Twitter executives shared details of how employees' compensation will work once Elon Musk takes the company private, stressing efforts to limit attrition during an all-hands meeting.
The board accepted Musk's takeover offer of $54.20 a share on Monday. Some employees are concerned the billionaire will dilute content moderation efforts and several have said they are already looking to leave.
Shifting from a public company to a private business could make it more difficult for Twitter to retain talented engineers. Most big tech companies grant restricted stock units to staff that vest over multiple years, keeping employees around longer with the potential to increase their income well beyond a base salary.
During the all-hands meeting, recordings of which were heard by Insider, Twitter CEO Parag Agrawal and board chair Bret Taylor were peppered with questions about how the company will handle this switch. Employees submitted questions that were read out by CMO and chief people officer Leslie Berland during the gathering.
One staffer asked why Twitter has decided to pay out RSUs on their current four-year vesting schedule after the takeover, versus having the equity vest all at once. "Are major shareholders being paid out on a similar schedule? It feels like a way to get out of paying employees who may leave or get laid off what they were granted," the employee added.
Taylor said that when the Musk deal closes, instead of being paid in RSUs, those employee stock grants will translate into cash. "People's compensation plans don't change in this transaction. Merely the currency of those compensation plans change," Taylor added.
The executive didn't elaborate, but it's likely that Twitter employees' RSUs will vest in the form of cash rather than additional stock on the current schedule. This means the company will keep some of the retention benefits of these grants, because staff will have to stick around still to get the future payouts. Most of Twitter's workers receive at least some of their compensation in stock awards.
'One of the themes of today is continuity'
Another employee question was about the potential for an exodus of staff in the wake of Musk's takeover. "How did the board and Mr. Musk plan on dealing 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 themes of today is continuity and making sure Parag and this leadership team continues to operate this platform successfully on behalf of our users and that has obviously been a big topic of discussion at the board and as I mentioned, that is important to Elon Musk as well because of the importance of Twitter as a service," Taylor said.
Taylor admitted that Twitter leadership is set to change. He told staffers during the meeting that the board "no longer exists on the other end of this transaction."
Without a board in place, an employee asked "Who will keep Elon accountable and how?" Again, it was Taylor who answered, explaining that public and private companies "operate differently" and that there were certain to be changes to the company's "governance structure" as soon as Musk takes over.
"There will be a new structure in this place," Taylor added.
