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Why Did Twitter Inc. Turn Down Durban's Resignation?

Why Did Twitter’s Egon Durban Go Silent On Twitter?

Small businesses need a few employees to operate. Meanwhile, medium-sized businesses need a bit more. They may need some managers and team leaders on top of regular employees. But the world of big companies and corporations is a lot different. They need employees, managers, executives, and board members. Regardless of the business size, each person that works in it is important – some more than others. How valuable you are to the company depends on what you can offer. If you are very important, the company may not let you go no matter what.

Why Did Twitter Inc. Turn Down Durban's Resignation?

One of Twitter’s board members filed a resignation after failing to get enough votes for re-election. The said member is Egon Durban, who joined the Board two years ago after his company agreed to invest $1 billion in the social network. Twitter rejects the resignation, saying the person is too valuable to the company. This was, in a way, the most amount ever spent buying Twitter Followers, until Elon showed up!

Egon Durban Fails To Get Enough Votes For Re-election

Twitter held its annual shareholder meeting last May. Private equity firm co-Chief Executive Officer Egon Duran did not get re-elected to the Board. He failed to receive enough votes for that.

According to figures Twitter released, 43% of votes in the shareholder meeting opposed Durban’s re-election. Only 33% were in favor.

However, Twitter’s proxy statement said he could remain a director despite that. The social network firm requires board nominees to offer “irrevocable resignation” before voting. That will take effect if the nominee fails to get re-elected and the Board accepts the resignation. That implies that the Board can reject the resignation.

So, even if Durban did not win shareholders’ approval, he could remain a Twitter director. And that’s what happened.

So Who Is Egon Durban Anyway (And Why Should You Care)

Egon Durban, a paragon of entrepreneurial and business acumen, is the founding principal and a Managing Partner and Co-CEO of a highly successful venture capital firm. His name is synonymous with the epitome of business expertise, and his contributions to the finance field are exceptional.

To describe Durban’s work in detail would be an onerous task, for it encompasses an array of abstruse financial concepts and esoteric business strategies, but suffice to say that his primary focus is the identification and cultivation of nascent and burgeoning ventures. He has an uncanny ability to discern the potential of a start-up. He has a prodigious track record of successfully identifying and investing in companies that have gone on to achieve tremendous success.

Durban’s business acumen is not limited to the realm of venture capital, however. He is also an accomplished financial strategist, and his contributions to the field of mergers and acquisitions have been seminal. He is a master of the abstruse and arcane aspects of the business. His work is often characterized by a rigorous analytical approach that belies its deep insights into the nature of economic systems.

Beyond his work as a financier, Durban is also known for his eccentricity and unorthodox approach to business. He is a true nonconformist, unafraid to challenge the status quo and pursue avenues of investment that others consider unorthodox or even heretical. This is partly what makes his work so compelling – it is always pushing the boundaries of what is considered conventional wisdom in the business world.

In conclusion, Egon Durban is a financial luminary of extraordinary vision and acumen whose work has had a profound impact on the venture capital field and whose contributions have opened up new avenues of investment that will shape the future of business. He is a true visionary, and his name will be remembered for centuries to come as one of the greatest minds in the business world.

Institutional Shareholder Services’ Involvement 

Why did the Silver Lake co-CEO fail to get the support of the necessary majority of Twitter investors? It was because Institutional Shareholder Services and Glass Lewis advised against his re-election. These are the two largest shareholder advisers, so their words matter.

Institutional Shareholder and Glass Lewis did not recommend voting for Egon Durban because he sits on too many boards. ISS says that he is on the Board of seven publicly-traded companies.

According to ISS, “the time commitment to be an effective board member at a public company has increased in recent years.” Rising demand for directors to engage with shareholders and new regulations are among the factors the influential research firm listed. ISS adds that executive succession crises, corporate scandals, data breaches, and other things will require a director’s attention.

The research firm emphasized that board members must be able to fulfill all duties. That includes “responding to such unforeseen events without compromising their professional and boardroom commitments.”

Since Durban is on too many boards, ISS determined that he does not have this capacity. And so the firm recommended not voting for him.

Why Did Twitter Inc. Turn Down Durban's Resignation?

Durban’s Resignation

Under Twitter corporate governance guidelines, Durban offered his resignation after the vote. 

A Twitter spokesperson said that Durban “has tendered his resignation to the Board.” He added that the Nominating and Corporate Governance Committee of the Board would consider whether or not to accept his resignation.

And in a regulatory filing on May 27, Twitter said it decided to keep Durban as a director.

However, Durban’s seat on Twitter’s Board is not for free. Of course, there’s a condition. The private investor needs to reduce his board commitments. By May 25, 2023, he needs to be on no more than five public company boards. And since one of those companies must be Twitter, he can only choose four. Durban reportedly agreed to this.

Twitter’s Statement

In a new SEC filing, Twitter stated why it decided to let Durban keep his seat on the Board. The company says that the Board considers Durban “a highly effective member.” They also value Durban’s unparalleled operational industry knowledge and unique perspective. On top of that, he possesses “an invaluable skill set and experience with mergers and acquisitions.”

Indeed, Durban has those capabilities. He counseled Elon Musk when the billionaire was privatizing Tesla in 2018. Also, he helped fund Micheal Dell’s 2013 leveraged buyout of Dell Technologies.

Twitter adds that its Board notes that Durban is someone with “strengthened its ability to oversee the company’s long-term value creation strategy.” Furthermore, he can effectively govern its implementation.

The Board says Durban is consistently well-prepared, engaged, and a meaningful contributor to Board meetings and discussions.

Thus, the company decided to allow Durban to keep his seat as one of its directors.

Why Twitter Doesn’t Want To Let Durban Go

Two years ago, Twitter got into a conflict with Elliot Management, an activist-investing firm. Twitter struck a wide-ranging deal to make Elliot call off its campaign against the social network firm and its then-CEO Jack Dorsey. Elliot bought a stake in Twitter and got some provisions. Among those provisions are several board seats. And one of those seats went to Egon Durban of Silver Lake.

Why Did Twitter Inc. Turn Down Durban's Resignation?

If Twitter removes Durban, it may irritate Elliott Management. Worse, it may violate their agreement. Twitter knows now it would spell big trouble if that happens now. Elon Musk offered to buy Twitter, and angered Elliott Management’s involvement in that will make a mess.

 Durban is also connected to Elon Musk. He is reportedly one of the first people Musk contacted after taking a stake in Twitter, leading to Musk’s takeover bid.

That said, it seems keeping Durban is the wisest thing to do. Elon Musk is having doubts if he can finish the deal. Durban’s entanglement with him can help Twitter sell itself to the billionaire.

In the end, like almost everything about Twitter nowadays, this drama is still all about Elon Musk.

From that, we can conclude Durban’s loss at the vote has nothing to do with shareholders being uncomfortable with his connection with Musk. It’s purely because of Institutional Shareholder Services’ statements.

Twitter’s Egon Durban Still Silent On Twitter

The annual meeting marks another important thing. It is the day former Twitter CEO Jack Dorsey formally leaves the platform. And so, it is the first day where none of its co-founders work in the company or on its Board.

Published on: 25 January
Posted by: Rich Drees
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