Twitter CEO Jack Dorsey announced his resignation on Monday morning, telling employees in a letter that CTO Parag Agrawal would be taking over the position.
Dorsey said he had three reasons why he thought this was the ideal time for him to resign, citing his confidence in Agrawal, new board chair Bret Taylor and the company's staff.
"There's a lot of talk about the importance of a company being 'founder-led.' Ultimately I believe that's severely limiting and a single point of failure. I've worked hard to ensure this company can break away from its founding and founders," he wrote. "Why not stay or become chair? I believe it's really important to give Parag the space he needs to lead. And back to my previous point, I believe it's critical a company can stand on its own, free of its founder's influence or direction."
He added that there "aren't many companies that get to this level and there aren't many founders that choose their company over their own ego."
"I know we'll prove this was the right move," Dorsey said.
Dorsey and Twitter said he would stay on the company's board until his term expires in May 2022. The board unanimously chose Agrawal to take over as CEO and said he will also join the board.
In his letter to employees, Dorsey noted that Agrawal has been an engineer at the company for more than a decade and has served as CTO since 2017.
"Parag has been behind every critical decision that helped turn this company around. He's curious, probing, rational, creative, demanding, self-aware, and humble," Dorsey said. "He leads with heart and soul and is someone I learn from daily. My trust in him as our CEO is bone-deep."
Twitter shares rose by 2% after the news was released.
Dorsey founded the company in 2006 and was CEO until 2008 when he was pushed out by co-founder Evan Williams. In 2015 he replaced Dick Costolo as CEO despite concerns about his role as CEO of payments service Square. Some have questioned whether he viewed his role at Twitter as a side hobby alongside his work with Square.
Those concerns eventually boiled over last year, when $40 billion hedge fund Elliott Management sought to oust him from the CEO position at Twitter. The two sides eventually came to an agreement that allowed Dorsey to stay on as CEO but he still faced criticism for Twitter's lack of innovation and failure to increase its stock price.
Taylor -- who currently serves as president and COO of Salesforce -- will be taking over as chair of the board for Patrick Pichette. He lauded Dorsey for his work in turning Twitter around "at the most critical time" and praised Agrawal for accelerating the company's "development velocity."
"I look forward to building on everything we have accomplished under Jack's leadership and I am incredibly energized by the opportunities ahead," Agrawal said. "By continuing to improve our execution, we will deliver tremendous value for our customers and shareholders as we reshape the future of public conversation."