In today's ExchangeWire news digest: Twitter refuses to dismiss Egon Durban from its board, defying its shareholders vote; a company filing from SoftBank reveals the company slashed execs' pay after its Vision Fund dropped ¥3.5tn (£21.7bn); and rapid grocery delivery apps Getir and Gorillas announce plans to cull their workforces.
Twitter refuses to remove Silver Lake’s Durban from its board
Social media giant Twitter has refused to dismiss Egon Durban from its board despite the company’s investors voting against his re-election at last week’s shareholder meeting.
On Wednesday (25th May), 43% of Twitter’s shareholders voted against Durban’s re-appointment following concerns that the private equity investor sits on too many boards. These concerns were initially raised by Institutional Shareholder Services (ISS) and Glass Lewis, two prominent shareholder adviser organisations. ISS reported that Durban currently holds a seat on seven public boards.
In accordance with Twitter’s corporate governance guidelines, Durban offered his resignation following the vote. A regulatory filing issued by the social media giant on Friday (27th May), however, revealed that Durban’s resignation had not been accepted.
Instead, the filing revealed an agreement allowing Durban to reduce his board commitments to no more than five public company boards by 25th May 2023.
“The board considers Mr Durban a highly effective member and believes that he brings to the board an unparalleled operational knowledge of the industry, a unique perspective, and an invaluable skill set and experience with mergers and acquisitions,” the filing said.
Durban, co-CEO and managing director of private equity firm Silver Lake, was amongst the first people Elon Musk contacted ahead of his offer to purchase the company for USD$44bn (£34bn) and was on the board when it unanimously approved the acquisition in April.
Twitter, Silver Lake, and Durban are yet to comment.
SoftBank execs see salaries slashed after Vision Fund falters
While Masayoshi Son, SoftBank’s founder and chief exec, maintained a salary of ¥100m (£622,000), four of the company’s top six execs saw their pay drop by over a third. Simon Segars, who headed the company’s chip unit Arm Ltd. until February, received ¥1.15bn (£7m), a 40% cut from the previous year. Meanwhile Ronald Fisher, who stepped down from leading the US arm of SotfBank’s Vision Fund last month, took home ¥126m (£783,720), a pay cut of 86%.
Ken Miyauchi and Yoshimitsu Goto, both of whom are still at the company as chief of domestic telecom operations and chief financial officer respectively, both received double-digit cuts to their pay.
The brutal pay cuts to some of SoftBank’s highest executives follows a record loss of ¥3.5tn (£21.7bn) to the company’s Vision Fund, which was made public earlier this year. A combination of China’s regulatory crackdown on the tech industry, rising interest rates, and a sell-off of tech shares saw the conglomerate’s portfolio companies diminish in value, resulting in a significant financial blow for the company.
The pay cuts, which were revealed in a company filing posted ahead of its annual meeting on 24th June, may shake one of SoftBank’s major lenders, Mizuho, who previously expressed a lack of concern over the tech giant’s financial health.
Getir and Gorillas cull jobs as the rise of grocery delivery start-ups halts
Two of the world’s largest grocery order apps, Getir and Gorillas, announced plans to lay off hundreds of employees. The cull comes as the pandemic-induced growth experienced by instant grocery apps grinds to a halt.
On Wednesday (25th May) Turkey-based Getir told employees that it intends to reduce its 6,000-strong workforce by 14%, whilst Gorillas revealed plans to let go of around 300 employees. The Berlin-based company is also contemplating withdrawing from Italy, Spain, Denmark, and Belgium to focus on more profitable markets in Germany, the UK, and the US.
“These are necessary moves that will help Gorillas to become a stronger and more profitable business with a sharpened focus on its customers and its brand,” the company said in a statement.
Companies like Getir and Gorillas saw exponential growth during the coronavirus pandemic, during which demand for their services delivering groceries soared on a global scale. The start-ups, however, have both struggled financially, with CNBC reporting that attempts to expand into the US market have proven costly to both companies.
Gorillas’ and Getir's decision to reduce their workforces are indicative of broader cutbacks across the sector. Last week, Klarna revealed it would dismiss around 10% of its workforce, while Gopuff announced plans to cut its global workforce by around 3% as part of a company-wide restructure in March.