Is Twitter, Inc.'s Policy for Compensating Board Members Good for Investors?

For all the hubbub over Twitter spending on 19th century log cabins for its cafeteria, the company's policy for compensating board members is anything but excessive. Fool contributor Tim Beyers explains why in the following video.

Twitter's latest SEC filing specifies how it will pay board members. Source: Tim Beyers/The Motley Fool.

In an exhibit to its 10-K annual filing, Twitter revealed the details for how it plans to compensate its directors for their service. Each member will earn $12,500 quarterly, or $50,000 per year. Those who serve on the Audit and Compensation committees also earn extra fees, while extra director is also eligible for annual awards of restricted stock valued at up $225,000. Pretty standard stuff, all in all.

So what's the big deal? Board members get to choose how they're compensated. They can either opt for cash payments, or exchange those payments in favor of adding to their annual award of restricted shares, in effect betting on Twitter right alongside everyday shareholders.

A bird's-eye view of the common area at Twitter. Credit: Aaron Durand for Twitter.

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That's an important provision, Tim says. Investors should always want those representing their interests to have as much (or more!) to gain from a rising stock price. In fact, we believe in this principle so strongly that we're allowing our Chief Technology Officer, Jeremy Phillips, to put more than $100,000 of his own money in a company that Fool co-founder Tom Gardner calls it "the one everlasting investment" to make if you make no other. To learn the identity of this stock for free and see why Jeremy and Tom believe in it so strongly, all you have to do is click here now.

The article Is Twitter, Inc.'s Policy for Compensating Board Members Good for Investors? originally appeared on Fool.com.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the stocks mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool recommends Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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