ELON Musk publicly stated that he would save Twitter $3million by dropping the executive boards’ salaries to zero.
The Tesla and SpaceX boss is publicly grilling the Twitter executive board as they try to stamp out his bid to buy the company.
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“Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there,” Musk wrote on Twitter.
Musk has been filleting Twitter execs, who collect nearly $300,000 in annual salaries but own next to no stock.
As a result, the board would have little to gain by turning the company over to Musk, whereas larger shareholders would be in for a major payday.
Musk and his defenders have been trying to leverage the boards’ lack of shares against the gains his takeover would represent.
Twitter founder Jack Dorsey has been stirring the pot with cryptic posts.
Dorsey endorsed a tweet that read “Good boards don’t create good companies, but a bad board will kill a company every time,” – surely a dig at the folks running the show today.
Dorsey was removed as the CEO of Twitter in 2008 and has plans to depart from the board later this year.
Musk looped Dorsey into his argument, writing “Wow, with Jack departing, the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders,” in a tweet.
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Past colleagues of Musk have jumped to his defense as the company attempts to swallow a ‘poison pill‘ – a method for squashing a hostile takeover by diluting the new party’s stake.
The Vanguard Group, a money management firm, reinvested in the company to become the largest shareholder and knock Musk down a peg.
David Sacks, a fellow South African entrepreneur and partner of Musk’s at X.com, wrote “Poison pills should be illegal. Every company run by a weak management team should be in play,” on Twitter.
It should be noted that $3million dollars may seem like considerable savings – but at Musk’s valuation of $43billion it represents just .0007% of the Twitter’s financial handle.
Ultimately, the poison pill strategy doesn’t bar Musk from buying a controlling stake or all of the company – it just makes it more expensive.
The tactic might not deter the richest man in the world.
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