Posted: May 24, 2022
Elon Musk’s acquisition of Twitter has dominated the news cycle in 2022. This is mainly because Twitter is viewed as the public square of the modern age. It’s definitely not the largest or most profitable social media platform. But, it does seem to hold an outsized influence on the public. These days, many people use Twitter as an in-the-moment news source. It’s also used by companies and politicians to issue public statements. So, now that Musk is buying Twitter, what changes can users expect moving forward? Let’s examine a few potential changes to Twitter after Musk takes over. A hub for free speech Elon’s biggest talking point regarding his acquisition of Twitter is that he wants to turn it into a hub for free speech. He feels that the platform has gone too far in its content moderation policies. In particular, Elon has stated that he does not think people should receive lifetime bans from Twitter’s platform. However, Elon has been a little bit lax when it comes to details around his new free speech policies. One idea that he has toyed with is making Twitter’s algorithm open source. This would allow a lot more insight into how the platform chooses which content to show its users. Increasing profitability Elon has also, unsurprisingly, announced that he wants to increase Twitter’s profitability. Since Elon will be over $10 billion in debt if he acquires Twitter, profitability is more of a necessity for Musk. One way that Elon plans to increase Twitter’s profitability is by charging a fee for commercial and government users. The site would remain free for casual users. However, he would charge anyone that wants to use the site for commercial use. Musk has also mentioned that he might switch to a subscription model or charge companies to quote viral Tweets. In his efforts to increase profitability, Musk has also come after another unsuspecting group of people: Twitter employees and its Board of Directors. Namely, Musk has said that he will cut jobs and executive pay as a means of increasing profitability. Keep in mind that Twitter has over 7,500 employees. Making cutbacks is one way to cut expenses. Additionally, cutting the salaries of Twitter’s board of directors would immediately free up around $3 million in cash flow. There are also the specific compensation packages of top executives like CEO Parag Agrawal. Agrawal’s total compensation for 2021 was set at $30.4 million. Eliminating excess salaries is another way to instantly boost Twitter’s bottom line. On that note, it is also unclear if Musk intends to pay himself a salary when he takes over as head of Twitter. Now that Twitter will be a private company, he will have a lot more flexibility on what he wants to pay himself. Granted, as the richest man in the world, this is probably not a huge concern for him. To learn more about current events as they pertain to finance, economy, business and executive compensation, consider subscribing to the official Veritas newsletter: Compensation in Context.