What Does the Surprise Selection of Expedia’s Dara Khosrowshahi as CEO Mean for Uber?

You could have gotten whiplash from watching Uber’s CEO selection ping pong today. First former supposed lead horse, ex GE CEO Jeff Immelt, withdrew, apparently because he’d gotten wind he wasn’t going to get the nod. Then the press briefly reported that HP’s Meg Whitman was who the board wanted….despite her having said firmly she didn’t want the job, twice. It turns out she’d come on Saturday, apparently at Benchmark’s behest, and given the board a little speech on what she thought Uber ought to do.

Not long after that, the press started reporting that the board had settled on a name that had been kept under wraps, that of Dara Khosrowshahi, currently the CEO of Expedia, who was also the highest paid CEO in 2015, pulling down a cool $94.5 million in 2015. While there has been some grumbling about Khosrowshahi’s rich compensation, he’s never made any of the “overpaid CEO” lists. That’s because his spectacular 2015 payday was almost entirely the result of a grant of $90.8 million in stock options…for signing a long term employment agreement stipulating that he remain at the helm until September 2020. In 2016, his pay was a more staid $2.45 million.

But Khosrowshahi is going to be Uber’s $100+ million man, since that’s going to be the order of magnitude cost of buying him out from his Expedia agreement plus whatever special inducements needed for him to join Uber (almost certainly vastly richer in expected comp if you believe that Uber will be able to do an IPO at a suitably lofty valuation, an idea we regard with considerable skepticism).

The press has been positive about the choice, if nothing else because Expedia has been a drama-free tech company and the financial media likes the idea of a tech CEO for Uber (arguably a necessity to keep up the fantasy that a local transportation company deserves a unicorn premium). Expedia managed to be one of two winners in what was originally a four-company fight for dominance in the travel booking business. And it also represents at least a momentary cessation of hostilities at the Uber board, since the vote on Khosrowshahi was unanimous. Recode gives some detail about his background, focusing on factors that may help him succeed, without acknowledging the magnitude of the task.

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