- Employees have become clearer about how their actions will be handled after Elon Musk takes over.
- Inventory can represent a large percentage of a technology worker’s overall compensation package.
- The payment will be handled the same for now, but the changes will come after the deal closes, executives said.
Twitter executives shared details of how employee compensation will work when Elon Musk takes the company private, emphasizing efforts to limit friction during a general meeting.
The board accepted Musk’s takeover offer of $54.20 a share on Monday. Some employees are concerned that the billionaire will water down content moderation efforts and several have said they are already looking to leave.
Moving from a public company to a private company could make it harder for Twitter to retain talented engineers. Most large tech companies grant restricted stock units to employees who purchase for several years, keeping employees longer with the potential to increase their income far beyond a base salary.
During the general meeting, the recordings of which were heard by Insider, Twitter CEO Parag Agrawal and Chairman of the Board Brett Taylor were fraught with questions about how the company will handle this change. Employees submitted questions that were read by CMO and personnel director Leslie Berland during the meeting.
An employee asked why Twitter decided to pay RSUs on its current four-year acquisition schedule after the acquisition, rather than having the capital invested in one go. “Are major shareholders getting paid on a similar schedule? It seems like a way to stop paying employees who might leave or be fired from what they’ve been given,” the official added.
Taylor said that when Musk’s deal closes, instead of being paid in RSUs, these employee stock grants will translate to cash. “People’s compensation plans don’t change in this transaction. Only the currency of those compensation plans changes,” Taylor added.
The executive did not elaborate, but Twitter employees’ RSUs are likely to be invested in the form of cash rather than additional shares on the current schedule. This means that the company will retain some of the retention benefits of these grants, because staff will still have to stay to collect future payments. Most Twitter employees receive at least part of their compensation in stock awards.
Another question from employees was about the potential for an exodus of employees following the Musk takeover. “How did the board and Mr. Musk plan to handle the mass exodus of employees, given that the acquisition was made by a person with questionable ethics?” this worker asked.
Taylor made it clear that Twitter, the board and Musk are all focused on this retention challenge.
“One of today’s themes is continuity and ensuring that Parag and its leadership team continue to successfully operate this platform on behalf of our users and this has obviously been a huge topic of discussion on the board and as I mentioned this is important for Elon Musk also because of the importance of Twitter as a service,” Taylor said.
Taylor admitted that Twitter’s leadership is about to change. He told employees during the meeting that the board “no longer exists on the other side of this transaction.”
Without advice, an employee asked, “Who will hold Elon accountable and how?” Once again, it was Taylor who responded, explaining that public and private companies “operate differently” and that there would certainly be changes to the company’s “governance structure” once Musk takes over.
“There will be a new structure at this location,” Taylor added.