Twitter’s Chief Technology Officer Parag Agrawal was Jack Dorsey’s top choice for the CEO position. (File)
When Elliott Management Corp began pushing for changes at Twitter Inc in February 2020, one of its stipulations was that the company update its CEO succession plan – activist investors didn’t like that Jack Dorsey had two full-time jobs and wanted an alternative strategy for when he retired from social media.
On the eve of the US presidential election in November, more than a year ago, Twitter’s board released a statement saying that the plan for a potential leadership change had been approved. What the board did not say is that at the top of the list of internal candidates to succeed Dorsey, according to two people familiar with the matter, is Chief Technology Officer. Parag Agrawal.
While Dorsey’s decision to step down as chief executive last week caught investors and employees by surprise, the framework for his departure – including identifying a designated replacement – has been more than a year. Early iterations of the plan didn’t guarantee Agrawal would become the top job, and Twitter’s board briefly reviewed a number of outside candidates for the role, who requested anonymity for the interview. know because discussions are private. But Agrawal was Dorsey’s top choice for the job, and he was the only candidate to be seriously considered internally or externally when the time came to take on the role of Dorsey, people familiar with the matter said. know.
“He was my choice for a while because of how deeply he understood the company and its needs,” Dorsey wrote in an email to employees.
Agrawal’s official promotion to the position of CEO elevates a previously little-known technologist whose duties include overseeing infrastructure, blockchain and cryptocurrency initiatives. death of Twitter, to one of the most popular gigs in the industry. The move, which has already led to a restructuring of Twitter’s senior leadership, followed Elliott’s share buyback in late 2019 and a subsequent public campaign to pressure Dorsey to reform. improve the company’s business by driving growth and building products faster.
In March 2020, Elliott and Twitter reached an agreement to let Dorsey leave his job, but required some changes to the board, lofty business goals and succession plan. finally identified Dorsey’s successor. Eight months later, in November 2020, the board of directors approved Twitter’s management structure after a review, keeping Dorsey in control.
Less than a year later, however, in October 2021, Dorsey informed the company’s directors and some of the company’s top employees of his plans to step down, according to a person familiar with the matter. this move. Although Elliott’s agitation for change led to speculation that it may have pushed Dorsey away, the company has not issued a new ultimatum to Dorsey or asked him to step down, two people familiar with the matter said. .
Twitter chief Martha Lane Fox, who chairs the board’s nomination and governance committees, oversaw the CEO search process, which is much quicker than the last time Twitter was looking for a CEO. new in 2015. That time, Twitter’s board finally brought home co-founder Dorsey. after a months-long public search. The board did not hire an executive search firm this time, according to a person with knowledge of the process, and the board was quick to address a known number: Agrawal, a director Longtime Twitter executive, technically in-depth with little external prominence.
While Dorsey may have left on his own timeline, it’s possible that Elliott’s pressure on Twitter still contributed to the CEO’s decision to leave and focus on his other company, the digital payments giant. Digital Block Inc, formerly known as Square. A Twitter spokesperson declined to comment. An Elliott spokesman pointed Bloomberg about the company’s statement last week, in which it said its “cooperation” with Dorsey over the past two years was “productive and productive.”
Insiders and New York Times previously reported that Agrawal has long been a leading contender.
By the time Elliott first approached Twitter’s board in February 2020, the social network had been a potentially attractive target for activist investors for years.
The company’s cultural influence extends far beyond its business performance, leading some investors to view the company as undervalued and its leadership holding dual CEO positions, meaning the attention of he was divided. Twitter’s stock structure is also attractive to activists. Unlike Facebook’s parent company, Meta Platforms Inc. or Snapchat owner Snap Inc., whose preferred stock classes give early investors and executives superior control, Twitter has only one class of stock. That means anyone with enough money to do so can buy shares to pressure the company.
