Can Elon Musk Fire Twitter's Board—and Will He?

Rachel Curry - Author
By

Apr. 28 2022, Published 2:59 p.m. ET

After inking a $44 billion deal to buy Twitter Inc. (TWTR), tech billionaire Elon Musk is looking to make some changes to the platform. Most notably, he wants to incorporate more free speech into the platform, though it’s unclear what that means and where Musk would draw the limits (if any).

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However, Musk’s Twitter buyout will also likely lead to changes in the company’s organizational structure. Will Musk fire the Twitter board—and can he even do that?

Elon Musk’s Twitter buyout expected to close later this year.

Musk’s Twitter acquisition is expected to close later this year. Both he and Twitter have until Oct. 24 to pull out. Depending on the deal’s progression, that date could get pushed back up to six months. The transaction must face regulatory scrutiny, particularly from antitrust and foreign investment regulators.

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How much power over Twitter will Elon Musk have?

Musk is Twitter’s largest outside shareholder with a 9.2 percent stake. That gives him significant voting power on Twitter’s corporate matters. Board members are a common voting matter, with shareholders of public companies able to vote on reappointment or new appointment of certain board members.

Musk could use his voting power to sway the company’s board makeup. He doesn’t necessarily need to own Twitter to have that influence given his existing majority stake. However, ownership is likely to come with some sort of equity deal that would only increase his power over Twitter. As a result, it’s possible Musk could impact Twitter’s board members and other executives.

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Twitter employees suggest an uncertain future with Musk.

Twitter Chairman Bret Taylor is skeptical of what will happen to the company once the deal closes. Reports suggest Taylor thinks it’s possible the 11-member board could dissolve completely, with just Musk (and potentially his own chosen cohorts) leading the charge.

Even Twitter CEO Parag Agrawal doesn’t know what’s to come for his employees or his own role. At a team meeting on Apr. 25, Agrawal said there will be no layoffs at this time and he’ll stay on as CEO at least until the deal finalizes. “This is a period of uncertainty,” Agrawal emphasized. In short, the future of Twitter is a bit like the Wild West.

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There are clues that Musk would replace Agrawal. When the CEO was first appointed after founder Jack Dorsey’s departure in late 2021, Musk tweeted about Agrawal. He even made a meme about him, showcasing a dictator-like leadership. Agrawal has been vocal about his support for censorship on the platform, while Musk is more a fan of unfettered free speech.

Lower employees have admitted to job hunting since news of the buyout came to light. A Twitter employee who spoke with Market Realist under the condition of anonymity said, "given that there is a loss from taking the company private, we are afraid of being laid off. But they haven’t given a direct answer about that.”

The source added, "There is a general lack of transparency between the higher-ups and lower staff.”

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Most employees found out about the deal the same way the general public did — through the media. "People were texting me asking if it was true, and then I saw Elon’s tweet and I knew it was real,” the source said.

There is even talk of an employee exodus, according to Insider.

If Musk were to take Twitter from public to private, he’d have even more control over the company. Without public market investors, there are less stakeholders and more of an opportunity to change the company’s direction.

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