To the surprise of few people in the business, Twitter on Oct. 5 named interim chief executive and co-founder Jack Dorsey as its permanent CEO.
They’re getting him for a good deal: zero salary. If the culture of a company starts at the top, that’s an interesting statement from the CEO.
“There are currently no plans to provide Mr. Dorsey with direct compensation for his role as chief executive officer,” the company said in the Securities and Exchange Commission affidavit announcing the changes.
Can a man serve two masters with total dedication? That’s a tough assignment for anybody, but Dorsey is going to give it a go.
Dividing His CEO Time
Dorsey (pictured) has been dividing his time for the last three months—since Dick Costolo was excused as CEO July 1—between this interim job and his full-time job as chief exec at mobile payments service Square. He has been a member of Twitter’s board of directors since the company was founded in March 2006.
Costolo led the $17 billion company for five years and took it public in November 2013. He recently left the board of directors, which is in the process of being reformed by Dorsey.
Twitter on Oct. 5 also revealed that Adam Bain will serve as chief operating officer. Bain formerly handled revenue and partnerships.
There aren’t too many executives in the world who can run a company as unusual and difficult to maintain as the huge, mass-messaging social network, so Dorsey, who helped create it, was the only realistic choice. Twitter, it has been reported, didn’t expend a whole lot of effort looking for an outsider for the job.
The nine-year-old company, which spun out of Odeo in 2006 led by co-founder Evan Willliams, has grown each quarter since it started, but that rate has slowed noticeably. It has never been able to extract itself from red ink. From 2006 to 2012, Twitter nearly doubled its number of users each quarter, but as of the first quarter of 2015, growth has leveled off to a mere 18 percent.
Last Count: 500 Million Users
As of May, Twitter claims to have more than 500 million users sending multiple billions of messages per day. The company claims that about 302 million are active users (at least one message per day).
The problem is, Twitter has not been able to adequately monetize its far-reaching influence in people’s lives as a mass Webcaster of news and opinion via 140-character news headlines. Advertising and special placements are successful strategies, but much more is needed to move the company ahead.
Dorsey holds about a 4.7 percent equity stake in Twitter, according to the IPO documents the company filed in the fall of 2013. Dorsey owns about 22.2 million shares that are worth a total of more than $600 million, based on the Oct. 5 stock price of about $27.50.
Dorsey undoubtedly isn’t worried too much about drawing a salary from Twitter, which is trying to find ways to trim costs. Dorsey is already a billionaire due to the success of Square, a mobile payment service to which thousands of small and midsize businesses subscribe each month. Forbes estimates his total net worth at $1.5 billion, up from $1.3 billion in 2014.
Dorsey has his hands full. Square, which he co-founded in 2009, is reportedly preparing for a public offering sometime this fall. Square insiders are confident that Dorsey plans to stay as CEO, even as he tries to lead Twitter out of its financial doldrums.
Avoids Question About Leading Two Companies at Same Time
In an investor call Oct. 5, Dorsey avoided a question about how he will split time between the two companies.
Dorsey did say: “We’ve been reviewing our road map to make sure that we make Twitter easier to everyone around the world. There’s a lot of initiatives aimed at making sure that people can immediately get value out of Twitter.”
One of them is Project Lightning, Twitter’s scheme to show relevant live content to casual users. “We’ve been playing with [Lightning] internally for quite some time and it feels amazing,” Dorsey said.
We can expect other Twitter projects and products to come to the fore in the near future. Same thing at Square.
Hopefully, for his sake, Dorsey will be able to Square up his time adequately to make decisions on a daily level for two very different companies and their high demands.