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@Jack Is Back: Twitter’s New CEO Finds Himself in Rare Company
October 7, 2015
After months of speculation, Twitter named its new CEO this week—the company’s co-founder (and former CEO) Jack Dorsey.
Following several quarters of slowing user growth, pressure on Twitter from its investors and from Wall Street in general
reached a pinnacle. In June, Dick Costolo stepped down after five years at the helm and seeing the company through its
IPO in 2013. After three months as its interim CEO, Dorsey is now officially Twitter’s Chief Executive, again.
Aside from the unusual fact that he is now on his second term as Twitter’s CEO in less than a decade, Dorsey finds himself
in rare company compared to his CEO peers. Equilar crunched the numbers on his compensation and board service and discovered
some unique traits.
Dorsey will receive no direct compensation, per
Twitter’s SEC filing. According to Equilar’s research, there are only five other CEOs in the S&P 500 that received no direct
compensation in fiscal year 2014—Kosta Kartsotis of Fossil Group, Richard Kinder of Kinder Morgan, John Mackey of Whole Foods,
Larry Page of Google, and Mark Zuckerberg of Facebook. In 2014, Dick Costolo received just $13,892 in salary as Twitter’s CEO, a
reduction from the $130,250 he earned in 2013.
In the post-Dodd-Frank era of “Say on Pay” and pay for performance, it is increasingly common for companies to link CEO pay
with predetermined performance goals over an extended period; however, founders with significant equity holdings already
have a vested interest in optimizing company performance and returning maximum gains to shareholders over the long haul.
In doing so at Twitter, Dorsey would realize significant indirect compensation.
Indeed, among Twitter’s Board of Directors, Dorsey has the second largest stake in the company next to Evan Williams,
according to Equilar’s BoardEdge. As of FYE 2014, Dorsey had $854.6 million
ownership interest in the company, compared to $1.8 billion for Williams. Costolo had $288.4 million in ownership equity at FYE 2014.
With respect to board composition, these recent moves also mean that Twitter also relinquishes a unique attribute. Prior
to this week’s announcement, Twitter had three former CEOs on its board of directors, a trait shared by no other company
in the S&P 500, according to Equilar research. Thirteen companies had two ex-CEO directors, and 102 had one. With Dorsey’s
new status as current CEO and Costolo’s decision to step down, Twitter now has just one former CEO on its board.
And that’s even mentioning the fact that Dorsey is still CEO of Square, joining the late Steve Jobs (Pixar, in addition to
Apple) and Elon Musk (Tesla and SpaceX) among several other high-profile double-CEOs.
For more information on executive compensation and board composition data, please contact Dan Marcec, Director of
Content & Marketing Communications at at dmarcec@equilar.com.