Uber board votes in favour of SoftBank deal, governance changes

06 October, 2017, 00:40 | Author: Lester Mason
  • Jo Bertram said that she had decided it was time to move on “to something new and exciting”

Uber Technologies Inc.'s board has approved a series of corporate reforms along with a multibillion investment from SoftBank Group Inc. that are created to strengthen the ride-hailing company's governance while at the same time strip power from former Chief Executive Travis Kalanick. With that out of the way, the SoftBank investment is officially going forward. In practice, this means putting a limit on Kalanick's influence over the company. The board set a deadline for an IPO of autumn 2019, the sources said.

Last week, Kalanick used his right to fill two vacant board seats, appointing former Xerox CEO Ursula Burns and former Merrill Lynch CEO John Thain.

Kalanick's move was a finger in the eye of major Uber investor Benchmark Capital, which earlier filed a civil lawsuit accusing him of fraud, breach of contract and of plotting to manipulate the board of directors to allow him to return as CEO. The same brashness that convinced hundreds of municipal governments to accept Uber as an alternative to taxis also led the company to face a lawsuit over alleged IP theft, a criminal probe over alleged privacy violations, and a public backlash for a culture that reportedly enabled sexual harassment.

The board meeting comes as Uber's new chief executive met with a London transport official, trying to persuade the city to reverse a decision to not renew Uber's license.

"Further steps in this process will take place over the coming weeks".

The governance proposal, written with the help of Goldman Sachs Group Inc., would shift Uber shareholders to one share, one vote.

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On Tuesday, Uber's board agreed to remove the special voting power carried by two categories of Uber stock, the class B common shares and the preferred shares.

However, an expected move that did not happen was that the board of directors did not approve making changes that would formally prevent former Uber CEO Travis Kalanick from regaining control of the company. "We approved moving forward with the SoftBank transaction and reached unanimous agreement on a new governance framework that will serve Uber well".

"SoftBank's interest is an incredible vote of confidence in Uber's business and long-term potential, and we look forward to finalizing the investment in the coming weeks", Uber said in a statement late on Tuesday night (3 October).

Not everyone was happy with today's results.

Obviously, most of these new proposals would limit Kalanick's power on the board, which could explain why he chose to appoint members to the empty board seats he controls without any warning. "Under [new CEO Dara Khosrowshahi's] leadership and with strong guidance from the Board, we should expect great things ahead for Uber". Following the disclosure of an internal report that Uber was aware of potentially questionable decisions from former Waymo engineer Anthony Levandowski prior to purchasing his startup, a judge ruled that the trial would be delayed from its original start date of October 10 to December 4. "We want to work with London to make things right".

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