Uber Shareholders Ask Benchmark to Leave Board After Filing Suit Against Ex-CEO Kalanick
A boardroom fight is brewing.
Instability at the world's largest ride-sharing company continues. Uber shareholders are reportedly asking investment firm Benchmark to step away from the company's board, after the investment firm filed a lawsuit against former Uber CEO Travis Kalanick.
Benchmark is accusing Kalanick, who stepped down as CEO but maintains a seat on Uber's board of fraud, of trying to pack the board with allies. But in an email obtained by Axios, a group of shareholders criticized Benchmark's role in Kalanick's dismissal, and the subsequent lawsuit.
In the email, shareholders claimed Benchmark's move against Kalanick will only worsen Uber's public image, hurting shareholder value. The shareholders asked Benchmark to divest enough of its Uber shares in order to lose board appointment rights.
Benchmark's lawsuit against Kalanick appears aimed at removing him from the board, ensuring he can't engineer a return as CEO. The accusations against Kalanick seem to center around a June 2016 decision that expanded Uber's board from eight members to 11, and gave Kalanick the right to appoint people to those new seats. An anonymous Uber investor told TechCrunch that Benchmark should never have allowed Kalanick to gain control of those additional seats in the first place, calling it a "shocking" mistake. The investor said the move was not good for shareholders, but believed Benchmark was letting Kalanick do whatever he wanted at the time because it viewed him as the next Mark Zuckerberg.
That doesn't seem to be a view Benchmark holds now. Its lawsuit accuses Kalanick of being "selfish" and of packing the Uber board with "loyal allies." Benchmark believes Uber will be worth $100 billion in a few years, but also believes Kalanick is a threat to that future. Benchmark may not easily give up its stake a company it values so highly.
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