Twitter isn't going to let go of CEO Jack Dorsey just yet.
That's due to the fact Twitter has introduced a temporary cease-fireplace with Elliott Management, the "activist investor" fund that wanted Dorsey replaced. But the emphasis here must be on "transient." The settlement Twitter and Elliott announced today gives Elliott the tools it needed to besides Dorsey the soonest.
Earlier reports say Elliott Management Corporation's head Jesse Cohn reportedly wanted Jack Dorsey gone out of Twitter. That won't happen right away, but the process could really take place by the end of this year as Elliott now has a seat on the table anew. Again, if you want a road map for how this stuff works, take a look at eBay. The eCommerce CEO was changed the same year Elliott was given a seat at that company's table.
Twitter to 'buy-back' US$2 billion worth of stocks
The deal sees Twitter committing to buy back US$2 billion worth of stocks. It's also naming two new board members. One of which is from Elliott Management and the other from Silver Lake Partners, an investment company that's putting US$1 billion into Twitter to fund the buybacks.
Noticeably, the settlement appears to be leaving Jack Dorsey, Twitter's chief executive, in place even after Elliott had pushed for his ouster.
"While our CEO structure is unique, so is Jack and so is this company," Twitter's lead independent director Patrick Pichette said in a statement.
Earlier this year Elliott, which is one of the industry's wealthiest stockholders with more than $40 billion in assets under management, nominated four directors to Twitter's board. The move to remove Dorsey was publicized late last month. Those familiar with the negotiations stated they expected a speedy conclusion.
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New board members to create "the CEO succession plan" this year
Both new board members had fantastic things to mention about running with Dorsey in a press launch published today. The announcement shows that while Dorsey is sticking around for the time being, the board will investigate when it would be suitable to have a new CEO.
The new board members will be part of a committee evaluating "the CEO succession plan." They'll be joined by three additional board members, all of whom currently serve on the board. The group intends to search their findings publicly by the end of the year.
Elliott's preliminary objections to Dorsey have been vague. They seemingly had to do with Twitter perpetually being a chunk of a mess, and Dorsey was also walking a completely separate second huge company. But the investment organization had purchased a four percent stake on Twitter, giving it the leverage to make some noise and potentially cause problems for Dorsey.
Last year, Elliott ran almost this exact identical playbook with AT&T. After shopping for a great stake within the telecom company, Elliott posted a lengthy word trashing AT&T's current acquisitions and inventory performance and is known as for major changes. In the quit, AT&T agreed to 3 desires and far less dramatic changes that appeased Elliott.
