Uber Voting Change Proposal Could Face More Hurdles

Note: Numbers are estimates. Sources: Company Charter. Legal Filings, The Information research

Uber’s board is expected to consider a proposal to eliminate supervoting shares at its meeting Tuesday, a highly unusual move that is aimed at drastically shrinking the voting power of ex-CEO Travis Kalanick and early investor Benchmark Capital. But such a rearrangement can’t simply be done with a board vote.

Several groups of early investors that hold supervoting shares, which carry 10 times as many votes per share as other shareholders, have to approve it. That includes investors such as Benchmark and Menlo Ventures as well as Mr. Kalanick, co-founder Garrett Camp and Ryan Graves, the company’s first CEO. And based on Uber’s charter and Delaware law, these investors have to approve it by a majority vote of each group of shares, adding a further complication, lawyers say. It’s not clear how widely these shareholder groups have been canvassed.

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Our estimates of ownership and voting percentages were based on the company charter and legal filings in Benchmark’s lawsuit against Mr. Kalanick. We assumed the full conversion of Class A common stock awards, as it’s unclear how many outstanding Class A shares are included in the fully diluted valuation.

—Amir Efrati contributed to this report

Terrence Yang and Jordan Elpern-Waxman commented on this article.
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“I think that could make it a little more difficult to have investors get comfortable in the future with supervoting.”