Twitter CEO Jack Dorsey will step down as head of the social media platform he co-founded a decade and a half ago, the company announced Monday.
Parag Agrawal, a board member and former chief technology officer, was appointed CEO effective immediately, and Dorsey will remain a member of the board until his term expires at next year’s stockholders’ meeting, the company said.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Dorsey said in a statement released by Twitter. “My trust in Parag as Twitter’s CEO is deep. His work over the past 10 years has been transformational. I’m deeply grateful for his skill, heart, and soul. It’s his time to lead.”
Dorsey warned of the potential pitfalls when a company founder stays on for too long.
“There’s a lot of talk about the importance of a company being ‘founder-led,'” Dorsey said. “Ultimately I believe that’s severely limiting and a single point of failure.”
He added: “And there aren’t many founders that choose their company over their own ego. I know we’ll prove this was the right move.”
CNBC was the first to report Dorsey’s departure Monday.
Dorsey remains CEO of Square, his digital payments company. He is the only person to be CEO of two public companies with market valuations of greater than $5 billion.
In his statement, Dorsey didn’t mention Square or investor pressure previously brought on him to pick one of the executive posts.
“I want you all to know that this was my decision and I own it,” Dorsey said. “It was a tough one for me, of course. I love this service and company.“
Dorsey ends a five-year run atop Twitter, during which he helped boost its user numbers and oversaw the implementation of a variety of new features to expand its reach and crack down on issues like abuse and misinformation.
The investment firm Elliott Management launched a campaign to remove Dorsey as CEO last year.
Elliott Management offered its vote of confidence in the changes Monday, with Agrawal becoming CEO and Bret Taylor, the president and COO of Salesforce, coming in to be chairman of the board.
Taylor will succeed Patrick Pichette, a former Google executive, who will remain on the board as chairman of the audit committee.
“Twitter is the leading global medium for real-time conversation and engagement, and our collaboration with Jack and the company for the past two years has been productive and effective,” Elliott Management Managing Partner Jesse Cohn and Senior Portfolio Manager Marc Steinberg said in a joint statement.
“Twitter is now executing against an ambitious multi-year plan to dramatically increase the company’s reach and value, and we look forward to the next chapter of Twitter’s story,” they said. “Having gotten to know both incoming Chairman Bret Taylor and incoming CEO Parag Agrawal, we are confident that they are the right leaders for Twitter at this pivotal moment for the company.”
Twitter announced in a filing to the Securities and Exchange Commission in February that it aimed to have 315 million monetizable daily active users by the end of 2023 and to at least double its annual revenue in that year.
Twitter had 192 million monetizable daily active users and $3.7 billion in annual revenue at the end of last year, according to the company’s last quarter earnings report.
Even though Agrawal is a 10-year employee with one of the highest positions in Twitter, Monday’s announcement would be his introduction to many people.
He promised to follow through on the company’s big plans.
“We recently updated our strategy to hit ambitious goals, and I believe that strategy to be bold and right,” he said in a statement. “But our critical challenge is how we work to execute against it and deliver results — that’s how we’ll make Twitter the best it can be for our customers, shareholders, and for each of you.”
Twitter shares initially rose sharply after news of Dorsey’s exit spread, but they declined throughout the afternoon to finish about 2.7 percent lower.