Jack Dorsey, the co-founder of Twitter, stepped down as chief executive on Monday, as the social network appointed chief technology officer Parag Agrawal as his successor.
Dorsey, 45, gave no explanation for his resignation but said the company was “ready to move on from its founders”. In an email to staff, he said he had a “bone deep” trust in Agrawal, who joined Twitter 10 years ago as a software engineer and worked his way up.
The succession had been planned for more than a year, said one person familiar with the process, as part of a truce between Twitter and the activist investor Elliott Management, which had pushed for Dorsey’s removal.
“This has been in the works for a while. It was part of a long-held plan,” the person said. In a regulatory filing from November 2020, Twitter noted that it had “updated the CEO succession plan in line with best practices”.
Twitter’s share price was flat in midday trading in New York. It had jumped as much as 10 per cent in pre-market trading after the news broke on CNBC.
While Agrawal will immediately become chief executive, Dorsey said he would remain on the board until his term expires in the middle of next year to help with the transition. Bret Taylor, Salesforce’s president and chief operating officer, will become the new chair of the board.
Elliott opened fire on Dorsey nearly two years ago, arguing that he had become distracted by his other job as the chief executive of payments company Square, and by his other interests, including bitcoin.
The hedge fund, which built a 4 per cent stake in Twitter, tried to remove Dorsey after he said he planned to spend at least half his year in Africa exploring opportunities in cryptocurrencies, a trip that was later cancelled.
“I have enough flexibility in my schedule to focus on the most important things and I have a good sense of what is critical in both companies,” Dorsey said in his defence at the Morgan Stanley conference in San Francisco in March. Square said on Monday that Dorsey would continue to be its chief executive.
It was eventually agreed by a committee of stakeholders that Dorsey could stay in place if he met challenging performance targets, while Elliott continued to push to have him replaced through a more formal succession process behind the scenes, according to a person familiar with the situation.
Dorsey, who co-founded Twitter in 2006, was fired before as chief executive in 2008, when prominent board member Fred Wilson declared him unfit to lead the company.
The board reportedly cited a habit of Dorsey — an eccentric leader who has been dubbed Silicon Valley’s answer to Gwyneth Paltrow — of leaving early to attend yoga classes as one of the reasons for the move. Dorsey stayed on as chair but returned to Twitter as chief executive in 2015, after his predecessor Dick Costolo resigned.
For Dorsey, his return to Twitter was akin to Steve Jobs’ return to Apple in 1997, with the added mission of having to turn around a company that lacked a clear vision on how to deal with an increasingly competitive social media world as rivals Snapchat and TikTok grew in popularity.
During his second spell in charge, he faced multiple grillings by US regulators over his approach to free speech, particularly after he oversaw the banning of former president Donald Trump from the platform in the wake of the Capitol riots on January 6.
One shareholder expressed concerns that Twitter would withdraw its prior earnings guidance with a new chief executive, but the company said there would be “no changes” to its full-year outlook or its 2023 goals.
Another large shareholder said Dorsey was able to make big strategic changes such as removing sacred cows including Twitter’s chronological feed and its 140-character limit for tweets. But as his wealth in Square soared and he considered a move to Africa, his engagement waned.
Dorsey owns a 13 per cent stake in Square, compared with his 2 per cent stake in Twitter. Twitter’s advertising revenues grew 14 per cent last year to $2.99bn, a slowdown from the 24 per cent growth of the previous year.
“It is a bit like football club managers: very few people will sing their names once they have left the club. Jack Dorsey will leave like a bit of an Alex Ferguson figure because he has probably underachieved but is still thought of very fondly by staff,” said Bruce Daisley, former European vice-president of Twitter.
He added that Agrawal, a PhD graduate in computer science from Stanford University was a “formidably intelligent egoless presence”. But he said Agrawal was not the “silver-tongued Silicon Valley-type” or a graceful communicator.
Another former senior Twitter employee agreed that the new CEO was not a “hard-nosed”, commercially-driven leader, adding that he was instead likely to continue Dorsey’s efforts to embrace digital assets and other decentralised products to the platform.
“He’s very heady and cerebral — he’s not going to be a bombastic Amazon CEO,” the person said. “I see it as a validation of Jack’s approach to leadership inside the company.”