It was June 11 when Twitter (NYSE:TWTR) first announced Dick Costolo was stepping down as the company's CEO. After a high-profile executive search and lots of pressure from investors for the company to make a decision, the board's persistence has led them in a complete circle to choose Twitter co-founder Jack Dorsey, who is currently serving as the company's interim CEO, to take the permanent position. Here's what investors need to know.
Dorsey will split his CEO role
As expected, Dorsey will not be resigning from his CEO position at online payments company Square (which he also founded) to accept the Twitter CEO position. Instead, he will run both companies.
While it's no surprise that Dorsey isn't resigning from his position at Square, there was, at one point, doubts about whether Twitter's board was even interested in hiring someone who would not be able to commit to a full-time position at the company.
"The Committee will only consider candidates for recommendation to the full Board who are in a position to make a full-time commitment to Twitter," Twitter said in an update to its CEO search on June 22, clearly referring to Dorsey.
But the board has reversed this stipulation for the CEO role -- at least when it concerns Dorsey.
The CEO isn't jumping into this new dual CEO position without warming up. He has been CEO at both companies -- interim CEO at Twitter and permanent CEO at Square -- for over three months now.
Dorsey has a tough job ahead of him. He will face Twitter's slow user growth problem head on.
"[W]e are not satisfied with our growth in audience," Dorsey said in the company's second-quarter earnings press release in July.
During the company's second-quarter earnings call following the earnings release, Dorsey outlined three key areas the company will focus on to address this slowing user growth: "ensure more disciplined execution, simplify our service to deliver Twitter's value faster, and better communicate that value."
In line with these goals, Dorsey is already making moves, shifting some executives around about a month ago and announcing on Monday the company is appointing Adam Bain, who currently serves as Twitter's chief of global revenue and partnerships, to the company's chief operating officer position. With monetization arguably being the company's greatest strength to date when it comes to execution, the promotion of Bain makes sense.
"My focus is to build teams that move fast, and learn faster," Dorsey said in a Tweet on Monday morning after the announcement.
Dorsey has matured since the last time he held the role as full-time CEO at Twitter, sources from inside Twitter told Re/code ahead of the permanent CEO announcement.
This time, the bitterness that marked his brief return to Twitter in 2011 as executive chairman and product czar appears to be gone. This time, he comes with the pedigree of having built from scratch a company — Square — that is on the precipice of an IPO. This time, according to more than 20 current and former colleagues Re/code interviewed over the past few weeks, Dorsey has grown up.
Re/code specifically cites Dorsey's great improvement in delegation, going from terrible to excellent, between his last run as Twitter's CEO at his run today.
Reducing conflicts of interests and minimizing head butting, Dorsey has stepped down from his role as Chairman (though he remains on the board) and former Twitter CEO Costolo has resigned from Twitter's board.
Demonstrating Dorsey's commitment to Twitter, there are currently no plans to compensating him in his new role.