged by one of Uber’s largest investors, Benchmark Capital.
Kalanick’s announcement, late on Friday, that he was filling the two seats appears to be a direct challenge to Benchmark, which has sued Kalanick for fraud and is attempting to wrest the board seats from his control.
At the core of the Benchmark lawsuit are two seats on the board that Kalanick fully controls — meaning he can appoint whoever he wants to fill them. Benchmark alleges that Kalanick promised to relinquishh those seats to independent directors after he resigned in June, but never followed through.
Kalanick already has a rough reputation in the court of public opinion after Uber was rocked with so many scandals under his leadership that investors, led by Benchmark, forced him to resign from the CEO role in June. Those scandals also led to the exodus of many other top Uber execs.
Kalanick still owns about 10% of the company, including so-called “super-voting shares” that give him about 16% of the voting rights of Uber. Meanwhile, new Uber CEO Dara Khosrowshahi has been working hard to repair the company’s reputation amid all this drama.
Here’s Kalanick’s full statement:
I am happy to announce that Ursula Burns and John Thain have agreed to join Uber’s Board of Directors. Until earlier this year, Ursula was Chairman and CEO of Xerox, while John was formerly CEO of CIT Group, Merrill Lynch, and NYSE. Ursula and John are two highly accomplished corporate leaders with extensive board experience.
Their backgrounds include successfully leading large public companies as chief executives and chairs, navigating dynamic, technology-powered and regulated industries, and guiding tens of thousands of employees around the world. Both Ursula and John have engineering degrees and are incredibly talented and proven problem solvers. There is no doubt the Board will be well-served by their valuable insights, counsel and independent perspective as Uber moves into the next phase of growth and prepares for a public offering. I am grateful for their enthusiastic support of Uber.
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. 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, Uber will be well situated to focus on the future and continue to revolutionize how cities move.
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