Analysis-Elon Musk deals Twitter a wild card as shareholders seek reforms

Whatever the outcome of Musk’s bid to buy Twitter outright announced Thursday, investors with opposing political views described the billionaire entrepreneur as likely to work to undo some of the restrictions on content that Twitter has imposed as it attempts to promote free speech while combating hate speech and false information.

Even if he fails to buy Twitter, the Tesla CEO, who recently disclosed a 9.6% stake, is seen as likely to vote in ways that could shake up the company at its virtual May 25 meeting, said people who follow corporate governance issues.

“Given where Musk has positioned himself relative to the strategy of Twitter and given he wants to be something of a disrupter, I don’t see him voting with management very often,” said Brian Bueno of Farient Advisors, a corporate governance and executive pay consulting firm.

Musk said his offer price of $54.20 per share was meant to promote open discourse. At the virtual meeting, he will control the second-largest stake after Vanguard Group, enough to give either investor a kingmaker role in close contests.

Musk did not immediately respond to requests for comment on how he might vote at Twitter.

Musk’s star power will likely draw much attention to event, said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. “He’s a well-known individual in the middle of all this, so it will increase the interest in voting and could have a big impact,” Elson said.

Although Twitter on Friday adopted a shareholder rights plan to defend itself against Musk, Elson said its impact on the voting might only be to make proxy advisers, which tend to frown on such so-called “poison pills,” more skeptical of management.


Twitter faces five shareholder proposals, all opposed by management, dealing with topics drawing much investor attention.

Two are from conservative groups, one asking Twitter to report on its impact on civil rights and the other on its lobbying activities. Scott Shepard, a fellow at the right-leaning National Center for Public Policy Research think tank, one of the sponsors, called Musk’s offer “terrific” for shareholders.

Shepard said he hoped Musk would turn Twitter away from censorship, and his group has criticized the company for steps like banning the account of former U.S. President Donald Trump after the storming of the U.S. Capitol due to the risk of further incitement of violence.

“Twitter under Musk will be what it should been — both from a civic and a value standpoint — all along” Shepard said via email.

Taking a dimmer view is Meredith Benton, founder of Whistle Stop Capital, which focuses on social and environmental matters and filed a resolution critical of non-disclosure agreements for employees.

“Missteps, in pushing for his (Musk’s) own unfettered speech, risk destroying the appeal of the platform for millions who need to feel safe before they can speak up,” Benton said.

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

A fifth proposal was filed by Arjuna Capital, calling on Twitter to nominate at least one board member with a background in human or civil rights. Arjuna Managing Partner Natasha Lamb said he would expect Musk to back the proposal as in line with his free speech concerns.

But she called Musk’s buyout bid “troubling” as a further consolidation of power on social media, where good governance is essential.

“We don’t need Twitter run by another social media emperor. We need it run by experts,” Lamb said.

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

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