Uber shareholders voted against a proposal that would have required the ride-sharing company to fully disclose its direct and indirect lobbying activities and expenses, according to a regulatory filing released Thursday.
The move has been proposed and rejected by shareholders before. But this year’s results show that a growing number of shareholders are willing to demand full disclosure. About 45% of shareholders voted in favor of the measure compared to 30% last year. Two-thirds of shareholders must vote in favor for a proposal to pass.
The surge in yes votes signals a victory for advocates in what is sure to be a years-long process to encourage companies like Uber to be more forthcoming about their spending.
The proposal, put forward by the International Brotherhood of Teamsters, argues that Uber’s failure to fully disclose its lobbying activities poses multiple risks to the company. The most obvious is the potential risk to the company’s reputation if it is revealed that it supports a cause that its users find distasteful.
The real risk, argues Michael Pryce-Jones, Teamster’s senior governance analyst, 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’s because of the resiliency of how you’re making money,” Pryce-Jones previously told TechCrunch.
The vote comes as Uber, along with other app-based temp companies, continues to lobby and support so-called freelance rights grassroots organizations to keep temp workers classified as contractors, rather than workers. employees. Uber’s business model hinges on not paying drivers and delivering 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 the campaign in California to pass Proposition 22 which ended up reaching more than $200 million. The company is actively working to pass similar laws in other states across the country, including Massachusetts, Colorado, Illinois, New Jersey, New York and Washington.
Three other proposals were presented and approved on Monday, all with recommendations from the board to vote in favor. The first is a proposal to elect 11 directors to serve through the 2023 annual meeting and until their successors are elected. The selected directors currently sit on Uber’s board of directors.
Uber 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 was split into 6% salary, 12% cash bonuses and 82% long-term equity. In practical terms, that equates to $1 million in salary, $16 million in stock awards, $2.4 million in non-stock incentive plan compensation (which is essentially just a bonus), and $507,738 in other compensation (mostly for security and personal protection costs), totaling a whopping $20 million in CEO compensation in 2021.
For other executives, the breakdown was 9% salary, 9% cash bonus and 82% long-term equity. Here is a breakdown of total executive compensation:
- Nelson Chai, CEO: $6.8 million
- Jill Hazelbaker, senior vice president of marketing and public affairs: $7.9 million
- Tony West, Senior Vice President, General Counsel and Corporate Secretary: $7.4 million
- Nikki Krishnamurthy, Senior Vice President and Chief People Officer: $10.7 million
Uber has a philosophy about how it compensates executives that supports its goals of attracting and retaining talent, aligning executive incentives with company performance, providing more financial incentives for reaching certain milestones, and “reinforcing cultural norms,” you name it. what that means.
Here’s a small part of Uber’s compensation philosophy, excerpted from a regulatory filing:
“In order to promote the creation of long-term value for shareholders and link the compensation of our executive officers with these long-term strategic objectives and key drivers of our business, the main focus of our philosophy and compensation program is on long-term elements of total compensation objective.”
Ultimately, Uber shareholders voted to ratify the appointment of PricewaterhouseCoopers LLP as the company’s independent registered accounting firm for 2022. Not surprising, as PwC also served as Uber’s accounting firm for the last two financial years.