Is Twitter, Inc.'s Policy for Compensating Board Members Good for Investors?

Amid reports of what looks like reckless spending at headquarters, a Fool considers the company's policy for compensating those in charging for producing returns for shareholders.

For all the hubbub over Twitter (TWTR) spending on 19th century log cabins for its cafeteria, the company's policy for compensating board members is anything but excessive. Fool contributor Tim Beyers explains why in the following video.

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Twitter's latest SEC filing specifies how it will pay board members. Source: Tim Beyers/The Motley Fool.

In an exhibit to its 10-K annual filing, Twitter revealed the details for how it plans to compensate its directors for their service. Each member will earn $12,500 quarterly, or $50,000 per year. Those who serve on the Audit and Compensation committees also earn extra fees, while extra director is also eligible for annual awards of restricted stock valued at up $225,000. Pretty standard stuff, all in all.

So what's the big deal? Board members get to choose how they're compensated. They can either opt for cash payments, or exchange those payments in favor of adding to their annual award of restricted shares, in effect betting on Twitter right alongside everyday shareholders.

A bird's-eye view of the common area at Twitter. Credit: Aaron Durand for Twitter.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the stocks mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Twitter. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.