Silver Lake co-chief executive Egon Durban tendered his resignation from the board of Twitter after the social media company’s shareholders on Wednesday issued a rare rebuke at a tense investor meeting.
The vote against Durban’s re-election to the board came after the two biggest shareholder advisers, Institutional Shareholder Services and Glass Lewis, earlier this month cited concerns that he is on too many others. Durban serves on seven public boards, up from six last year, the ISS said.
A Twitter spokesperson said that Durban had offered his resignation to the board in accordance with its corporate governance rules. The spokesperson added that its corporate governance committee would consider whether to accept his resignation, given the vote is not binding. Investors typically rubber stamp board member nominations. But BlackRock, Vanguard and other big asset managers tend to vote against board members when they serve at more than four companies.
Just nine other companies in the S&P 500 have one or more directors who serve on more than five public company boards, according to an analysis of securities filings by ISS Corporate Solutions. Silver Lake declined to comment.
Durban has been on Twitter’s board since March 2020, when Silver Lake invested $1bn in the company to help fund a $2bn share repurchase programme. His appointment was secured as part of a co-operation agreement between Twitter and activist investor Elliott Management, which had at the time been agitating for then-chief executive Jack Dorsey to be removed over concerns over the company’s sluggish growth.
Wednesday’s shareholder meeting comes amid an ongoing drama over Twitter’s future, after Elon Musk agreed a $44bn deal with the board to buy the company and take it private. Musk worked closely with Durban when trying to arrange a potential buyout of Tesla.
Musk, who wants to loosen content moderation rules on the platform, said earlier this month that the deal was “temporarily on hold” as he sought information on fake accounts. Twitter executives have said they intend to close the transaction.
During the shareholder meeting on Wednesday, Twitter chief executive Parag Agrawal declined to address questions about the deal, but faced a deluge of queries from investors on content moderation issues, misinformation and political bias.
Shareholders endorsed the $30mn pay package for Agrawal, who took over from Dorsey in November, despite both proxy advisers recommending against the plan over concerns of a “misalignment between CEO pay and company performance”.
Musk’s name was frequently invoked around free speech and content moderation issues during the meeting. One shareholder complained of “wokeness” inside Twitter, citing Musk and claiming the company’s diversity policies were discriminatory against men and white people, while another lambasted Musk’s approach to speech while proposing that a human rights and civil rights leader join as a director.
Shareholders voted in favour of a proposal put forward by New York state’s pension fund requiring the company to publish an electoral spending report on any contributions to politicians or causes.
Shareholder proposals demanding companies publish more information about political spending and lobbying have been some of the most successful in recent years. Nine lobbying or political spending proposals passed in 2021, up from six in 2020, according to law firm Sullivan & Cromwell.
Separately on Wednesday, Twitter agreed to pay a $150mn fine over allegations from US regulators that it breached privacy rules by improperly using users’ phone numbers and email addresses.
In 2019, Twitter admitted that it had “inadvertently” used the personal information provided by more than 140mn users for “safety and security practices” to better target advertising between 2014 and 2019.
According to court documents, this violated a 2011 order over previous charges from the Federal Trade Commission that the company had put users’ privacy at risk.
The latest fine — together with new compliance measures levied on Twitter, including limiting employee access to users’ personal data — “will help prevent further misleading tactics that threaten users’ privacy”, associate attorney-general Vanita Gupta said. The proposed settlement must be approved by a federal judge.