Jack Dorsey is giving about a third of his Twitter shares — or 1% of the company — back to Twitter’s employees, he said in a tweet today.
A move like this is likely at least partially geared at improving morale at Twitter, which has gone through a major transition — with both a big round of layoffs and Dorsey returning as CEO happening in the past few months. Employees are certainly always looking for value at the places they work, and offering some extra shares at a company like Twitter certainly helps.
If a third of his shares corresponds to 1% of the company, he still owns 2% of it, which is a sizable chunk of Twitter. (It’s probably a little more than that — as of the last proxy filing, Dorsey owned 3.64% of the company.) At market close, Twitter was worth $19.7 billion — making his existing stake (we’ll assume something like 2% for the sake of simplicity) worth around $394 million.
And, of course, he owns 24.4% of Square, another company worth billions of dollars that just filed to go public.
But this isn’t the first time he’s done something like this: in Square’s S-1 filing, he said he had given around 20% of his equity back to Square and to the Start Small foundation, a new organization he founded to fund entrepreneurs with a special focus on underserved communities, over the past two years. Both somewhat unusual moves, and Dorsey’s contribution to the Start Small foundation dovetails with other philanthropic efforts of tech leaders like Marc Benioff.
This move isn’t just symbolic. Returning hundreds of millions of dollars in stock to employees is not something that’s often done lightly — and if the company proves to be undervalued, like Steve Ballmer implies, there’s a ton of upside that Dorsey is offering to his employees.
Twitter now has some momentum. It just wrapped up its developer conference (mishaps aside) where it unveiled a suite of new tools and products geared toward further expanding the service’s footprint. It also launched Moments, its new view centered around big stories on Twitter, earlier this year. And a move like this is likely to help fire up the company’s employees even further.