Twilio Seeks Board Terms Following Activist Pressure

(Bloomberg) — Twilio Inc., a software company that has been challenged by activist investors, is asking shareholders to change its board director terms to one year from three beginning in 2025.

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The company also announced Wednesday that Byron Deeter, a director since 2010, will not seek reelection at its upcoming annual investor meeting, and the board will be reduced to nine members from 10 upon the end of his term.

San Francisco-based Twilio, known for its business-to-consumer communications services, has been facing pressure from activist investors like Legion Partners Asset Management and Anson Funds to improve financial performance.

Anson Funds Portfolio Manager Sagar Gupta said Thursday the proposed changes to Twilio’s board were based on his firm’s recommendations. “On behalf of all Twilio stockholders, we plan to hold the entire board accountable in the public realm going forward,” Gupta wrote in a statement.

Ongoing scrutiny from Anson Funds will be focused on “strategy, operations, corporate governance, and capital allocation,” Gupta said.

Twilio said on Monday that it had added Andy Stafman, a partner at Sachem Head Capital Management, to the board. The change “was not enough to prevent the continued entrenchment of the board and ensure an end to Twilio’s persistent underperformance,” Gupta wrote. Co-founder Jeff Lawson stepped down as CEO earlier this year, which Gupta called “a step in the right direction” at the time.

Deeter, a partner at Bessemer Venture Partners, was among Twilio’s first investors and “helped guide the company from our earliest stages of growth,” Chief Executive Officer Khozema Shipchandler said in a statement.

–With assistance from Crystal Tse.

(Updates with statement from Anson Funds)

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