Jack Dorsey, the co-founder and chief executive officer of Twitter Inc., is stepping down from the helm of the social network, ceding the position to Chief Technology Officer Parag Agrawal.
Dorsey will stay on the board of the San Francisco-based company until his term expires in 2022, Twitter said in a statement Monday. Agrawal, who became CTO in 2017, is also joining the board, and director Bret Taylor was named independent chairman.
“The company is ready to move on from its founders,” Dorsey said in the statement. “My trust in Parag as Twitter’s CEO is deep. His work over the past 10 years has been transformational. I’m deeply grateful for his skill, heart and soul. It’s his time to lead.”
The 45-year-old Dorsey is also the head of payments company Square Inc., and has been focusing more of his attention on cryptocurrencies, particularly Bitcoin, in recent years. After co-founding Twitter in 2006, he stepped down as CEO in 2008, then returned to the job in 2015. He will continue running Square, according to a company spokesperson.
Dorsey’s departure marks the end of a complicated and eventful six-year run at the helm, which featured an attempted sale of the company, a business turnaround that saw Twitter reach profitability, and an effort by activist investors to boot Dorsey from his job. When Dorsey returned as CEO, many analysts and investors predicted that he would eventually leave Square and run Twitter full-time. But Dorsey instead stuck to a hands-off management style to run both companies for years.
While Twitter’s business has improved since Dorsey took over — Twitter’s user base, which was once shrinking, has been growing steadily for years — the company hasn’t delivered the same kind of returns as peers like Snap Inc. and Facebook owner Meta Platforms Inc. Twitter stock has climbed 67% since Dorsey’s return in 2015. Meta stock is up 260% in that same period.
“The headline takeaway here is Twitter’s execution,” said Mandeep Singh, an analyst at Bloomberg Intelligence. “When you compare Twitter to all the other social media platforms, the level of engagement they had, they never were able to monetize it as well as some” rivals, he said. “Investors recognize having one man be the CEO of two companies wasn’t very effective in terms of execution.”
In early 2020, Dorsey came under attack by activist investor Elliott Management Corp., which criticized Twitter’s performance and how the CEO was spending his time. A year earlier, Dorsey had said he planned to spend as much as six months of the year working in Africa to better understand the continent’s internet users, a move that was ultimately scrapped because of the Covid-19 pandemic.
The hedge fund reached an agreement with Twitter and private equity group Silver Lake in March 2020 to appoint three new directors to Twitter’s board and create a committee to review its leadership and governance.
That arrangement with Elliott came at a cost, though: Twitter was required to increase its monetized daily users by 20% or more and boost revenue growth. Dorsey was at risk of losing his position if those goals weren’t met, Bloomberg reported. In November 2020, the committee concluded that Dorsey should maintain his role.