Travis Kalanick Appoints 2 Directors Without Consulting Board

Travis Kalanick, the former chief executive of Uber, is a member of the board and has been embroiled in a fight with other directors.
Will Oliver/European Pressphoto Agency

The divisions between Uber and its former chief executive, Travis Kalanick, are widening.

For the past few weeks, Mr. Kalanick, who had resigned as chief executive in June, kept a low profile. Last month, Uber installed a new chief executive, Dara Khosrowshahi, and the company appeared to be trying to get past a turbulent period that included questions about its culture and changes in its top echelons.

But behind the scenes, Mr. Kalanick and Uber’s board continued to wrestle over who had control of the privately held company through the amount of stock they owned and the voting rights that those shares conferred.

On Thursday, Uber and one of its investors, Goldman Sachs, made a proposal to the board that would reduce Mr. Kalanick’s voting power at the company, according to people briefed on the negotiations, who asked to remain anonymous because they were not authorized to speak publicly. The board could vote on the proposal as early as Tuesday, these people said.

In response, Mr. Kalanick made a move late Friday to reassert his control. The former chief, who holds outsize voting rights at Uber, said he had added Ursula Burns, a former chief executive of Xerox, and John Thain, a former chief executive of Merrill Lynch and the New York Stock Exchange, to the eight-member board.

Because of the proposal to reduce voting rights, it is “essential that the full board be in place for proper deliberation to occur,” Mr. Kalanick said in a statement.

In its own statement, Uber said Mr. Kalanick’s move “came as a complete surprise to Uber and its board.” That is why, it added, the company is “working to put in place world-class governance.”

The moves underscore the increasingly dysfunctional relationship between Uber and Mr. Kalanick, the company’s co-founder. Mr. Kalanick stepped down as chief executive after some of Uber’s investors said he could not remain. Since then, the former chief, who holds a seat on Uber’s board, has battled with other board members, including Benchmark, a venture capital firm that was an early investor in the company.

Benchmark had previously contended that Mr. Kalanick had too much power over Uber and had sued him in an attempt to reduce that control. That suit has been moved to arbitration, allowing Mr. Kalanick to keep his fight with Benchmark — and any potentially damaging disclosures — out of public view. Benchmark declined to comment on Friday.

Click here to read more.

SOURCE: NY Times, Katie Benner and Mike Isaac