According to shareholder activists and corporate governance experts, Elon Musk may change the trajectory of Twitter as management faces a collection of proxy proposals ranging from civil rights to politics at the company’s next annual meeting.
Whatever the result of Musk’s $43 billion effort to purchase Twitter entirely, investors with opposite political views said the billionaire entrepreneur is likely to strive to reverse some of Twitter’s content limitations as it tries to encourage free expression while battling hate speech and misleading information.
Even if he fails to purchase Twitter, Tesla CEO Elon Musk, who just declared a 9.6% ownership in the firm, is expected to vote in ways that might shake up the company at its virtual May 25 meeting, according to sources familiar with the matter.
“I don’t see Musk voting with management very often,” said Brian Bueno of Farient Advisors, a corporate governance and executive pay consulting firm. “Given where Musk has positioned himself relative to Twitter’s strategy and given his desire to be something of a disruptor, I don’t see him voting with management very often.”
Musk said that his $54.20 per share offer price was intended to encourage open discussion. He will have the second-largest share behind Vanguard Group at the virtual meeting, enough to offer any investor a kingmaker role in tight races.
Musk did not react to a request for comment on how he would vote on Twitter right away.
According to Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, Musk’s celebrity will undoubtedly bring a lot of attention to the event. “Because he’s a well-known figure in the heart of it all, it’ll pique people’s interest in voting and might have a major influence,” Elson said.
Although Twitter established a shareholder rights plan on Friday to protect itself against Musk, Elson believes that its influence on voting will be limited, as proxy advisors, who are wary of such “poison pills,” will be more cautious of management.
Twitter is facing five shareholder proposals, all of which are being challenged by management and deal with themes that are attracting a lot of investor interest.
Two of the requests are from conservative organizations, one requesting information on Twitter’s effect on civil rights and the other on its lobbying operations. Musk’s offer is “terrific” for shareholders, according to Scott Shepard, a fellow at the right-leaning National Center for Public Policy Research, one of the sponsors.
Shepard expressed his hope that Musk will steer Twitter away from censorship, and his organization has chastised the firm for actions like as blocking former US President Donald Trump’s account after the storming of the US Capitol, citing the danger of additional instigation of violence.