Twitter’s BitterTweet AGM: The big blows
Majority of shareholders go against management wishes on how they should vote.
There is no denying that Twitter’s recent annual meeting unfolded in the shadow of Tesla CEO Elon Musk’s plan to buy the social media company. But this shouldn’t detract attention from the actual meeting, which was itself packed with shareholder action.
Specifically, the significantly low support its executive pay received; the failure of director candidate Egon Durban to gain majority shareholder support; and the passing of two shareholder proposals on Twitter’s concealment clause and electoral spending. Let’s break these down.
Dwindling support for Twitter’s executive pay
Twitter CEO Parag Agrawal was set to receive a $30.4 million pay package this year, which is largely made up of share awards totalling $29.1 million.
However, proxy advisors Glass Lewis and Institutional Shareholder Services (ISS) raised concerns that the company’s pay decisions weren’t transparent enough. Specifically, ISS noted that the pay package lacked disclosure on “individual performance”.
As a result, shareholder support for Twitter’s executive pay plan only stood at 58% this year, compared to 96% at its 2021 annual meeting. But even so, the vote was only advisory, and there is no indication that Mr. Agrawal will not receive his $30.4 million pay package.
Shareholders vote down Egon Durban
Egon Durban was one of two director candidates that went up for election at Twitter’s recent annual meeting.
But while the other candidate, Patrick Pichette, got 98% support from shareholders, Egon Durban only got 43% support. Following protocol, Mr. Durban then submitted his resignation letter.
It has been speculated that this is linked to Mr. Durban’s relationship with Elon Musk, but the official line is more practical. Twitter cites investor concerns over Mr. Durban’s directorship on six other Boards as the reason why he was voted down.
Regardless, Twitter refused to accept Mr. Durban’s resignation, saying that he is a valuable Board member. But to address investor concerns, Mr. Durban agreed to serve on only five company Boards going forward.
Shareholders push for concealment clause and electoral spending reports
Going against management recommendation, a majority of shareholders also passed two — out of five — shareholder proposals.
One of the proposals concerned Twitter’s use of concealment clauses in relation to harassment, discrimination, and other unlawful acts. It requested the social media company to report on the risks of using these clauses, and was passed by shareholders with a 69% majority.
The other proposal wanted Twitter to share more about its involvement in US elections, whether local or federal. Specifically, the proposal requested Twitter’s policies on electoral spending, and details of those expenditures. Shareholders passed the proposal with a 54% majority.
To put these proposals in context: last year, only 17% of governance-focused shareholder proposals at public companies were passed by investors. So, to have two governance proposals pass in one meeting is quite the feat.
Three cheers for shareholder democracy
Perhaps the golden question on people’s mind is: will Twitter listen to these results, and most importantly, act?
But if anything can be gleaned from Twitter’s recent annual meeting, it is that shareholders can and will keep companies in check. They continue to make their concerns heard by voting independently of company recommendations.
Three cheers for shareholder democracy!
