Twitter CEO follows Apple's lead in more stock for employees

Twitter CEO Jack Dorsey has announced that he is giving some of his own company stock to employees. It follows an announcement in mid-October that Apple that all employees would be eligible for a stock grant. 

Mary Altaffer/AP/File
Twitter co-Founder Jack Dorsey speaks at a fundraiser in New York (April, 2013).

Twitter co-founder and acting CEO Jack Dorsey took to Twitter on Thursday to announce he is giving stock to some of the social networking site's employees. 

In a series of tweets Thursday, Mr. Dorsey announced that he was giving one third of his own stock options to Twitter’s employee equity poll. The move will result in roughly $200 million worth of stock being reinvested into the employees, a move likely intended to boost morale after a corporate layoff a week before and increase the stock options of current and future employees.

As for me: I'd rather have a smaller part of something big than a bigger part of something small. I'm confident we can make Twitter big," one of Dorsey's tweets reads.

Dorsey’s ascension from interim CEO to permanent CEO for Twitter hasn't been entirely smooth sailing. In the month following his transition the company has announced its first major layoff, unveiled a new “moments” feature for news events, and apologized to developers and promised to renew the relationship.

Square, the payment company that Dorsey co-founded, has decided to go public with Dorsey as the CEO as well.

Many of the changes that occurred since Dorsey’s transition to full-time CEO have been in line with market trends. The 8 percent layoff Twitter echoes recent cuts made by Whole Foods, Caterpillar, and Wal-Mart. Dorsey’s decision to redistribute and refocus on stocks for employees, however, might be the start of a new, tech company-fueled market trend.

Stock options for employees have been a staple of the booming Silicon Valley startup culture. They carry the potential to benefit workers generously if the startup succeeds, depending on the stock offered. But more established companies are starting to hop on.   Last week, Apple announced that it was offering company shares to all employees.

"This new program extends eligibility to everyone not covered by other RSU [Restricted Stock Units] programs, effectively making everyone who works at Apple eligible for an RSU grant. This is an unusual step, and very special — just like our team," Apple CEO Tim Cook said, according to CNN Money.

There are differences between how Apple and Twitter are targeting their employees with stocks. Mr. Dorsey’s decision to give about 1 percent of the company back into the employee equity poll means Twitter will not have to issue more stocks to the trading public, which would dilute the value of stocks already owned by employees. Apple’s stock grants will give all employees Restricted Stock Units worth about $1,000 to $2,000 directly to employees, but they cannot be cashed for three years.B

In the United States, significant stock options and benefits are mostly read about in newspapers when given to new CEOs, a practice has been derided as extravagant and harmful to companies. Jack Dorsey’s and Apple’s recent decisions are rare exceptions.

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