Tesla Inc’s boss has entered into an agreement with the social network company to sit on its board after becoming a top shareholder in Twitter.
Elon Musk is joining Twitter's board of directors a day after disclosing that the Tesla CEO took a 9 percent stake in the social media platform.
Twitter Inc. has said in a regulatory filing on Tuesday that it entered into an agreement with Musk that will give the billionaire a seat on its board, with the term expiring at its 2024 annual shareholders meeting.
Twitter CEO Parag Agrawal said in a tweet that the company had been talking to Musk in recent weeks and “it became clear to us that he would bring great value to our Board."
“He’s both a passionate believer and intense critic of the service which is exactly what we need on @Twitter, and in the boardroom, to make us stronger in the long-term," Agrawal continued.
Musk, either alone or as a member of a group, won't be allowed to own more than 14.9 percent of Twitter's outstanding stock for as long as he's a board member and for 90 days after.
Putting Musk on Twitter's board and limiting the amount of stock he can acquire as a director may be a strategic move on Twitter's part, as Musk became its biggest shareholder and openly questioned the social media platform’s dedication to free speech and the First Amendment.
READ MORE: Elon Musk becomes top shareholder in Twitter
Musk, who has 80 million Twitter followers, purchased 73.5 million shares, worth about $3 billion. He has also raised the possibility with his massive and loyal Twitter following, that he could create a rival social media network.
Musk has not spoken specifically about any Twitter rule changes he might push.
He tweeted on Tuesday that he wants to make “significant improvements to Twitter in coming months”. Late Monday he launched a poll asking whether users want an edit button, misspelling “yes” as “yse".
In March, Musk told his millions of followers on Twitter that he was “giving serious thought” to creating his own social media platform, and has clashed repeatedly with financial regulators about his use of Twitter.
Musk is locked into a bitter dispute with the US Securities and Exchange Commission (SEC) over his ability to post on Twitter. His lawyer has contended in court motions that the SEC is infringing on the Tesla CEO’s First Amendment rights.
Shares of Twitter rose more than 6 percent before the market open.
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