The Silicon Valley set typically professes to want to make the world a better place. The platitude is often accompanied by rich compensation packages. That’s why the creative giveback by Twitter boss Jack Dorsey stands out as a promising start for his second reign as chief executive.
He is donating a third of his stake in the $20 billion microblogging company, or about $200 million worth, to the employee compensation pool. The move should engender some needed loyalty after his decision to moonlight as Square’s chief executive. Twitter could use more such bold ideas.
Dorsey has shown similar generosity before. Over the past two years, he has given 15 million of his shares in Square back to the payments company. That benefited his colleagues by making their shares more valuable and allowed for larger future equity grants. He also recently pledged to give more than half his remaining one-quarter stake in Square to charity.
It’s at least partly an acknowledgment of the diminishing returns of building ever more personal wealth. If Square goes public at the $6 billion valuation implied by its last funding round, Dorsey would still be a billionaire after all his giveaways. The money is probably better spent keeping employees happy.
Talented engineers are in high demand these days and Twitter could use a breakthrough or two to keep up with the likes of Facebook. Dorsey’s decision may turn out to be the difference between retaining and losing the right people. That would pay dividends for Twitter shareholders and pave the way for Dorsey to give away more.