Stockholder Proposal Regarding a Report on Users Owning the Twitter Platform
sec.gov
sec.gov
A similar situation has happened the last couple of years with Apple, where there's a shareholder proposal for greater diversity[2], and it gets clobbered at the meeting.
[1] https://www.sec.gov/Archives/edgar/data/1418091/000119312517...
[2]http://www.businessinsider.com/apple-diversity-shareholder-p...
This is when the board has to consider firing the CEO, and the stockholders have to consider firing the board.
(IMO this is the problem with starting your big company in SF - you'll just get employees who leave your competitors and think the same way they do.)
They are just giving them shares, right? That shouldn't count against P&Ls because it's not cash.
Errr, actually, california has a lot of exceptions to at-will. Here's a random article analyzing it. Note the conclusion: http://www.hullmcguire.com/pdf/Hull%20McGuire%20-%20Californ...
It's pretty common. I believe there is even case law saying that once you've been at a place for some significant amount of time, you have the right to expect to only be terminated for cause.
>And those grants of restricted stock units or options, which would have to be covered to some degree by any buyer, simply add to the purchase price of any deal.
>According to Twitter’s most recent annual filing, the company racked up $682 million in stock-based compensation last year. By comparison, the company’s adjusted earnings before interest, taxes, depreciation and amortization — which also excludes stock-based compensation — for the year was $557.8 million.
>Factoring in the payouts would have pushed Twitter well into the red for the year.
https://www.nytimes.com/2016/09/27/business/dealbook/twitter...
Are there examples of large companies converting into a credit union type model?
Why would shareolders want this?
John Lewis, one of the UK's largest retailers (annual turnover about £10bn) with one of the best-respected brand is employee-owned under a cooperative structure.
In terms of rescuing businesses from big egos doing badly, Portsmouth FC was rescued by a fan take-over after a number of disastrous owners who'd saddled the club with debt and left it on the verge of liquidation. It's now on a healthier footing and starting the climb back up the leagues.
For Twitter, which was in a strong position to become a social utility, it's probably not a bad model. But it doesn't involve going out in a blaze of glory, so executives will hate it.
While this might be a decent option for a medium that could be considered important for public discourse, it's certainly not going to goose your stock price and I'm guessing even every Twitter user contributing a few bucks won't get you to a sale price that might work for the board.
While I agree there is no shareholder value involved, I think there is some scope for thinking of the platform as a public utility and putting it under some framework other than a publicly traded corporation. It could operate either as a Foundation, a Public-private partnership, a federal agency perhaps as a subsidiary of the Library of Congress, or some other system of governance that makes it operate more as a public trust than a corporation.
It's function is definitely more akin to a public utility than a product produced for market, after all, so why not? I'd say most online stuff still has too many returns to innovation to where the opportunity costs of nationalizing them outweigh the benefits. But clearly Twitter isn't doing a great job of staying afloat as it is.
I could also see this becoming a common thing for blockchain based services since Ethereum contracts would make this a very easy thing to do.
Because Twitter is a US-only thing, right? Don't forget about the enormous _global_ user base who would definitely not be served by making it directly controlled by the US government.
I suppose there might be some other sovereign wealth funds and investors from China, Gulf States, UK, etc. in there too but still, hardly representative of its actual user base.
I agree that that would probably be the worst option of the bunch, but it's just an example of other ways a platform can be governed that's not a for-profit corporation.
And I agree that if you had to pay (I'd go for a dollar a month) to tweet, it would cure many of Twitter's ills. Bots, scams and fake news would pretty much disappear overnight.
That said, I do appreciate the spirit of the proposal. Specifically, how do users that are contributing to the value of the network somehow extract some of that value in real terms? Of course, there's a lot of complexity to that sort of system and the cost of implementing it substantial. But whereas some people are working on architecting that sort of system from the outset as more a technical feat, this tact would get legal momentum that would almost guarantee some sort solution, be it good, bad or more likely, somewhere in between.
