Uber's former CEO has appointed two new directors to the board, escalating a battle with a major investor
Kalanick made the announcement via a statement on Friday evening. These appointments seem to be a direct challenge to Benchmark Capital, the Uber investor that's suing Kalanick personally for fraud.
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. The seats have been empty, until now.
In his statement, 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."
In other words, Kalanick is saying that if Benchmark (or anybody else) wants to change how the Uber Board of Directors is run, then every seat on the board needs to be filled before it can move forward. And, under the current rules, he's allowed to fill those seats with his hand-picked choices.
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.
An Uber spokesperson did not immediately respond to a request for comment.
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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