Uber offered the role of CEO to current Expedia CEO Dara Khosrowshahi, and he formally accepted on Aug. 30.
What will change if Khosrowshahi is the Uber CEO?
Khosrowshahi reportedly intends to focus on the business side of Uber. He told employees in San Francisco that Uber will focus on “paying the bills.” It will also work to make up the ground it has lost to Lyft, its main competitor.
Many expect Khosrowshahi to guide Uber into being a publicly traded company in the next year and a half to three years. Currently, Uber is the most valuable private company in the world. Its value sits at $68.5 million. However, moving toward being public would force Uber to be more accountable. Such a move could help restore public trust after the recent scandal surrounding the company.
Business finance experts speculate that Khosrowshahi may continue work on self-driving technology. They also question whether he will work toward acquiring other transportation companies. While acquisitions could come with greater opportunity to drivers, self-driving technology is a constant worry for gig economy workers.
Potential challenges for the new CEO
Aside from the cloud of lawsuits, harassment charges, and other issues surrounding Uber, Khosrowshahi will have to deal with former Uber CEO and founder Travis Kalanick. Kalanick stepped down from Uber earlier this year in response to massive public pressure. However, he has remained on the board and owns around ten percent of Uber’s stock.
The media shows Kalanick as brash and argumentative, while Khosrowshahi has a more diplomatic reputation Whether or not personality differences will help or hurt the two men as they work together, Khosrowshahi will have to navigate carefully.
Khosrowshahi’s experience
The public wasn’t aware during the deliberation process that the board was seriously considering Khosrowshahi for the new Uber CEO. However, his experience certainly checks off a lot of boxes for Uber. He led Expedia through a period of massive growth, similar to what Uber has experienced. Expedia is also a public company, a goal Uber has not yet met.
He also has experience working with a very “assertive” board of directors, says Tech Insider. He’s also worked with government regulations and in a market of highly successful competitors.
Salary under speculation
Official numbers on the new Uber CEO’s salary have yet to be released. However, the speculation is that his new position carries a hefty price tag.
Bloomberg data reveals that Khosrowshahi, who has been with Expedia for the last dozen years, holds $184.4 million in unvested stock in the company. In 2015, he was one of the highest paid businessmen in the nation with a $95 million salary.
What does that mean for Uber? It means getting Khosrowshahi on board may have cost them in the vicinity of $200 million. Like other major companies, they probably offered “replacement awards.” Such awards compensate executives for leaving behind unvested (they can’t take it with them) assets.
Uber will likely give Khosrowshahi stock of its own, which will be vested over the next several years. Not vesting the stock right away provides incentive for CEOs to remain with the company for an extended period of time. It also directly motivates the CEO to steer the company in a direction that would push stock values up, not down.
