Jack Dorsey’s work as CEO of
Twitter said in a securities filing Monday that a board committee formed this spring had recommended that the current management structure remain in place. The announcement gives Dorsey a reprieve after his management of the company was scrutinized earlier this year by Elliott Management Corp., which is known as one of Wall Street’s toughest activist investors.
The file indicates that the committee is also suggesting changes to the structure of Twitter’s board of directors, which would give investors more voice, and that it would continue to assess management’s performance.
Twitter and Elliott struck a deal in March in which the company agreed to appoint two board members and commit to repurchase $ 2 billion in shares. The deal also called for the formation of a new committee to study Twitter’s leadership, which effectively created a trial period for Mr. Dorsey to prove himself to new investors.
The committee was chaired by Patrick Pichette, the former chief financial officer of Google who earlier this year was appointed senior independent director of Twitter. Jesse Cohn, head of activism for US equities at Elliott, and Egon Durban, co-CEO and managing partner of Silver Lake, also served on the committee.
Silver Lake made a significant investment in Twitter earlier this year.
Twitter previously said the new council committee would announce its findings before the end of the year. Representatives for the company and Elliot declined to comment.
Mr. Dorsey divides his time between Twitter and Square Inc., a financial technology company that he also co-founded and is also the CEO of. His shared duties have raised questions about his ability to properly focus on the issues facing Twitter, where he has often been a more passive leader than some of his Silicon Valley peers.
Ever since Elliott started scanning Twitter at the end of February, the company’s shares rose about 20%. Twitter has grown its user base by roughly 23% since the fourth quarter of 2019, surpassing its commitment earlier this year to increase the user base by more than 20% this year and beyond.
Both of these numbers tended to increase before last week, when Twitter posted its slowest user growth in years. Twitter shares fell 21% the day after their earnings were released.
Mr. Dorsey’s next major test is Twitter’s election management.
In late October, Twitter came under scrutiny by lawmakers for the company’s decision to block users from sharing links to a pair of New York Post articles about Joe Biden’s son, Hunter Biden. Mr Dorsey’s independent leadership meant he was not involved in the initial discussions on the move, the Wall Street Journal previously reported.
Mr Dorsey’s monitoring of Twitter has drawn criticism from lawmakers. In a hearing Regarding content moderation at the end of October, Senator Ted Cruz (R., TX) asked Mr. Dorsey, “Who the hell elected you and put you in charge of what the media is allowed to report?”
Twitter said he prepared at length for the next elections and Monday announced updated policies that the company said would facilitate debate while protecting the integrity of the vote. These updates include plans to tag any post from a candidate who makes opening statements on election results. The policy will also apply to US-based accounts with more than 100,000 followers and to tweets that drive significant re-engagement on the platform.
Write to Georgia Wells at [email protected]
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Appeared in the November 3, 2020 print edition as “Twitter’s Dorsey Survives Review”.