How Uber’s Cultural Overhaul Was Tested by Complaints Against Top Deal Maker

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Soon after Chief Executive Dara Khosrowshahi joined Uber Technologies Inc. last fall and pledged to overhaul its workplace culture following allegations it overlooked harassment and chauvinism, the startup had to decide what to do about a senior executive accused of sexual misconduct in the office.

An outside law firm had substantiated some complaints against Cameron Poetzscher, head of corporate development, during a monthslong investigation, according to people familiar with the investigation. The firm found he had a pattern of making sexually suggestive comments about other co-workers, including describing which ones he would like to sleep with, and that he had engaged in a consensual affair with a colleague in violation of company policy because he contributed to her annual review, according to the people.

When the findings of the probe were presented to an internal panel, some panel members argued he should be terminated, according to the people.

Mr. Poetzscher oversaw some of Uber’s biggest deals, including a negotiation to sell a stake in the ride-hailing company to

SoftBank Group
Corp.

for billions of dollars.

In November, Uber gave Mr. Poetzscher a formal warning, reduced his annual bonus and mandated sensitivity coaching, according to the people. More than eight months later, Mr. Poetzscher was promoted to acting head of finance, reporting to Mr. Khosrowshahi. Uber has since hired a new chief financial officer to whom Mr. Poetzscher now reports.

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Mr. Poetzscher in a statement to The Wall Street Journal said he was “rightfully disciplined” by Uber. “I deeply regret and have learned from this error in judgment, and I am proud of how hard everyone at Uber is working to ensure our company is a positive, respectful, and inspiring place to work,” he said.

The company’s decision of discipline over dismissal, which has drawn criticism from some people familiar with it, is an example of the kinds of choices firms are facing as more complaints arise from employees about the workplace behavior of colleagues.

Uber has been trying to improve the firm’s culture and morale after a punishing period in which a former software engineer’s allegations of permissiveness toward sexual harassment led to a broad probe that resulted in the firing of about 20 of its roughly 17,000 employees and included formal warnings and training sessions for others. Law firm Perkins Coie LLP oversaw the broader investigation, as well as Mr. Poetzscher’s.

Mr. Khosrowshahi, who started as CEO in September 2017, was tasked by the board with revamping the company’s embattled workplace culture, while also laying the groundwork for an initial public offering. He made “We Do the Right Thing. Period.” a mantra around the office and many current and former employees credit him with helping to make Uber a better place to work.

Uber said in a statement that “there was never any recommendation or determination by outside counsel to terminate” Mr. Poetzscher, and that neither the CEO nor General Counsel Tony West were presented with such a recommendation. Mr. Khosrowshahi, who joined Uber when the probe was under way, wasn’t involved in the decision and was briefed after the fact on the investigation and the broad outlines of the allegations, according to a person familiar with the matter. Mr. West started in November, as the matter was wrapping up.

Dara Khosrowshahi, who started as CEO in September 2017, was tasked by the board with revamping the company’s embattled workplace culture.

Dara Khosrowshahi, who started as CEO in September 2017, was tasked by the board with revamping the company’s embattled workplace culture.


Photo:

Justin Sullivan/Getty Images

“We take all employee complaints seriously, as we did in this matter from 2017,” an Uber spokesman said, referring to the investigation into Mr. Poetzscher’s behavior. “It was fully investigated by outside counsel, and the appropriate actions were taken as a result.”

Complaints about Mr. Poetzscher surfaced in spring 2017 as part of the broader workplace probe. Mr. Poetzscher, who is married, is admired by many for his deal making and negotiating prowess but considered abrasive by others due to his at-times provocative language and behavior, say current and former employees. A 2015 lawsuit, in which he was accused by his children’s nanny of masturbating in front of her and seeking sexual favors, received considerable media attention and was widely discussed in the Uber offices, according to current and former employees. The nanny also alleged Mr. Poetzscher and his wife underpaid and mistreated her. The couple settled the suit and denied the allegations.

An Australian native who previously worked at

Goldman Sachs Group
Inc.,

Mr. Poetzscher played a key role in negotiating SoftBank’s purchase in January of a 15% stake in Uber valued at about $7.7 billion, according to people familiar with the matter. He called board members to pitch the deal and personally worked to persuade former CEO Travis Kalanick, who is still a director, to support it, according to a person familiar with the matter.

Mr. Poetzscher, 48 years old, quickly became regarded within the firm as a trusted adviser to Mr. Khosrowshahi, according to current and former employees.

Uber this summer pushed out human-resources chief Liane Hornsey following an investigation into allegations that she had made racially charged comments, didn’t act on some internal charges of racial discrimination and disparaged certain executives, according to people briefed on her departure. Ms. Hornsey in an email to staff at the time said she had been thinking about leaving Uber “for a while,” but she didn’t give a specific reason for her exit and declined to comment for this article.

Around the same time, the company retained operating chief Barney Harford despite complaints from some employees who said he made racially insensitive comments, according to people familiar with the matter. At a companywide meeting in July, Mr. Khosrowshahi said Uber was investigating Mr. Harford, with the help of outside counsel, and would make a decision at the end of that process, according to audio of the meeting reviewed by the Journal. Mr. Harford, who is still under investigation, sent employees a letter of contrition for his remarks when the allegations came to light. He didn’t respond to a request for comment.

At the July meeting, Mr. Khosrowshahi, in response to employee questions, defended the company’s decision to push out Ms. Hornsey, who had been hired by Mr. Kalanick. Mr. Khosrowshahi hired Mr. Harford, whom he called “a friend,” according to audio of the meeting.

Asked by employees why Ms. Hornsey and Mr. Harford were treated differently, Mr. Khosrowshahi said at the meeting that “these are very, very different circumstances,” without elaborating. He said he was recusing himself from the investigation into Mr. Harford.

Write to Greg Bensinger at greg.bensinger@wsj.com



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