Elon Musk deals Twitter a wild card as shareholders seek reforms

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By Ross Kerber and Sheila Dang

(Reuters) -Elon Musk, Twitter’s latest massive shareholder, might alter the course of the social media firm as administration battles a set of proxy proposals centered on subjects from civil rights to politics at its upcoming annual assembly, shareholder activists and company governance specialists stated.

Regardless of the final result of Musk’s bid to purchase Twitter outright introduced Thursday, buyers with opposing political opinions described the billionaire entrepreneur as prone to work to undo a number of the restrictions on content material that Twitter has imposed because it makes an attempt to advertise free speech whereas combating hate speech and false data.

Even when he fails to purchase Twitter, the Tesla CEO, who lately disclosed a 9.6% stake, is seen as prone to vote in ways in which might shake up the corporate at its digital Might 25 assembly, stated individuals who comply with company governance points.

“Given the place Musk has positioned himself relative to the technique of Twitter and given he needs to be one thing of a disrupter, I don’t see him voting with administration fairly often,” stated Brian Bueno of Farient Advisors, a company governance and government pay consulting agency.

Musk stated his provide value of $54.20 per share was meant to advertise open discourse. On the digital assembly, he’ll management the second-largest stake after Vanguard Group, sufficient to offer both investor a kingmaker function in shut contests.

Musk didn’t instantly reply to requests for touch upon how he would possibly vote at Twitter.

Musk’s star energy will doubtless draw a lot consideration to occasion, stated Charles Elson, founding director of the Weinberg Heart for Company Governance on the College of Delaware. “He is a widely known particular person in the course of all this, so it’s going to enhance the curiosity in voting and will have a big effect,” Elson stated.

Though Twitter on Friday adopted a shareholder rights plan to defend itself in opposition to Musk, Elson stated its affect on the voting would possibly solely be to make proxy advisers, which are likely to frown on such so-called “poison drugs,” extra skeptical of administration.

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Twitter faces 5 shareholder proposals, all opposed by administration, coping with subjects drawing a lot investor consideration.

Two are from conservative teams, one asking Twitter to report on its affect on civil rights and the opposite on its lobbying actions. Scott Shepard, a fellow on the right-leaning Nationwide Heart for Public Coverage Analysis suppose tank, one of many sponsors, known as Musk’s provide “terrific” for shareholders.

Shepard stated he hoped Musk would flip Twitter away from censorship, and his group has criticized the corporate for steps like banning the account of former U.S. President Donald Trump after the storming of the U.S. Capitol as a result of danger of additional incitement of violence.

“Twitter beneath Musk might be what it ought to been — each from a civic and a price standpoint — all alongside” Shepard stated by way of e mail.

Taking a dimmer view is Meredith Benton, founding father of Whistle Cease Capital, which focuses on social and environmental issues and filed a decision crucial of non-disclosure agreements for workers.

“Missteps, in pushing for his (Musk’s) personal unfettered speech, danger destroying the attraction of the platform for thousands and thousands who have to really feel secure earlier than they will communicate up,” Benton stated.

A fourth proposal filed by overseers of New York State’s pension fund, who declined to remark, calls on Twitter to report on its electoral spending.

A fifth proposal was filed by Arjuna Capital, calling on Twitter to appoint at the very least one board member with a background in human or civil rights. Arjuna Managing Companion Natasha Lamb stated she would count on Musk to again the proposal as it’s according to his free speech issues.

However she known as Musk’s buyout bid “troubling” as an extra consolidation of energy on social media, the place good governance is important.

“We don’t want Twitter run by one other social media emperor. We’d like it run by specialists,” Lamb stated.

(Reporting by Ross Kerber in Boston and Sheila Dang in Dallas; Enhancing by Kenneth Li and Lisa Shumaker)