Ajit Karn
According to a Wall Street Journal report, Twitter Chief Executive Officer Elon Musk stated that employees will receive stock-based awards valued at close to $20 billion. This is less than half of the $44 billion Mr. Musk spent last October to acquire the social media platform.
In a statement to employees, Mr. Musk expressed optimism about the social media company’s future. “I see a clear but challenging path to a valuation of >$250 billion,” he said, implying that shares awarded now would be valued ten times higher.
Mr. Musk added in an email obtained by the publication that Twitter is undergoing such swift change that the company “can be viewed as an inverted startup.” According to the communication, he stated that Twitter needed significant adjustments in order to avoid bankruptcy.
According to a separate email sent to employees on Friday, the company informed employees that they will receive additional equity grants that will vest after six months. In approximately one year, employees will be able to pay out a portion of their equity, as the company plans to host a liquidity event. It should be noted, however, that there was no information available regarding the number of employees who will receive equity awards.
Since Mr. Musk’s contentious acquisition of the microblogging site a year ago, employees have had numerous concerns regarding compensation, among others. The publication noted that, according to former employees, Twitter frequently provided stock grants as part of employee compensation that vest over time.
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According to the email, the new grants, which are distinct and in addition to any legacy Twitter equity that was converted to cash at the time of the acquisition in October 2022, will vest over a four-year period.
Regulatory filings indicate that Twitter spent approximately $630 million on stock-based compensation in 2021, the last complete year for which it publicly reported financial results before going private.
