Twitter investors were sharply divided over Jack Dorsey’s stock plan

While Twitter shareholders approved CEO Jack Dorsey’s plan to give his stock to employees last week, an unusually large number of investors voted against the proposal, hinting at continued divisions over the company’s leadership.

Twitter revealed the vote totals from its annual shareholders meeting in a document filed with the U.S. Securities and Exchange commission on Friday. While there were four items on which shareholders were asked to vote this past Wednesday, the most notable was a plan Dorsey announced last fall when he returned to the company as CEO.

At the time, Dorsey said he would return 6.8 million shares to the Twitter stock employee pool to be given out over time to employees old and new. It was gesture intended to show the deep faith Dorsey had in the company at a time when there was a large turnover in the executive ranks and many on Wall Street were questioning Twitter’s future .

Turns out, the idea wasn’t a slam dunk with investors.

According to the filing, 223,121,744 shares of stock were voted in favor of the proposal, while 123,907,045 shares voted to “withhold” their approval. Another 1,847,614 shares abstained from voting, and there are 202,867,909 shares held by brokers who were not authorized by the shareholders to vote on any proxy matters.

Approval of the plan required affirmative votes of a majority of the votes cast. The abstentions were counted as a vote against, while the non-votes were not counted.

While it wasn’t exactly a nail-biter, the level of opposition was clearly high. Generally speaking, it’s highly unusual for corporate shareholders to buck the recommendations of a company’s board or executive team on any proxy vote.

Compare those results on the stock issue, for instance, to another proxy matter: the appointment of the company’s accounting firm. In this case, 544 million shares voted in favor, and only 4.5 million voted against. That lopsided vote total is more typical of proxy matters.

In a previous filing on May 20, Twitter signaled that some shareholders were restless about Dorsey’s proposal. The company said it had agreed to change the terms of the plan to prohibit the options from being repriced, something that could affect the value and also trigger some potential tax issues.

“We appreciate the stockholder feedback we have received on our proposal to approve the Twitter, Inc. 2016 Equity Incentive Plan at our 2016 Annual Meeting of Stockholders,” the company said in a filing. “Based on discussions with our stockholders, we have committed to amend the 2016 Plan after the Annual Meeting to prohibit the repricing of stock options, including through an option exchange program or cash buyout, without the consent of Twitter’s stockholders. We recognize the importance of protecting the value of your investment in Twitter and we also endeavor to be responsive to stockholder feedback on our compensation programs.”

That was apparently enough to win the necessary approval this past week. Still, the fact that Dorsey was working so hard until the final minutes to sway those votes shows that investors are not ready to give him the benefit of the doubt.