Twitter has reached an agreement with Elliott Management Corp granting an executive board chair just a week after the investment fund coordinated by Paul Singer proposed the removal of Jack Dorsey from the position of CEO.
The agreement also provides for a commitment from Silver Lake (a company known for investing in technology companies) to invest $ 1 billion in Twitter, and will also have a place on the board of directors. The resources invested by Silver Lake will be used, together with other Twitter resources, to kick off a $ 2 billion share buyback program.
Both new board members spent a few positive words in Dorsey's official statement. The Twitter co-founder will therefore remain in his place, although a committee – to which Elliott and Silver Lake will be part, along with three other current board members – will be set up to evaluate a possible succession plan. The conclusions of the committee will be made known later this year.
Twitter is one of the few US technology companies to be coordinated, but not controlled, by one of its founders. The shareholders all have equal voting rights, which makes Dorsey, the 2% owner of the company, potentially vulnerable to a gauntlet launched by activist investors, just like in the case of Elliott.
