Cloud communications juggernaut Twilio has responded to mounting pressure from activist investors by appointing a Sachem Head Capital Management partner to its board, the company announced on Monday. The move, which sees Andy Stafman joining the board and expanding its size by one, comes amidst calls for significant operational adjustments.
The addition of Stafman precludes potential boardroom challenges from Sachem Head in 2024, a crucial year when three Twilio directors, including CEO Khozema Shipchandler and Chairman Jeff Epstein, face re-election.
Sachem Head, which has intermittently invested in Twilio over recent years, has recently solidified its position within the company, although the exact extent of its stake remains undisclosed.
Founded in 2008 and publicly listed since 2015, Twilio specializes in products facilitating developers to integrate communication features like phone calls and text messages. With a market value of $11 billion, the company faces mounting pressure from activist investors such as Legion Partners and Anson Funds, advocating for strategic overhauls, potentially including divestments or even a sale of the entire company.
Despite a 14% decline in stock value since January, in contrast to the Nasdaq Index’s 11% ascent, Twilio is navigating challenges, catalyzed by the COVID-19 pandemic’s remote work surge, which saw its stock plummet roughly 85% from its 2021 peak.
Earlier this year, Twilio implemented leadership changes, promoting Shipchandler to CEO following Jeff Lawson’s tenure. It also undertook cost-cutting measures and expanded its stock buyback program, committing an additional $2 billion through 2024, on top of a previously authorized $1 billion buyback initiative.
Sachem Head, managing assets worth $3.4 billion, has a track record of steering software investments, having previously nominated directors to boards of companies like Anaplan and Autodesk, leveraging its influence to shape strategic trajectories.