If users aren't getting any value out of using the service, they won't use it. The fact that they are using it, without any force or coercion, indicates there is sufficient value being extracted from the service by it's users.
You don't see the contradiction in this statement?
IMHO, this idea fails to acknowledge that ownership is a dynamic concept, not a static one. In a free country, people can sell what they own. So even if you give shares to a category of person you think should own them, you don't know if they will keep them or if they will sell them to the very category of people you took these shares from in the first place.
Sure you can. But it is my understanding that the more restrictions you put in the circulation of capital, the further away you go from the capitalistic model and the closer you get to the socialist one.
I sincerely wasn't. I was trying to be as neutral as possible. And I was not talking of freedom in the post you're replying to, I was only talking about restrictions on the circulation of capital.
Restrictions and regulations are in no way automatically "socialist". Something being less laissez faire doesn't inherently make it socialist. Socialism doesn't just mean "not free market capitalism".
My father was a post office worker, the government took care of him for sure, but he never made more than $20/hr. Today his retirement account has over a million dollars in it. Growing up we never owned a car, we rarely eat out, and we lived in a very cheap house, in a very cheap neighborhood.
I resented him for it many times, not having a car is very difficult in the suburbs of the Midwest. Our cheap house was in a shitty school district.
But it was his "preference". He could have saved less, and spent the money on a better house in a better school district. He chose to accumulate capital instead.
Nothing wrong with that, but not everyone had the "preference" or "foresight" to choose their parents so carefully.
What OP missed is not subtlety but a basic grasp of how the deck is stacked for most human beings living today.
In any case, the preference I was talking about was excluding wealth considerations. All other things being equal, the tendency to hoard capital is, I believe, part of character.
Well, I may have made the mistake of using the word capital to refer to shares of companies. I admit the term is more generic and even cash can be seen as capital.
Still, this thread started about the idea of giving shares to a category of person. So my point remains : ownership is a dynamic concept. Even if you give those shares to people you think should own them, what makes you think they will keep them and not sell them?
As long as people are free to buy and sell access to healthcare, healthcare will always end up in the hands of those who like to hoard it.
You can advocate for or against capitalism but this framing is dishonest, and even the capitalists would think it's unfair.
Before shareholders vote on the proposal, the board of directors can make a recommendation - is this a good idea or a bad idea? In this case, they say: bad idea.
Shareholders aren't bound to agree with the board, but usually do - after all, they're the same folks who nominated the board in the first place.
Yes, this sort of thing happens all the time. If you own some shares of an individual company (not through a fund), you'll get notice periodically of items to be voted on: proposals from the board (often routine such as handling accounting and audits), which the board recommends passing and which almost always pass, and proposals from individual shareholders, which the board almost always recommends against and which almost always fail. Many of them are ideological, some more reasonable than others.
Does anyone know of any prominent case where a major company passed a shareholder proposal? And/or the board recommended in favor of one?
In my experience, the people with enough savvy to get a shareholder proposal passed for an individual company will instead field their own candidates for the board.
When competent shareholder proposals are presented, they usually are done across a swath of the market and have to do with corporate governance. Managers of major market players (e.g. pension funds) will decide they want a certain change and then present it to many companies.
As an example, board declassification proposals passed at over 50 companies in the first half of this decade; note some of these were supported by the board or at least not opposed: http://www.srp.law.harvard.edu/companies-voting-on-proposals...
Boardseats are usually handed out to representatives of large blocks of stock so there may be a set of people who are savvy enough but do not have enough stock to propose board candidates, or if they do propose them will likely not have a whole lot of chance of seeing their candidates make it to the board.
Probably roughly equal to how much chance their proposals have of passing in the first place but still, such people can and probably do exist.
In this case, I don't think that's what's going on. Most of the shareholder proposals I've seen are basically idiosyncratic political soapboxing, and I vote my tiny number of shares against them because I don't agree with either the proposal or the venue or just don't care.
