Uber board reshapes firm's power structure

SAN FRANCISCO • Uber Technologies' fractured board declared peace on Tuesday, attempting to put months of strife behind it by unanimously passing a series of measures to shore up corporate governance, bring in major investor SoftBank and diminish the power of founder and former chief executive Travis Kalanick.

The 11-person board voted unanimously to approve sweeping changes to the company's power structure. The plan would expand the size of the board to 17 seats, people familiar with the matter said.

The unusually large board would accommodate two spots for SoftBank representatives and more independent voices.

Uber will also adopt a policy of one share, one vote, the people said.

Mr Kalanick and venture capital firm Benchmark were among those with outsized voting powers before the latest changes.

The board also set a deadline for the company to go public in the next two years, the people said.

If it does not, Uber will lift some restrictions on shareholders from selling their stakes.

The agreement could shore up Uber's reputation after a series of scandals and a legal battle between Mr Kalanick and an Uber investor group led by Benchmark Capital.

The deal could be subject to a lawsuit and is contingent on the multi-billion-dollar investment by Japan's SoftBank Group closing in the coming weeks.

The terms preserve Uber's US$69 billion (S$93.8 billion) valuation, highest among the world's venture-backed start-ups, as SoftBank and others invest about US$10 billion.

"SoftBank's interest is an incredible vote of confidence in Uber's business and long-term potential," the board said in a statement.

Benchmark's general partner Bill Gurley, who was replaced by a colleague on Uber's board in June, said: "It was a good day for Uber, a good day for Uber's employees, and good day for Uber's new CEO."

Mr Kalanick described Tuesday's actions as "a major step forward in Uber's journey to becoming a world-class public company".

However, early Uber investors Shervin Pishevar and Steve Russell said in a statement after Tuesday's vote that they would sue to block the change, which cuts the super-voting rights that give them 10 votes per share.

If successful, such a lawsuit could threaten the other terms of the boardroom compromise.

"Today's action by the board was the culmination of a blatant bait and switch, essentially robbing loyal employees, including the more than 200 early founding Uber employees and advisers, of their hard-earned shareholder rights," said Mr Pishevar and Mr Russell.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 05, 2017, with the headline 'Uber board reshapes firm's power structure'. Print Edition | Subscribe