Elon Musk's plans for Twitter are starting to take shape. The Tesla CEO told banks that he plans to slash pay for board members and executives in a bid to get funding for the acquisition, Reuters reported. Insiders also told Reuters that Musk presented ideas for monetizing tweets.
Musk had previously tweeted that board members' salary would be slashed to $0 if his bid succeeded, which would save Twitter $3 million per year. It turned out he wasn't trolling. Bloomberg reported Thursday that Musk also plans to lay off employees to cut costs.
Despite being the richest man in the world (most days), it was unclear how Musk planned to fund the acquisition last week. He infamously tweeted that he had the “funding secured” to take Tesla private in 2018, though a court and the SEC say he did not, in fact, have funding secured. The billionaire has $90 billion in debt tied up in his Tesla, SpaceX and Boring Co. shares. But according to an SEC filing, Musk is using his Tesla shares as collateral for a $12.5 billion loan, in addition to $21 billion in cash he’s committed to the acquisition and additional loans secured against Twitter.
Musk allegedly told banks that cutting stock compensation for executives and the board would bring Twitter closer to industry standards. He referenced Pinterest and Meta’s recent earnings as proof that Twitter could significantly increase its profit margins, according to Reuters. In 2021, stock-based compensation at Twitter ran 33% higher than it did in 2020.
But when Musk was making his offer to banks, he didn’t only focus on cost-cutting. He also said that he would boost Twitter revenue by exploring new ways to monetize tweets. One method could be to charge companies fees for embedding or quote-tweeting verified users, for instance. Musk also wrote and deleted several tweets last week with ideas for the company's Twitter Blue subscription service. Some of his suggestions include offering the Twitter verified blue checkmark, an ad-free interface and additional edit capabilities bundled with the $2.99 subscription fee.
Despite Twitter's popularity, the platform has had a tough time convincing people to pay money for premium features like the ability to undo tweets. The company primarily relies on ads for profit, which Musk thinks is a disservice to users.