Twitter Investors Hold Elon Musk Allies To Enter Twitter Board, Acquisition Still Complicated

JAKARTA Investors Twitter Inc blocked the re-election of allies Elon Musk from entering the Twitter board at its annual meeting on Wednesday, May 25. This avoids the biggest question for the social media company: will it complete the $44 billion sale to the world's richest man?

Investors voted against Egon Durban, co-head of private equity firm Silver Lake, who partnered with Tesla CEO Elon Musk on his bid. Durban, who joined the board in 2020, comes as uncertainty looms over the deal.

Musk tweeted on May 13 stating that the Twitter deal was "temporarily on hold", while he sought more information about the proportion of fake accounts on Twitter.

Twitter itself last week said it remained committed to the deal at a pre-agreed price. On Wednesday they said they would not answer questions about the deal at a virtual meeting.

"The Twitter board has not embraced Elon Musk and his vision for Twitter. So the fact that an ally has been removed from the board is not surprising," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

Twitter's board initially voted to adopt a "poison pill" that limited Musk's ability to increase his stake in the company. But then chose unanimously to accept his purchase offer.

The vote could show skepticism among shareholders about Musk's plans or his willingness to pay for what he's offering. But investors are expected to strongly agree to the deal at another meeting yet to be scheduled.

Several shareholders who submitted proposals at the meeting appealed directly to Musk in their presentations.

"Mr Musk, if you're listening, we hope you'll join us in voting for this proposal," said Ethan Peck, associate at the National Center for Public Policy Research, who asked Twitter to conduct an audit of the impact on civil rights.

According to preliminary voting results from the meeting, Investors chose to report on election spending and the risks of using concealment clauses, such as non-disclosure agreements,

Many advocates say that companies aiming to stop sexual harassment and similar issues should allow workers to discuss the issue publicly, which is often not possible with a concealment clause.

However, shareholders vote against the annual director election, or declassify the board, which would make members more accountable for investor approval. The current term is multi-year and staggered, preventing sudden major changes.

Shareholders followed management's advice to vote against other proposals, including one that would commission a report on corporate lobbying spending. They again elected Patrick Pichette, general partner at Inovia Capital, to the board.