Twitter just sent the Securities and Exchange Commission a revised filing that shows it doubled cash-and-stock grants for five outside board directors to -- wait for it -- a minimum $16 million each from $8 million, notes Michelle Leder with the research firm Footnoted.com.
Twitter’s prior filings did not disclose these payouts, Leder says. The huge payouts are buried in its filing, along with the $1 billion credit line, which got a lot of headlines even though such borrowings are common for technology startups going public, Leder adds, noting that Twitter masterfully made the filing on the day of Apple’s Ipad news. The payout blows away Facebook’s pre-IPO payout for directors at just $600,000 worth of stock each.
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Outside Directors. Our 2013 Plan provides that all outside directors will be eligible to receive all types of awards (except for incentive stock options) under our 2013 Plan. In connection with this offering, we intend to implement a formal policy pursuant to which our outside directors will be eligible to receive equity awards under our 2013 Plan. Our 2013 Plan provides that in any given year, an outside director will not receive (i) cash-settled awards having a grant-date fair value greater than $4 million, increased to $8 million in connection with his or her initial service; and (ii) stock-settled awards having a grant-date fair value greater than $4 million, increased to $8 million in connection with his or her initial service, in each case, as determined under GAAP.
The outside directors are: Peter Chernin, founder and chairman of Chernin Entertainment, a film and television production company, and the former president of News Corp.; Peter Currie, president of a private investment firm who was executive vice president and chief administrative officer of Netscape Communications; Peter Fenton of Benchmark Capital; David Rosenblatt of 1stdibs.com and former DoubleClick CEO; and Evan Williams, the founder of Medium, an online publishing firm, and a co-founder of Twitter.
Leder says: “The agreements are amazingly minimalist since there’s no details about options, restricted stock, performance-based shares or even any detailed language on severance — the types of things that typically create bloat in most executive agreements.”
On top of these disclosures, Twitter’s filing shows it now plans to “make 12 million shares available to its employees under its Employee Stock Purchase Plan and it expects the total offering to consist of 5 billion common shares and another 200 million preferred shares,” Leder says.