Twitter has struck a deal to keep Jack Dorsey as CEO, after an activist hedge fund recently agitated for leadership change at the company.
The deal will include a $2 billion share buyback program and give the hedge fund, Elliott Management, a seat on Twitter’s board of directors, according to a press release.
Elliott, which has invested in and advocated for changes at many major companies, had recently pushed for changes at the company. Last week, Dorsey said he was re-evaluating his plans to spend more time in Africa, though he cited the new coronavirus outbreak as the reason.
Technology investment firm Silver Lake will be investing $1 billion in Twitter as part of the agreement, and Silver Lake will also receive a board seat. The board will also work toward finding a third new board member, according to the press release.
Egon Durban, co-CEO and managing partner of Silver Lake, and Jesse Cohn, a partner at Elliott, are set to join Twitter’s board.
“Silver Lake’s investment in Twitter is a strong vote of confidence in our work and our path forward,” Dorsey said in the press release. “They are one of the most respected voices in technology and finance and we are fortunate to have them as our new partner and as a member of our Board.”
The company has since been able to show some user growth and turn a profit. The company has also made a variety of changes to its platform and its user policies that have helped limit hate speech and misinformation on its platform.
But Dorsey’s leadership has been the subject of some criticism. He is also the CEO of the payments company Square and lives a lifestyle not typical of most chief executives. In 2018, he took a trip to Myanmar to participate in a 10-day silent meditation session.
Elliott’s move to pressure Dorsey, however, was met with a show of support from employees who organized around a hashtag to keep him as CEO.
The news release notes a clause stating that Twitter is “reinforcing its commitment to impartiality in the development and enforcement of its policies and rules,” and that Silver Lake and Elliott will not “comment on … or attempt to influence” those policies or rules, or any enforcement decisions by Twitter.
Enforcement of policies on Twitter — and on other social media sites — has become a highly politicized process, with many conservatives claiming that the platform hampers them from sharing their views. Twitter’s policies, including those banning hate speech, racism, inauthentic accounts and harassment, have resulted in the company pushing many well-followed members of the far-right off the platform.
Silver Lake may prove to be a useful ally for Jack Dorsey given its status as a powerbroker in Hollywood. The company has $43 billion in assets in several tech and media companies. Silver Lake worked with Ari Emanuel and Patrick Whitesell, currently the CEO and executive chairman at Endeavor, respectively, to spearhead their acquisition of global sports rights firm IMG in 2013.
Silver Lake also owns investments in Ultimate Fighting Championship, Alibaba, James Dolan’s Madison Square Garden Company and Oak View Group, a concert services firm spearheaded by music industry entrepreneur Irving Azoff.
Late last year, Silver Lake also took a stake in the company that backs Manchester City Football Club and New York City Football Club.