Revealed: Stock Compensation at Twitter

Casey Fenton

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September 2, 2023

You've probably heard the buzz about Elon Musk's takeover of Twitter—maybe from the iconic blue bird itself. But what does this mean for the social media giant’s employees and their Twitter stock based compensation? Let's dive in and get the lowdown on this juicy development that also has to do with retail tracking technology's hand.

As we know, Twitter is a major player in the world of social media. But with the recent news of Elon Musk's Twitter TakeOver, the platform’s employees and the prime member hwo can unlock premium technology stories are understandably curious about what's in store for them, triggering the idea that Twitter going out of business or only the desktop site can be accessible could also be a well-founded rumor.

In the midst of all this, stock based compensation is once again put into the limelight, as employees and the ET Prime member weigh in on the sale of Twitter and its potential impact on their stock awards, which they are building up on for their financial future while Prime provide insight.

So, what's the deal with Twitter's stock options? Well firstly, the acquisition could result in a change to Twitter compensation structure. This could have significant implications for employees' stock options, restricted stock units (RSUs), and other forms of equity compensation. Stock awards could be affected in various ways, depending on the terms and conditions of the acquisition and the ET Prime experience.

As employees eagerly await more information, their stock awards become a key focus. With the potential change in ownership and now unlimited access to certain features, employees may be wondering how their stock awards will be impacted and what it means for their overall stock based compensation package—from its market value to possible tax implications.

After all, it’s crucial for them to stay updated on any developments related to the acquisition to make informed decisions about how they can optimize or cash out their stock awards.

The fate of the employees’ stock awards could be a significant factor in their financial planning, and it's important for them to understand any changes that may occur as a result of the acquisition. Keeping a close eye on the situation and staying informed about the impact on stock awards will be crucial for employees at Twitter during this period of transition.

The Takeover of Twitter by Elon Musk

Twitter, one of the leading social media platforms that offer annual international subscription, has been making headlines recently due to its acquisition by Tesla and SpaceX CEO, Elon Musk.

From Harvard Business Review level to exclusive Economic Times stories, everyone at the leading media houses has come up with their own prime story about the latest Twitter buzz on Musk’s buy-out and the employee stock ownership plans and prime access tied to it. 

And why not? Although the news is a refreshing demonstration of powers at play and prime reserves in the fintech and internet economy, even an entertainment industry analyst with prime subscription caught wind of the issue and now it’s a full-blown debate on whether the employees awarded Twitter stock plans see a positive financial outlook after the acquisition. They are also discussing Prime's liability on the matter.

This unexpected move has left many wondering what is happening at Twitter and how it will impact the company's employees and stockholders, especially since the socmed giant is known to have offered stock based compensation packages, Prime coupon code, times Prime coupon code, and complimentary times Prime membership to its employees that indicate their stake at the company when their stock options vest.

How Did Elon Musk Take Over Twitter? According To A Senior Editor Newsroom Leader…

Elon Musk's acquisition of Twitter has been the talk of the town in the tech world that every executive editor, Prime's rewrite team, and senior staff writer raced against each other to break the news regarding ET Prime's liability, among other matters related to ET Prime subscription and ET Prime membership.

When people learned who’s gonna turn Twitter private, everyone wants in on the tea about what the ongoing compensation plan for employees is going to look like with a famous business visionary at the helm.

Musk, known for his bold moves and ambitious projects as revealed by his innovative electric vehicle brand that many journalists rave about, has purchased Twitter through a multi-billion dollar deal. Naturally, this gives him a controlling stake in the company. 

Turns out, Musk has managed to secure a whopping $46.5 billion in financing to buy Twitter, and get this—sources from the ET Prime community and primarily global news outlets have reported that he's mostly doing it with borrowed money!

According to the senior associate editor at NBC, a group of banks led by Morgan Stanley lent Musk $25.5 billion, including a loan of $12.5 billion against the value of his Tesla shares. Musk himself is putting up $21 billion in equity financing for the potential acquisition.

Talk about a bold move that people with prime membership are concerned about.

No wonder ET Prime members subscribed to the Prime Story were astounded, as is the rest of the internet universe.

The specifics of how Musk was able to take over Twitter have not been disclosed publicly until recently, but his acquisition of Twitter has caused a stir in the industry as early as late 2022. Even digital content creator academics have produced Youtube videos lamenting the possible plight of Twitter employees who were awarded stock based compensation plans upon joining the socmed company.

Why Has Elon Bought Twitter?

