The company plans to offer a liquidity event roughly a year from now, in which employees can cash out some of their equity, the email shows.
Twitter Offers New Equity Grants to Staff
New stock will start to vest after six months, according to an email
By Alexa Corse
Wall Street Journal
Updated March 25, 2023 12:12 pm ET
Twitter Inc. is offering new equity grants to staff that will start to vest after six months, according to an email sent late Friday that was viewed by The Wall Street Journal.
The company plans to offer a liquidity event roughly a year from now, in which employees can cash out some of their equity, the email shows. The number of employees who received the equity grants and the value of the shares couldn’t be learned.
Compensation has been one of many questions facing employees since Elon Musk’s tumultuous acquisition of Twitter last year. Twitter typically offered stock grants, which vested over several years, as part of employees’ compensation, according to former employees. Stock-based compensation has been a popular way to attract talent at many tech companies.
In response to a request for comment, Twitter’s press email responded with a poop emoji, which Mr. Musk recently tweeted will be the company’s auto-response for media inquiries.
The new grants will vest over four years, according to the email, and be in addition to and separate from any legacy Twitter equity that was converted to cash at the time of the acquisition in October 2022.
Twitter spent nearly $630 million on stock-based compensation in 2021, the last full year it publicly reported financial results before going private, according to regulatory filings. The company had more than 7,500 full-time employees that year.
Multiple rounds of layoffs and other departures followed Mr. Musk’s acquisition, and the company hasn’t said exactly how many employees it now has. Mr. Musk said in December the staff was down to roughly 2,000.
When Mr. Musk took Twitter private for $44 billion in October, the company said employees’ stock grants would be converted into the right to receive cash for $54.20 a share, the acquisition price, according to a regulatory filing.
But employees still had questions about how Twitter would handle compensation going forward as a private company.
In February, Mr. Musk told staff in an email that Twitter would make “very significant stock and other compensation awards, based on performance.” Staff would get more information on March 24, he said, according to that email viewed by the Journal.
It wasn’t the first time Mr. Musk mentioned compensation. He previously told staff in November that Twitter would continue to provide stock and said the plan would be similar to what SpaceX offers, according to an email seen by the Journal. “Exceptional amounts of stock will be awarded for exceptional performance,” Mr. Musk added.
Space Exploration Technologies Corp., the formal name for Mr. Musk’s rocket and satellite company, for years has used company stock to attract and pay employees. Because SpaceX is privately held, staffers who own shares eligible for sale can’t find a buyer for them the way that investors who hold stock in public companies are able to do.
Instead, SpaceX periodically invites current and former employees to sell their shares if they choose, giving them the chance to potentially monetize their holdings. The company sets a total value of shares that can be sold in the offerings, and it isn’t guaranteed that someone who wants to cash out stock will be able to do so or sell all of the shares they want, former employees have said.
“We have been able to give employees liquidity,” Gwynne Shotwell, SpaceX’s president, said at an industry event in February.
SpaceX’s valuation has risen over the years, allowing employees and former staffers to reap significant gains if they sold. A recent offering looked to value the company at around $140 billion, up almost fivefold from 2018, when SpaceX worked on a funding round designed to value it at $30.5 billion.
Micah Maidenberg contributed to this article.
Write to Alexa Corse at alexa.corse@wsj.com
Twitter Offers New Equity Grants to Staff - WSJ |
