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Uber ex-CEO Kalanick taps new board members amid power struggle

In response to a proposal to alter shareholder voting rights, Travis Kalanick appoints two new board members without consulting Uber or the rest of the board.

Former Uber CEO Travis Kalanick
Former Uber CEO Travis Kalanick filled two board seats "in light of a recent board proposal to dramatically restructure the board and significantly alter the company's voting rights."
James Martin/CNET

The drama at Uber continued this week, as former CEO Travis Kalanick appointed two board members without consulting the rest of the board or the company.

Kalanick said late Friday that he had tapped ex-Xerox CEO Ursula Burns and ex-Merrill Lynch head John Thain to join Uber's board, Bloomberg reported.

The move comes as Kalanick faces a lawsuit from one of Uber's early investors that alleges the former CEO misled Uber's stockholders to gain control of three board seats. It also comes amid reports that Uber's board could soon vote on proposals to restructure voting rights for shareholders, including Kalanick.

"I am appointing these seats now in light of a recent board proposal to dramatically restructure the board and significantly alter the company's voting rights," Kalanick said in an emailed statement. "It is therefore essential that the full board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John."

Uber said it wasn't consulted.

"The appointments of Ms. Burns and Mr. Thain to Uber's board of directors came as a complete surprise to Uber and its board," the company said via email. "That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of."

Last month, major Uber investor Benchmark Capital sued Kalanick for fraud, alleging that Kalanick failed to disclose to the board "gross mismanagement," including "pervasive gender discrimination and sexual harassment."

"Kalanick's overarching objective is to pack Uber's Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO," read the complaint, which has been moved to private arbitration.

Kalanick has called the lawsuit a "personal attack" and said Benchmark pressured him into resigning in June.

Benchmark has blamed Kalanick for a slew of scandals that have rocked the startup, including sexual harassment allegations that resulted in more than 20 Uber employees being fired. In late August, Expedia CEO Dara Khosrowshah was chosen as Uber's CEO, a role that had been vacant since Kalanick was forced out.

On Thursday, Uber and another investor pitched a proposal to the company's board that would cut Kalanick's voting power at Uber, The New York Times reported, saying the proposal could be voted on as early as Tuesday. Benchmark has also proposed a new voting structure, according to The Wall Street Journal.

Benchmark didn't respond to a request for comment.

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