This week Uber appointed Expedia boss Dara Khosrowshahi as new CEO.
The appointment of Mr Khosrowshahi could cost Uber $160m to match unvested options previously earned in Expedia.
The new CEO was chosen among a list including Meg Whitman, former CEO of HP, and Jeff Immelt, former CEO of GE.
I do not find scandalous that Uber pay $160m to get the services of the former CEO of Expedia but I find it scandalous that Uber do not have any internal succession plan or any internal candidate considered for the top job.
Let me explain.
Under Mr Khosrowshahi siege Expedia shares price grow by 800% and the company was able to increase market share in the competitive online travel market.
Mr Khosrowshahi was appointed CEO in 2005, when Expedia shares traded at $20; today Expedia trade at $150 per share.
Lets talk about internal succession. Uber is a company valued over $60bn and in 2017 will generated around $10bn of Revenues.
From a company with $10bn revenues it is fair to expected a strong succession plan and to create a talented pool of Senior Manager to potentially be considered for the top job.
While I have huge admiration for Travis Kalanick for how he disrupt an inefficient market (the traditional taxi industry), I do think that he did a poor job as a talent management and probably the Board of Uber was right in firing him.
In the valuation of a potential investment I always ask myself if the Founder can be CEO in 5 year’s time when the company need management talent to continue to grow.
While I am more incentivised to invest in a company lead by a Founder with management talent I am starting to think that it is probably more important to have a Founder able to create an internal management team potentially capable to take him over once the company enter in a new stage of growth.