Point for ousted Uber CEO Travis Kalanick: Under the current voting agreement, Uber is obligated to seat two directors, former Xerox CEO Ursula Burns and former Merrill Lynch CEO John Thain. He appointed both yesterday to its board.
While that agreement is part of litigation (now in private arbitration) that one of the car-hailing company’s biggest investors, Benchmark, is waging against him, only a successful attempt by the venture firm to stay the action will stop them from joining at a planned Tuesday board meeting.
One oddity: Neither has met officially with current CEO Dara Khosrowshahi, which is not the way this stuff is usually done. Sources said Kalanick considered a small number of candidates recently before settling on Thain and Burns.
(Why Burns and Thain accepted an invite to join this ongoing reality show that rivals the Kardashians, I have no clue.)
What’s also not clear is whether the two can vote on a proposal to change governance that Kalanick is opposing, which is what set this current chapter of the ongoing drama aflame again.
Basically, the proposal — which has been pushed by Khosrowshahi and was presented to the board by Goldman Sachs earlier this week — would drastically limit Kalanick’s voting power and ability to return to leadership at Uber, along with some other changes.
Obviously, Kalanick is not happy with that and sources said he is claiming it is “not good governance.” (Ironic, I know, considering his rocky tenure at Uber.)
Thus, Uber is once again plunged into civil war, this time pitting the old CEO against the new one. Much of the board is backing Khosrowshahi, although sources on Kalanick’s side said that some might be secretly happy about his efforts. (Insert blah, blah, blah, “Game of Thrones” metaphor, blah, blah blah here.)
One former Uber exec and board observer David Plouffe — you know, the guy who was key to electing President Barack Obama — thinks not in an unprecedented tweet last night:
Thinking of my former colleagues at @Uber tonight. The Trump WH seems sane by comparison. Confident Dara will find a way forward.
— David Plouffe (@davidplouffe) September 30, 2017
One happy thought: All sources said that no one is necessarily against the qualifications of the two directors, who are well-regarded and experienced public company CEOs. Burns, in fact, had been on Uber’s board candidate list already.
“No one opposes them,” said one source, who had thought that Kalanick had finally calmed down about his ouster. “It’s the way Travis is doing this that is the problem.”
As of now, Burns and Thain have not been formally appointed, which will come after Uber co-founder and director Garrett Camp signs something. That presumably will take place before or at the board meeting Tuesday.
Whether they can then vote or not on the governance proposals up next week is unclear and also it is unclear if they have been able to read the Holder report as yet, which chronicles some pretty dicey management practices under Kalanick. (Insert blah, blah, blah, “It” and evil Pennywise clown metaphor, blah blah, blah here.)
Interesting link: One clue as to how Burns became involved here is that she is now a senior adviser to Teneo, the firm which is representing Kalanick too in his communications and public strategy.
With mechanical engineering degrees from Polytechnic Institute of New York University and Columbia, Burns is also one of tech few women and African-American CEOs — Stacey Brown-Philpot of now-sold-to-Ikea TaskRabbit is another. She held the top jobs as chairman and CEO at Xerox until recently, joining the company as an intern in 1980. She is credited with transforming it from a copier company to a more diversified business and led its splitting into two parts in 2016.
Burns is also an active board member, serving as director of American Express, Exxon Mobil and Nestlé (where Uber director Wan Ling Martello works).
The financial muckety-muck Thain is not affiliated with Teneo, so it is not clear how he and Kalanick got acquainted, but have apparently known each other for some time.
While a legendary figure on Wall Street, he still carries some controversy around his time at Merrill, including a high decorating bill for his office then. He definitely recovered after that, and was lauded for his work at CIT.
Basic resume: Thain rose quickly with fancy degrees from M.I.T. and Harvard, with stints as president of Goldman Sachs, CEO of the New York Stock Exchange, where he was credited as the person who pushed into digital there. He then went onto Merrill Lynch in 2007as CEO and soon landed right in the middle of the financial meltdown over those nasty mortgage-backed securities.
As all hell was breaking loose, Thain struck the $50 million deal to sell Merrill to Bank of America in the fall of 2008, but was ousted after a huge loss was unveiled and then controversies over big bonuses and a $1 million office renovation with a very pricey wastebasket.
Trashy, yes. Still, he managed to restore some luster as CEO of CIT and retired in 2015.
And so it goes at Uber. More to come, natch.