If I ever saw one that seemed pertinent, I'd vote for it. However, the shares I own outside of mutual funds are tiny and insignificant, so it's moot anyway.
I think it's because the overwhelming number of shareholders in US equities want returns, not a new governance responsibility.
Workers at the companies, however, tend to want the governance, and should have it.
And partly it's a self-fulfilling prophecy: if you disagreed strongly with the board, you'd be less likely to hold stock in the company in the first place, unless you're in the rare position of owning enough of it to affect decision-making.
Why should that make it any less serious than a proposal that is motivated by pure financial interest? There is no law that says monetary profit is the only good a company can create. I object your dismissal of it as non-serious just because it's not obviously commercial.
"Meaningful support" and "meaningful chance of passing", of course, has nothing to do with morality, goodness, or any other such thing. I'm in a fact mode here, not a normative mode; that comes after facts.
Everyone is already being primed for app-driven direct democracy through social media channels, so the moment this is made real, it will explode in popularity. The technical challenges for creating clones of existing services are solved problems, so all it will take is the social will.
Occasionally, I get postcards asking me to nominate a proxy for some upcoming shareholders meeting due to investments I own through my 401(k). I guess that you should be on the lookout for that kind of postcard and follow the instructions.
Simply spreading around shares of the company won't make great leadership magically appear at Twitter. That's backwards thinking.
If you represent an organization and you need to control your social infrastructure, you need to self-manage that infrastructure. Getting involved in the development of GNU social or Mastodon would be a great start.
This is just a proxy statement, meaning it includes all proposals shareholders will be asked to vote on at Twitter's next annual meeting (on May 22nd). Everyone can submit shareholder proposals who owns at least 2000$ of stock [1]. This does not mean that anything will actually happen: The board of Twitter recommends voting AGAINST the proposal and I doubt large institutional investors will vote against the board on this, so the measure will most likely fail.
And even in the quite unlikely case the measure would be approved, it is only asking for a "report" on what selling Twitter to its users would mean. It does not argue for such a sale to actually take place.
[1]: http://theshareholderactivist.com/shareholder-activism-spotl...
My biggest issue is your last point, where owning an account would likely involve "Know Your Customer" levels of identity proving. It would likely require a new class of shares or going private, rather than buying a share on an exchange. Similarly, you'd likely only get one share no matter the number of accounts (using KYC information to de-dup, or having two notions a "member" who can have multiple "personas").
I don't know that it's a good idea for Twitter, but it's at least a (sort of) legally workable idea for an authenticated messaging platform in the abstract.
If I were starting a new Twitter, I'd consider it.
I cannot imagine the shareholders would approve this.
At the current stock price, that's about $5,180,340,000...but of course the price will begin to rise as you buy more and more shares on the open market. So let's say a cool $7 billion to make it happen. Are you planning a Gofundme?
1.) Someone sets up a "take a fraction of a cent off every online transaction you make and put it in a brokerage account for you" app to get a lot of seed capital.
2.) Hack a lot of newswires to spread viral false information about (a non-trademark violating analogue for) Twitter that tanks its stock price.
3.) Use your pile of app-money to buy out a majority stake in (N-TVAf)Twitter at its new low price.
4.) Open up the platform, sell off any now-pointless assets.
5.) HACK THE PLANET! HACK THE PLANET!
Edit: Disclosure, I am a twitter shareholder and approve the ban of @realDonaldTrump from twitter unless the "libel" and McCarthy type posts are removed and any accusations as such are filed in proper mediums.
Threats of violence, or calls that encourage it are a fair line to draw for any user. But the posts you're talking about removing, I think amounts to turd polishing that might actually make it sparkle more than it deserves, and ends up being a deception of the true character of the person.
Imagine if all the birtherism posts were scrubbed? That's his true nature. Compulsive liar or delusional - doesn't really matter. My concern is assurance posts are difficult to scrub. That's what incentivizes people to be sincere rather than just taking inconsequential pot shots at others.