- Employees got some clarity on how their actions will be treated after Elon Musk takes office.
- Stocks can represent a large percentage of a tech worker’s overall compensation package.
- The payment will be treated the same for now, but changes will come after the deal closes, executives said.
Twitter executives shared details of how employee compensation will work once Elon Musk takes the company private, emphasizing efforts to limit attrition during a general meeting.
The board accepted Musk’s takeover offer of $54.20 per share on Monday. Some employees worry that the billionaire will water down content moderation efforts, and several have said they are already looking to leave.
Switching from a public company to a private company could make it harder for Twitter to retain talented engineers. Most big tech companies grant restricted stock units to staff that vest over several years, keeping employees longer with the potential to increase their income well beyond a base salary.
During everyone’s meeting, recordings of which were heard by Insider, Twitter CEO Parag Agrawal and board chairman Brett Taylor were peppered with questions about how the company will handle this change. Employees submitted questions that were read by the CMO and Chief People Officer Leslie Berland during the meeting.
A staff member asked why Twitter decided to pay RSUs in its current four-year vesting program after the acquisition, instead of having the one-time equity vesting. “Are major shareholders paid on a similar schedule? It feels like a way to avoid paying employees who may leave or be laid off what they were given,” the employee added.
Taylor said that when the Musk deal closes, instead of being paid out in RSUs, those employee stock grants will be translated into cash. “People’s compensation plans don’t change in this transaction. It just changes the currency of those compensation plans,” Taylor added.
The executive did not elaborate, but it is likely that the Twitter employee RSUs will be awarded in the form of cash rather than additional shares under the current schedule. This means that the company will retain some of the retention benefits of these grants, because staff will have to stay behind to receive future payments. Most Twitter workers receive at least part of their compensation in stock.
Another question from employees was about the potential for a staff exodus in the wake of the Musk acquisition. “How did the board and Mr. Musk plan to deal with the mass exodus of employees, considering the acquisition is by a person with questionable ethics?” this worker asked.
Taylor made it clear that Twitter, the board and Musk are focused on this retention challenge.
“One of the topics today is continuity and making sure that Parag and this leadership team continue to operate this platform successfully on behalf of our users and that’s obviously been a big topic of discussion on the board and as I mentioned it’s important to 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 at the other end of this transaction.”
With no board in place, one employee asked “Who will hold Elon accountable and how?” Again, it was Taylor who responded, explaining that public and private companies “operate differently” and that there are sure to be changes to the company’s “governance structure” as soon as Musk takes office.
“There will be a new structure at this location,” Taylor added.