Twitter CEO Jack Dorsey isn’t going anywhere, at least for the time being, with Twitter reaching a deal on Monday with Elliott Management, the activist investor group that had been recently pushing for a change in the company’s leadership.
As part of the deal, Elliott Management will receive a seat on Twitter’s board; Elliott Management partner Jesse Cohn will take the seat. Twitter will also receive $1 billion from Silver Lake investment firm, and plans to spend $2 billion on a stock repurchase plan. Silver Lake will also get a board seat, per the new agreement.
As for Elliott Management’s plan to push Dorsey out as CEO, that’s now water under the bridge. Patrick Pichette, lead independent director of Twitter’s board, said the board has formed a committee to provide a “fresh look” at the company’s leadership structure and its CEO succession strategy. The committee is expected to share its thoughts by the end of 2020.
“Twitter has undergone remarkable change over the last several years. We are deeply proud of our accomplishments and confident we are on the right path with Jack’s leadership and the executive team,” Pichette said in a statement. “As a Board, we regularly review and evaluate how Twitter is run, and while our CEO structure is unique, so is Jack and so is this Company. To continue to ensure strong governance, we are pleased to create a temporary Board committee that will build on our regular evaluation of Twitter’s leadership structure.”
Twitter’s new arrangement comes a week after Elliott Management, led by billionaire Paul Singer, had two chief complaints about Dorsey, according to a person familiar with its plans.
First, critics complain that Dorsey is a part-time CEO. By splitting his time running Square, his other multibillion-dollar company, Dorsey isn’t able to devote the attention needed to run Twitter, according to the firm. Second, Elliott faults Dorsey’s performance: The company has failed to innovate at the same rate as its Silicon Valley peers, according to the person familiar with Elliott’s plans, and it has made some dubious choices in recent years, like shuttering Vine — and opening the door for TikTok to take its place in the short-video space. Dorsey has been CEO since mid-2015.
Twitter’s shares on Monday were down about 0.5%, but that was better than the market’s overall sharp decline.