The reasons behind Elon Musk's purchase of Twitter and making the company private are not entirely clear. Some speculate that Musk sees potential in Twitter as a platform for sharing news and information related to his companies, Tesla and SpaceX. Others that have tried to pitch in their analysts unbiased perspective believe that Musk may have strategic plans to leverage Twitter's massive user base for his future projects.

Nevertheless, his switching of Twitter private through acquisition has raised eyebrows and sparked curiosity among investors and industry observers alike, as this triggered in depth stock reports out of concern for Twitter employees.

That’s where the stock awards and stock options in Twitter's equity compensation program enter the scene. Stock awards are like freebies of company stock given to employees, but they usually come with some conditions like vesting requirements.

And stock options give employees the right to buy company stock at a set price within a certain timeframe.

Now, with Elon Musk buying Twitter and making the company private, employees might be wondering what's gonna happen to their stock awards and stock options (might even include RSUs).

When a company goes private through acquisition, things can get shaken up, including changes to equity compensation. This could mean tweaks to the value or terms of existing stock awards and stock options, or even the possibility of them being canceled or replaced.

So, you can imagine why employees at Twitter might be keeping a close eye on the situation. Changes to their stock based compensation could impact their bank accounts and future financial plans, after all. 

Since these are very significant stock awards, the employees might want to get the scoop from the company or other relevant sources such as articles written by a senior assistant editor and staff news writers for ET Prime content to understand how the acquisition might affect their stock awards, and make informed decisions about their ongoing compensation plan structure.

Just remember, the specifics of any changes to the stock based compensation would depend on the acquisition deal and decisions made by the bigwigs like Elon Musk or other players involved.

How Much Did Elon Musk Pay for Twitter?

The exact amount that Elon Musk paid for Twitter has not been disclosed publicly in early 2022, although it was later revealed in one of prime articles by some senior staff writer at The New York Times that he has spent roughly $44 billion.

However, since it’s a billion-dollar deal, the high-profile transaction gave Musk a controlling stake in the company. But why are leaders in tech industry (any senior assistant editor, senior graphics designer, or vice president even would) as well as some at the ET Prime community, among many others, too invested in this buy-out?

The answer: apparently, Elon Musk used a tactic called leveraged buy-out (LBO) with Twitter’s publicly listed stocks as collateral—some of which belongs to the Twitter employees who have received stock based compensation prior to the acquisition. 

The reports from NPR may contain such a strong perspective on this issue, but even an auto analyst journalist strolling by the news portals with prime community exclusive invites could even have their own take, especially since part of the funds that helped Musk buy Twitter comes from the sale of Tesla stock in December 2022. Even the executive editor of Forbes who has been into a prime members only event could confirm this.

Why is Elon Musk laying off Twitter employees?

Following the acquisition and making Twitter private, there have been reports of layoffs at the company. Many a principal analyst have already predicted such cases as most buyouts, specifically those involving high stakes, often necessitate cost-cutting measures and compensation restructuring. 

As a result, Twitter employees faced job losses, which has caused concern and uncertainty among the remaining workforce. Meanwhile, Musk reportedly told senior leaders and retained Twitter employees that they still can receive stock options as part of the ongoing stock based compensation plan amidst the rapidly changing business environment at the social media company.

Additionally, with Twitter starting to lose allure with some news publishers like ET Prime, CNN, and the like, its existing employees face future threats of layoffs. This is because Twitter has become the only desktop site that served as the main information platform that drives traffic to their respective websites, an associate editor at ET Prime reports.

What Happens to the Stock Awards of Twitter Employees?

With Elon Musk turning Twitter private, there are questions about the impact on the stock based compensation of Twitter employees. As you may have already known, tech companies especially startups highly prefer equity or stock based compensation plans such as stock options and restricted stock units (RSUs) for their aligning quality and representation of company ownership, which are vital to today’s talent acquisition and retention trends. 

In fact, many a technology news site report that Twitter is one of the top tech companies highly reliant on equity payouts, recording a roughly $459.5 million in stock based compensation expense in 2022.

As a refresher, stock-based compensation expense is all about the money a company spends on giving out stock based compensation like stock options, RSUs, or other perks to its employees. Unfortunately for a company, it's not free. The company usually recognizes this cost as an expense in their financial statements over time, during what's called the "vesting period" of the stock awards.

So, it's not just a free ride for the company, they have to account for it in their books. Any senior project manager monitoring the equity compensation plans can attest to the accumulating value of this stock based compensation expense.

