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• Parag Agarwal will be the CEO of Twitter with immediate effect
• Dorsey faced ousting from Twitter stakeholder Elliott Management in 2020 for being the CEO of two publicly listed companies
Twitter Inc on Monday said that Chief Executive Officer Jack Dorsey is stepping down, effective immediately, and Parag Agrawal, the company’s chief technology officer, will become the successor.
Shares of the microblogging platform jumped more than 11% on the news and slumped after that.
Dorsey’s departure news comes when Twitter is trying to launch products and services at a renewed pace after years of criticism that the social media platform had fallen behind larger rivals like Facebook and TikTok in innovation.
Despite the accelerated pace of new features, shares of Twitter have slumped in recent months, adding pressure on Dorsey, who was serving as the CEO of both Twitter and Square, his digital payments processing company, to end his unusual arrangement of leading two companies.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Dorsey said, though he didn’t provide any additional detail on his resignation decision.
However, a source familiar with the matter told Reuters that Dorsey is stepping down now because he feels confident about his successor and will focus on Square and other pursuits such as philanthropy.
The company’s board has been preparing for Dorsey’s departure since last year, the source told Reuters.
Shuffle in the Board
Salesforce President and COO Bret Taylor will become the new Chairman of the Board of Twitter, replacing Patrick Pichette, a former Google executive, the social media platform said in a statement.
Pichette will remain on the board as the chair of the Audit Committee.
Although Dorsey is resigning from his position, he will remain a board member until his term expires at the 2022 meeting of stockholders.
Agrawal will have to face Twitter’s aggressive expansion goals, which the company announced earlier this year. The microblogging platform aims to have 315 million monetizable daily active users (DAUs) by the end of 2023 and to at least double its annual revenue in that year.
Agarwal’s background
Agrawal, who’s served as Twitter’s CTO since 2017, has been with the company for more than a decade. He had been in charge of strategies involving artificial intelligence and machine learning and led projects to make tweets in users’ timelines more relevant to them using AI.
Before joining Twitter, Agrawal held research internships at AT&T, Microsoft, and Yahoo.
In an email to Twitter, which he posted on the social media platform, Dorsey said that Agrawal has been his choice to lead the company “for some time given how deeply he understands the company and its needs.”
Complains against Dorsey
Dorsey co-founded Twitter in 2006 and became the CEO the following year.
He served as CEO until 2008 before being pushed out of the role by co-founder Ev Williams and board member Fred Wilson after determining that he was unfit to lead the company.
However, after years of stagnant growth and a slumping share price, Dorsey returned as CEO in 2015 while leading Square, after former CEO Dick Costolo stepped down from Twitter.
In early 2020, Dorsey faced ousting from Twitter stakeholder Elliott Management Corp.
Elliott Management founder and billionaire investor Paul Singer had wondered whether Dorsey should run both publicly listed companies, calling for him to step down as CEO of one of them, arguing that he was paying too little attention to Twitter while also running Square.
Dorsey fended off the pressure by giving Elliott and its ally, buyout firm Silver Lake Partners, seats on Twitter’s board.
While Twitter shares have jumped 85% since Dorsey took over as CEO on October 5, 2015, shares of Square Inc have surged 1,566% since its November 19, 2015, public debut.
Picture Credit: LA Times