Twitter announced Monday that its CEO, Jack Dorsey, is stepping down from his executive role and will be replaced by the company’s chief technology officer, Parag Agrawal.
Dorsey will remain on Twitter’s board of directors until his term expires at the 2022 annual meeting, the company said in a statement.
Salesforce president and COO Bret Taylor, who’s been a member of the Twitter Board since 2016, will take over as chairman of the board.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders. 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,” said Dorsey.
Agrawal has been with Twitter for more than a decade and has served as Chief Technology Officer since 2017.
He has led various projects, including ones that touch on artificial intelligence and machine learning strategy as well as how to make tweets in users’ timelines more relevant to them.
Agrawal was previously tasked with finding a leader for Project Bluesky, a research project that was important to Dorsey’s vision of greater collaboration between social media giants.
The project seeks to establish open and decentralized standards for platforms on how to promote certain posts.
“I want to thank the Board for their confidence in my leadership and Jack for his continued mentorship, support, and partnership,” Agrawal said in a statement.
“I look forward to building on everything we have accomplished under Jack’s leadership and I am incredibly energized by the opportunities ahead.”
Critics of Dorsey have long been skeptical of his dual roles as CEO of both Twitter and payment-processing firm Square, charging that he can’t effectively manage both multi-billion dollar companies.
Elliott Management, the New York-based hedge fund run by billionaire Paul Singer, has previously disclosed a substantial stake in Twitter.
In 2020, the hedge fund sought to replace Dorsey as CEO and force the company to make other changes to its corporate structure.
Twitter and Elliott later reached an agreement that saw Dorsey keep his job. At the same time, Twitter agreed to add three new directors to its board and laid out an aggressive multi-year growth plan that includes doubling annual revenue by 2023.
Agrawal will now be tasked with hitting those lofty targets. In a statement, Elliott’s managing partner Jesse Cohn and senior portfolio manager Marc Steinberg said they believe he’s the right man for the job.
“Having gotten to know both incoming Chairman Bret Taylor and incoming CEO Parag Agrawal, we are confident that they are the right leaders for Twitter at this pivotal moment for the company,” they said.
In an email to staff that he later shared on Twitter, Agrawal said he believes the multiyear plan established with Elliott is the right path.
“We recently updated our strategy to hit ambitious goals, and I believe that strategy to be bold and right.
But our critical challenge is how we work to execute against it and deliver results – that’s how we’ll make Twitter the best it can be for our customers, shareholders, and for each of you,” he said.
Dan Ives, managing director at Wedbush Securities, said the appointment of Agrawal, a company insider, as Dorsey’s successor was something of a “safe choice” and follows the succession path of other Big Tech firms like Microsoft and Google.
“It opens up a range of possibilities that Twitter can go after in this social media arms race,” he said in an interview.
“There’s a big focus on the Metaverse if you look at Apple, Facebook, Google and others. Twitter’s been nowhere to be found when it comes to the Metaverse, so that could be one area it could aggressively go after.”
He added that there’s been pressure building on Twitter for years as its stock price has lagged others in the tech sector. He called Agrawal “extremely well respected within the tech community” as well as specifically within Twitter, making him a natural pick.
In a staff-wide email, Dorsey told Twitter employees that he wants to ensure the company can thrive without being led by him, its founder.
He explained there are three reasons why he chose now to step down.
He explained that Agrawal has been his chosen successor “for some time given how deeply he understands the company and its needs.” He applauded the board for unanimously appointing him CEO, effective immediately.
The second, he wrote, is “Bret Taylor agreeing to become our board chair.”
“Having Bret in this leadership role gives me a lot of confidence in the strength of our board going forward,” Dorsey said.
The third reason, he added, is confidence in all of Twitter’s employees.
“I want you all to know that this was my decision and I own it. It was a tough one for me, of course. I love this service and company…and all of you so much.
I’m really sad…yet really happy. There aren’t many companies that get to this level. And there aren’t many founders that choose their company over their own eg. I know we’ll prove this was the right move,” he added.
Shares of the social media company spiked more than 11 percent after CNBC first reported the news. The stock was halted pending an announcement shortly before 10 a.m. at $48.68 per share, up more than 3 percent.
The stock was last seen trading less than 1 percent lower.
Dorsey founded Twitter and first served as chief executive until 2008 when he was pushed out of the role by the board.
Shortly after his ouster, Dorsey founded Square, the company he now also runs alongside Twitter.
He rejoined Twitter as CEO in 2015 after former CEO Dick Costolo stepped down.