In November 2019, Dorsey gave Elliott even more impetus when he tweeted that he plans to spend the longest time of 6 months in 2020 working from Africa. It’s a questionable approach for a CEO who runs two major San Francisco-based tech companies. (Though the tweet was controversial at the time, and Dorsey reverted to that plan afterward, he’s still been able to pursue his life as a vagabond: He’s spent most of the past 18 months doing it. remote work in Hawaii, Costa Rica and French Polynesia because of the pandemic. )
Elliott’s approach began with a letter to Twitter’s board, leading to the first meeting between representatives from both sides in late February 2020 in a lounge at San Francisco International Airport. . The letter was never made public, but Elliott took issue with Twitter’s corporate governance, speed of execution, and most importantly, its CEO’s decision to hold two jobs at once. Dorsey also opposes hiring an executive to help run Twitter’s day-to-day operations, people with knowledge of the situation said, a move that could assuage some critics worried that he Not paying enough attention to Twitter.
When Elliott moved in, Twitter executives knew they were at risk. Elliott and its founder, Paul Singer, are famous for being on the right track when they invest in public companies. Last year, the company invested in EBay Inc. and demands for change led to CEO Devin Wenig resigning nine months later. In 2017, Bloomberg News called Singer “the world’s scariest investor.”
Twitter executives started looking for friendly faces. The company hired Goldman Sachs Group Inc. as an advisor, and the board discussed trying to make Laurene Powell Jobs director, the two said. The Silicon Valley philanthropist and businesswoman, who was married to the late co-founder of Apple Inc., Steve Jobs, is a friend of Dorsey.
The executives also connected with the investment firm Silver Lake Partners and its co-CEO, Egon Durban. The thinking is that Durban and Silver Lake will be Twitter-friendly and help offset some of the stress coming from Elliott. A spokesperson for Silver Lake declined to comment.
In a twist that surprised many observers, Twitter and Elliott quickly reached a public settlement just weeks after their initial contact. Twitter will add Elliott’s Jesse Cohn to its board; the board of directors will review corporate governance and succession plans for the CEO; and Twitter will agree on new revenue and user growth targets. Silver Lake invested $1 billion in Twitter and Durban was also added to the board. Dorsey will keep her job for the time being. Some wonder if a truce will be short-lived, given Elliott’s track record of executives.
For most of the next eight months, however, things went relatively smoothly. Twitter’s user base spiked thanks to the global pandemic, which fueled consumers’ thirst for real-time news. Revenue growth has been inconsistent for a time as ad dollars dry up, but user growth means the promise of more Twitter reach as those marketers start spending. return. Twitter said building better targeted ads was its “number one priority” during its April 2020 earnings call – a stark change after previously focusing on social media. as “healthy conversation”—and in the middle of that summer, Twitter announced a subscription product plan that had been discussed internally for years.
On November 2, 2020, Twitter’s board of directors, which now includes members from both Elliott and Silver Lake, released a filing stating that it had reviewed the company’s corporate structure. It also “expressed its confidence in management and recommended that the current structure remain in place.” Once again, Dorsey got the backing of activists to keep his job.
However, Elliott never completely disappeared. Twitter announced several ambitious revenue goals during its February 2021 analyst day event – its first Analyst Day since 2014 – including a goal to double annual revenue by 2020. 2023. In April, Cohn announced he would be stepping down from the company’s board, but just a month later, Elliott bought more than $200 million in Twitter stock after shares tumbled following a poor earnings report. .
The deeper investment is a not-so-subtle reminder that while Cohn leaves the board, Elliott is still nearby, ready to dive in if things don’t improve. As of August, it still owns a large amount of Twitter shares worth more than $1 billion, according to a person familiar with the company.
It’s possible that those lofty goals and the looming prospect of pressure from more active investors helped inspire Dorsey’s departure. It is also possible that the Square, now the Block, is simply more in line with Dorsey’s passion. He is an outspoken Bitcoin proponent who tweets constantly about the digital currency. While Twitter is focusing on cryptocurrency and blockchain technology, Block is more focused on financial technology and has an entire division that builds financial services related to Bitcoin.
Regardless of Dorsey’s reasons for leaving, Elliott is still very attentive to Twitter. Although the company no longer has a seat on the board, their announcement on the day Dorsey resigned gave Agrawal a standing ovation.
“Having known both incoming President Bret Taylor and incoming CEO Parag Agrawal,” the statement read, “we are confident they are the right leaders for Twitter at this critical time for the company.” ty.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
