Billionaire Elon Musk took a dig at Twitter’s board and said if his $43 billion bid to buy the social media platform succeeds, the salary of its board will be zilch. Musk was responding to a Twitter thread criticising the decision of the company’s board to adopt a poison pill strategy (or shareholders rights program) last week. “Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there,” Musk tweeted on Monday.
Musk was responding to a tweet by Gary Black, an investment adviser and Managing Partner of the Future Fund, who said the board’s decision is not aligned with interests of the company’s shareholders. If Twitter is taken private, the board members will be without a job, which pays them $250K-$300K per year, Black added.
Earlier on Saturday, Musk also responded to another tweet which mentioned the breakdown of share holding patterns of Twitter’s board members. The thread showed that apart from Dorsey, all the members own about 0.12 per cent stake. “Wow, with Jack departing, the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders,” Musk said in the tweet. Financial Express Online could not immediately verify if the shareholding breakdown was accurate.
Jack Dorsey, Twitter’s founder and former CEO, holds nearly 2.25 per cent stake in the company. Apart from Dorsey, other members on Twitter’s board, including the company’s current chief executive Parag Agrawal, do not have a substantial stake. Unlike its rivals Alphabet Inc and Facebook Inc, Twitter does not have a multi-class share structure. According to a TechCrunch report, a multi-class share structure does many things including concentrating power of a company in fewer hands and in extreme cases, it can ensure that a founder has complete control of a company, forever.
Separately, Jack Dorsey criticised the company’s board over the weekend. Dorsey said Twitter’s board has “consistently been the dysfunction of the company.” He was responding to a tweet about “plots and coups” at Twitter. Dorsey was fired from the company in 2008, however he rejoined it in 2015 as CEO. Dorsey stepped down as the CEO last year. Currently, he sits on Twitter’s board but plans to leave once his term expires at the 2022 meeting of shareholders, which is scheduled for late May.
On Monday, Twitter’s stock rose 7.5 per cent to close at $48.45 per piece, lower than Musk’s offer of $54.20 apiece, after Twitter’s board adopted the shareholders rights program on Friday. The program enables the company to dilute its shares, once a stakeholder owns 15 per cent or more of its stock. The move is aimed to protect the company from a hostile takeover.