Twitter Chief to Share Shares with Employees
Back last July, Twitter chief Dick Costolo resigned and in stepped co-founder Jack Dorsey to temporarily take his place. Earlier this month, that temporary position became permanent and Dorsey now has a big job on his hands.
Over the last couple of the months, several senior managers have left the company and because Twitter hasn’t been fairing as well as it could have been of late, Dorsey was stuck with the uncomfortable task of letting more staff go.
This led to his recent announcement that he would have to cut 8% of Twitter’s workforce, which is about 300 people.
Now, of course, Dorsey has to work on boosting his team’s morale and transforming the company, and he might have come up with just the way to do that.
And so he will be giving away a third of his shares in the company to the employees that work for him. This amounts to around $197 million (£128 million), which is exactly 1% of Twitter, coming directly from his own holdings.
His plan is to invest directly in the staff, and as he explained in a tweet last week, “I’d rather have a smaller part in something big, than a bigger part in something small.”
As for me: I’d rather have a smaller part of something big than a bigger part of something small. I’m confident we can make Twitter big! ✌️
— Jack (@jack) October 23, 2015
If the shares were to be divided evenly between the 3,700 employees, every person would have about $53,000 worth of Twitter each.
However, Dorsey’s approach isn’t going to be as straightforward as that and the shares instead will be going into a stock pool from which the staff are rewarded based on their performance.
This makes more shares available to the employees, yes, but also means there are more shares in the company for incoming and promoted staff members. They can be used to entice a prospective employee to join the team or give someone more reason to stick around.
When he made the announcement, Dorsey explained that somewhere along the line, Twitter’s relationship with outside app developers become complicated, confusing, and unpredictable. This is obviously not something you want in a company like Twitter, and he felt that this was something that had to be addressed. “We want to come to you today and apologise for that confusion,” he said.
As if to back up his words, Twitter will be improving the ways developers and publishers alike can manage their Twitter content around the internet, in the hope of further broadening its user base.
This includes a new tool called Publish which will help news outlets, for example, to tailor the way embedded tweets look and feel on their websites, as well as releasing a new embed format for their posts where video and photo content is given more prominence.
All in all, as with any change in power, Dorsey is going to be making some changes, some good and some bad. But right now, the scales seem to be tipping in the favour of the former, so let’s hope that he will be able to restore Twitter to its former glory.