Uber will proceed with SoftBank deal, limit Kalanick's power

Uber will proceed with SoftBank deal, limit Kalanick's power

"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", Uber said in an emailed statement.

The board's decisions mean that Uber, valued at almost $70 billion and closely watched by other start-ups, may have defused - at least temporarily - another fractious situation.

Like many private tech companies, Uber has issued so-called "super voting" shares which grant extra voting power to founders, investors and early employees. Benchmark led a board revolt to oust Kalanick as chief executive officer, and directors are divided about what role Kalanick now should play.

Former CEO Travis Kalanick resigned his position in June following an exodus of top executives and allegations that managers didn't adequately address reports of sexual harassment. Kalanick and early investors like Benchmark have outsize voting power, which is expected to be diminished as part of the deal.

Kalanick also cheered Tuesday's board vote, despite its intention to curtail some of his power.

The final proposal seemed certain to retain one key provision: moving the company toward one share, one vote.




The first proposal would cut the number of board seats controlled by Kalanick to one from three, increase seats effectively controlled by Khosrowshahi to five from one and eliminate supervoting rights, which give early shareholders multiple votes per share, two of the sources said.

Meanwhile, the US-based company also confirmed its board had approved plans to hold an initial public offering in 2019, suggesting the company's hierarchy had recovered some degree of unity after being plagued by scandal in recent months. Benchmark, which wants Kalanick off the board, alleges that he "fraudulently" obtained the power in 2016 to name three additional members to the company's board of directors. It will make the board more than twice as large as the average private company and bigger than most public firms, according to the National Association of Corporate Directors, a trade group.

Last week, Khosrowshahi and Goldman Sachs (an Uber investor) brought the board a proposal.

The talks happened as Uber faces the departure of its London boss and pressure in the United States over former CEO Travis Kalanick's influence over the company after he appointed two new board members with little notice.

In a statement emailed to The Mercury News organization by his spokesman, Kalanick wrote it was important to appoint the new board members when he did.

Travis Kalanick, Uber co-founder and CEO and Michael Arrington TechCrunch founder (not shown) talk during a fireside chat at TechCrunch Disrupt SF on Monday, September 8, 2014 in San Francisco, Calif.

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