The Uber Board has decided to revise the power structure in the company, chopping off some of the powers of early investors, including former CEO Travis Kalanick. The revised power structure makes corporate governance changes, giving every shareholder one vote per share of the stock they own, irrespective of the class. The board members also agree to the investment from the Japanese telecom major SoftBank.
Despite some differences before, the board members arrived at a unanimous decision, notes NBC News. The Uber board was comprised of two new board members – former Xerox Chief Executive Ursula Burns and former Merrill Lynch Chief Executive John Thain.
On Tuesday, the Uber board released a statement, saying, “Today, after welcoming its new directors Ursula Burns and John Thain, the Board voted unanimously to move forward with the proposed investment by SoftBank and with governance changes that would strengthen its independence and ensure equality among all shareholders.” The board stated that Softbank’s interest in Uber’s business potential is a big confidence booster for the company, and the investment would be finalized in the coming weeks.
Softbank is looking to siphon $1 billion and $1.25 billion into Uber. Thereafter, the Japanese group would put an open offer to buy 14% to 17% of outstanding shares from the large investors at a discounted price, says Reuters, citing sources aware of the matter. Further, there are reports that the board has also set a target of 2019 for Uber’s IPO, and increase the seats from 11 to 17 with two members going to SoftBank and the other four would be independent.
In an email to Reuters, Benchmark General Partner Bill Gurley, who was replaced by a colleague on the Uber board, said it was a good day for Uber, its employees and the new CEO. Former CEO Kalanick also praised the decision taken by the Uber board stating that it is a major step by the board towards ensuring a smooth journey of Uber to become a world-class public company.
Kalanick also stated that the changes made should benefit Uber under Khosrowshahi, who has taken up the responsibility as CEO just a month ago after leaving the same post at Expedia. However, things now would not be easy for Kalanick, who earlier could have become the CEO of the company again with ease. The board also approved a proposal, which needs two-thirds of the board to approve a new CEO appointment.
Kalanick resigned under pressure after Uber got meddled in sexual harassment charges, a trade secret misappropriations lawsuit filed by Waymo, and then Uber’s effort to interfere with the government probes.
Uber has been desperate to show that they have buried the past and are ready to move forward. On August 30, Uber board member Arianna Huffington posted a picture of smiling employees on her Twitter account. The picture was worth noticing because Uber’s ex-CEO Kalanick and the one who replaced him – Dara Khosrowshahi, were standing side by side for the frame, notes Buzzfeed.
However, a month later after that photo, Kalanick surprisingly appointed two new board members as soon as the current CEO Khosrowshahi proposed stripping the early shareholders of their powers, notes Buzzfeed. With the board going ahead and actually axing the powers and changing the power structure in the company, the intentions of Khosrowshahi are clear over how he wants to rescue the sinking ship.