Twitter CEO gives a third of his Twitter stake to employees

Twitter CEO's amazing gesture

Twitter's newly returned CEO Jack Dorsey announced via Twitter that he plans to give around a third of his personal stake in the company —around 1 percent of Twitter — to an employee equity pool.

"I'm giving around 1/3 of my Twitter stock (exactly 1 percent of the company) to our employee equity pool to reinvest directly in our people," he tweeted late Thursday U.S. time. "I'd rather have a smaller part of something big than a bigger part of something small. I'm confident we can make Twitter big!"

Dorsey, a company co-founder, was named Twitter's permanent CEO earlier this month after returning to serve as interim CEO in July. The previous CEO, Dick Costolo, stepped down after earnings disappointed and amid concerns about user growth. Dorsey served as CEO from May 2007 to October 2008.

Despite giving up the stake, Dorsey will remain Twitter's seventh largest shareholder with a 2.23 percent stake in the company.

Twitter's relationship with its employees may be a bit uncertain after it launched a round of layoffs earlier this month, saying it planned to cut around 8 percent of its global workforce.

Read More Twitter execs quickly losing Wall Street support

Wall Street analysts are increasingly negative on the one-time social media darling punctuated by Morgan Stanley's Brian Nowak's downgrade Wednesday of Twitter's stock to "underweight" from "equal weight."

Nowak believes Twitter will miss Wall Street numbers materially in the future. His forecast for 2017 sales is 18 percent lower than consensus, and his earnings forecast is 25 percent lower than the rest of Wall Street.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter