How Salle Yoo got Nearly $100 Million in Severance Pay from Uber

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(Bick Bhangoo) #1

Sometimes being a savvy lawyer helps in negotiating a severance deal for one's self. That is exactly what Salle Yoo did when she was asked to step down from her prestigious position in Uber after the big meltdown in the Summer of 2017. Just as the old Springsteen song goes "Those were the best days of my life, Oh, yeah, Back in the summer of '69" Salle Yoo can replace 69 with 2017.

How did this year work out for Salle, well it all comes down to what you know and how you use it as leverage. There was a very tight-knit group of insiders during Travis Kalanick's reign as CEO in Uber, and the core group had (still have) information that can be damaging to Kalanick as well as to Uber. Once the company was in the process of replacing its CEO, the rest of the core group realized that they were on the black-list as well, so they started to negotiate deals, directly with Kalanick.

Yoo started out with a small team back in 2012; the company had only 90 employees at the time. By 2017 Yoo's legal team had grown to 290 people. The growth was due to the expanding number of cases that had to be dealt with, and Uber preferred to deal with these in-house rather than outsource, keeping the secrets close to home.

During the 5 years of employment, Yoo had a good relationship with Kalanick, and as the legal counsel had access to every detail of the company's activities, which made her a very powerful person. However, as the company grew, so did the legal issues, and Kalanick felt that Yoo's performance in managing her team was not up to par with what the company needed.

On the flip side, Yoo felt that Kalanick was the source of all of Uber's issues, which was true, but Kalanick was also the reason for all of Ubers expansion and successes as well. The problems all came to a final explosion point when Waymo sued Uber for stealing confidential information. This was when Kalanick decided that Yoo should be replaced, and Yoo was very happy to negotiate a golden handshake in this instance.

Initially, Yoo demanded $100 million, but this was a negotiating gambit, where you ask for ten times the amount you expect to get and negotiate down to what you want, hoping to make a small bonus on the way. This is also what happened, and Kalanick refused the request and negotiated Yoo down to around $30 million, which while that is much less than $100 million, was a wonderful sum of cash to receive. Part of the negotiations included Kalanick or Uber in buying her Uber shares back. Yoo also included a leveraged condition, where if another employee received a better deal, her deal would match the better one.

The bottom line, Yoo left Uber far richer and wiser than when she entered it. Five years and over $25 million later, and Yoo can continue the singing "Those were the best days of my life, Oh, yeah, Back in the summer of '17"


(Andrew Martin) #2

Just imagine this:
You set up a venture capital start up.
You get private investors putting in billions.
You don’t make a profit, in fact you lose billions every year.
…and you pay millions in severance pay!
WTF!!!
When will idiot investors start to understand that a company does not pay a lot of money for failure.