Uber shareholders get closer to passing lobbying disclosure proposal
Uber shareholders voted against a proposal that would have required the ride-hailing company to fully disclose its direct and indirect lobbying activities and expenditures, according to a regulatory filing released Thursday.
The measure has been proposed and rejected by shareholders before. But this year's results show a growing number of shareholders are keen to require full disclosure. About 45% of shareholders voted in favor of the measure as opposed to around 30% last year. Two-thirds of shareholders need to vote in favor for a proposal to be approved.
The uptick in votes in favor signals a win for advocates in what will surely be a years-long process to encourage companies like Uber to be more forthcoming in their spending.
The proposal, submitted by the International Brotherhood of Teamsters, argues that Uber's lack of full disclosure around its lobbying activities represents multiple risks for the company. The most obvious one is the potential reputational risk to the company if it's revealed that it backs a cause considered unsavory by its users.
The real risk, argues Teamster senior government analyst Michael Pryce-Jones, is to the sustainability of the business itself.
“How much do you have to lobby to grow your markets or defend your markets? Because that goes to the resilience of how you’re earning money,” Pryce-Jones previously told TechCrunch.
The vote comes as Uber, along with other app-based gig companies, continues to lobby hard and support so-called grassroots organizations dedicated to independent worker rights in order to keep gig workers classified as contractors, rather than employees. Uber's business model depends on not paying drivers and delivery workers as employees, which includes benefits like minimum wage and sick leave, as well as protections like workers' compensation.
Most infamously, Uber contributed around $30 million to a campaign (that ended up raising more than $200 million) in California to pass Proposition 22. The company is actively working to pass similar laws in other states around the country, like Massachusetts, Colorado, Illinois, New Jersey, New York and Washington.
Three other proposals were submitted and approved Monday, all with recommendations from the board to vote in favor. The first is a proposal to elect 11 directors to serve until the 2023 annual meeting and until their successors are elected. The directors selected are currently serving on Uber's board.
Uber's shareholders also voted to approve, on a non-binding advisory basis, the 2021 compensation of Uber's named executive officers. CEO Dara Khosrowshahi's target compensation broke down into 6% in salary, 12% in cash bonus and 82% in long-term equity. In practical terms, that comes out to $1 million in salary, $16 million in stock awards, $2.4 million in non-equity incentive plan compensation (which is essentially just a bonus) and $507,738 in other compensation (mainly for security and personal safety costs), totaling a whopping $20 million in 2021 CEO compensation.
For other executives, the breakdown was 9% salary, 9% cash bonus and 82% long-term equity. Here's a breakdown of total compensation for the executives:
Nelson Chai, chief financial officer: $6.8 million.
Jill Hazelbaker, SVP of marketing and public affairs: $7.9 million.
Tony West, SVP, chief legal officer and corporate secretary: $7.4 million.
Nikki Krishnamurthy, SVP and chief people officer: $10.7 million.
Uber has a philosophy for how it compensates executives that backs its objectives to attract and retain talent, align executive incentives with company performance, provide further financial incentives for reaching certain milestones and "reinforcing cultural norms," whatever that means.
Here's a sliver of Uber's compensation philosophy, pulled from a regulatory filing:
In order to promote long-term stockholder value creation and link the compensation of our executive officers to these long-term strategic goals and key drivers of our business, the primary focus of our compensation philosophy and program is on the long-term elements of target total compensation.
Finally, Uber's shareholders voted to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered accounting firm for 2022. Nothing surprising there, as PwC served as Uber's accounting firm for the last two financial years, as well.