Jack Dorsey survives intervention by activist shareholder group, after admitting he will reevaluate plans to move to Africa due to coronavirus outbreak
The future of Twitter CEO and co-founder Jack Dorsey this week seems a little more certain, after it was reported he had survived attempts to remove him from office.
Last week it emerged that activist shareholder group Elliott Management had taken a “sizeable stake” in the micro-blogging platform.
Elliott Management was founded by billionaire Paul Singer (a major Republican party donor). It was reported the group was planning to push for changes, including replacing Dorsey.
But now CNN has reported that Dorsey survived the threat to his leadership when both Twitter and Elliott Management announced on Monday they had reached an agreement that keeps Dorsey in charge.
As part of the agreement, Twitter will reportedly add two new members to its board of directors and receive a $1 billion investment from investor Silver Lake.
Twitter also expects to undertake a $2 billion share repurchase program.
“I am looking forward to working with Jack and the Board to help contribute to realising Twitter’s full potential,” Jesse Cohn, partner at Elliott, said in a statement Monday.
In addition to the new board appointments and potential share buybacks, Twitter was quoted by CNN as saying on Monday that it is looking to increase revenue growth. At the same time, Twitter is setting a goal of growing its “monetizeable” daily active users by 20 percent or more, roughly in line with its recent growth rates.
Other element will see the Twitter board of directors plan to create a temporary committee to help evaluate Twitter’s leadership structure.
“As a Board, we regularly review and evaluate how Twitter is run,” Patrick Pichette, lead independent director of the Twitter Board, reportedly said in a statement. “And while our CEO structure is unique, so is Jack and so is this Company.”
Dorsey, it should be remembered, is also chief executive of Square, an online payment company.
According to CNN, Dorsey spends his mornings at Twitter and afternoons at Square (Twitter and Square’s San Francisco offices are located across the street from each other).
This unorthodox approach was not helped when Dorsey in November 2019 announced he planned to live and work in Africa for part (up to half) of each year.
Dorsey made the commitment after finishing a tour of Africa.
However last week Dorsey reportedly said he will “reevaluate those plans”.
He cited concerns about the novel coronavirus as his reason, but the decision could have ease the concerns that Elliott Management had about him.
Indeed, Dorsey’s running of two separate companies and his announcement about moving to Africa, were cited in the media as the motivations for Elliot’s initial desire to remove Dorsey from his post.
Dorsey had co-founded Twitter in 2006, but he had left the micro-blogging platform in 2008 (amid complaints he was too focused on other activities such as Yoga) to set up mobile payments firm Square.
However Dorsey returned to the Twitter fold in 2011 when Dick Costolo took over.
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