However, just like a senior editor notes through their staff writer, making Twitter private and the management change of hands reestablished the fate of the stock based compensation awarded to Twitter employees long before Musk entered the picture.

With Twitter’s stock being delisted from the New York Stock Exchange, it triggered the cash out of shares that Twitter employees already have on top of being paid with cash bonuses moving forward. 

In other words, if Musk would honor the merger agreement, the stock based compensation would be paid for the stocks that vested beginning November 2022 as a result of Musk turning Twitter private and delisting it from public markets. 

But some assistant editor from a national media outlet has reported that despite the recent massive layoffs of Twitter employees, Musk promised to start paying the vested shares triggered by the move to make Twitter private through acquisition.

Another growth editor author in the niche of consumer internet unravelling stories also reported that Musk is eyeing significant stock options awards to incentivize top performance of Twitter employees, probably from senior vice president of marketing down to the content moderators. With such strong perspective on equity compensation, many are hoping to receive very significant stock awards for their dedication to the platform.

How Will The Takeover Affect Twitter RSUs?

Twitter RSUs, which are a form of stock based compensation granted to Twitter employees, may be affected by the takeover and Musk making Twitter private. Changes in ownership and management could potentially impact the vesting schedule, valuation, and future performance of Twitter RSUs.

Twitter employees who hold RSUs may be watching closely to see how the acquisition by Elon Musk will impact their stock based compensation.

What Happens to Twitter Restricted Stock Unit?

Restricted Stock Units (RSUs) are commonly used particularly by tech companies like Twitter to incentivize and retain employees. With Twitter going private, there may be uncertainties surrounding the fate of RSUs granted to Twitter employees.

The terms and conditions of RSUs, such as vesting and valuation including company’s stock price, may be subject to changes, and Twitter employees may be eager to understand the implications of the acquisition on their RSUs—and perhaps not the obligation to just sit around and wait for any development.

What Is The History of RSUs on Twitter?

RSUs have been a significant component of Twitter's stock based compensation strategy, allowing Twitter employees to share in the company's growth and success. Over the years, RSUs have been granted to eligible Twitter employees as a form of long-term incentive and retention tool.

However, with the acquisition of Twitter by Elon Musk, the future of RSUs at the socmed company may be uncertain, and Twitter employees may be keeping a close eye on developing news.

What Happens to Employees Who Have Vested RSUs?

Twitter employees who have vested RSUs, meaning their restricted stock options have reached the end of the vesting period and have become fully granted, may have questions about what will happen to their RSUs with the acquisition of Twitter by Elon Musk. 

The fate of vested RSUs may depend on the specific terms and conditions of the RSU grants, key data points, as well as any changes that may occur due to the transfer of ownership and change of management.

Twitter employees who have vested RSUs may need to closely monitor updates and communications from Twitter and Elon Musk himself to understand the implications for their RSUs and any actions they may need to take.

Will There Be Any Changes to the Vesting Schedule for RSUs?

Tech companies said that as the ownership and management of Twitter transition to Elon Musk, there may be potential changes to the vesting schedule of RSUs for Twitter employees. The vesting schedule outlines the timeline and conditions under which RSUs become fully granted and can be converted into company stock.

Changes to the vesting schedule could impact the timing and availability of the restricted stock options for Twitter employees, and may require them to review and adjust their financial planning accordingly.

The Future of Stock Based Compensation at Twitter

Indeed, with all the hullabaloo in the tech space, the recent acquisition of Twitter by Elon Musk has raised numerous questions and uncertainties for Twitter employees and stockholders.

While the specifics of Musk’s intentions for the company and the impact on employees' stock based compensation remain unclear, Twitter employees may need to closely monitor updates, seek guidance from financial advisors, and stay informed about any potential changes to their compensation and stock awards.

As experts in equity compensation plans, we at Upstock can help your company avoid pitfalls during critical times of the business such as this. To know more about how our RSUs support the idea employee ownership and goals alignment, just shoot us a message to get in touch with our representative.

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ABOUT THE AUTHOR

Casey Fenton

Founder, Upstock & Couchsurfing, AI and Equity Innovator

Casey Fenton, the founder of Upstock & Couchsurfing and an AI and equity innovator, has revolutionized how we perceive and implement equity in the workplace. His foresight in creating platforms that not only connect people but also align their interests towards communal and corporate prosperity has established him as a pivotal figure in technology and community building. Casey speaks worldwide on topics including ownership mindset, worker equity, With Upstock and Couchsurfing, he has demonstrated an unparalleled expertise in harnessing technology for the betterment of community interaction and organizational benefits.

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