Four former Twitter executives have taken legal action against Elon Musk, accusing the billionaire of withholding severance payments totaling $128 million after he fired them from the company during his 2022 takeover.
When Musk acquired Twitter for $44 billion, he dismissed Parag Agrawal, the chief executive; Ned Segal, the chief financial officer; Vijaya Gadde, the head of legal and policy; and Sean Edgett, the general counsel. Musk later rebranded the company as X.
The executives had clauses in their contracts stating that they were entitled to severance if Twitter ceased to be a public company. Following Musk’s privatization of the company in October 2022, the executives believed they were owed severance payments, including one year’s salary and unvested stock awards.
According to court documents filed in the U.S. District Court for the Northern District of California, Agrawal’s annual salary was $1 million, with $12.5 million in scheduled stock vesting. In the event of an involuntary termination, Agrawal was set to receive a golden parachute payment of $60 million, as outlined in a Twitter securities filing. Similarly, Segal and Gadde were slated to receive $46 million and $21 million, respectively, under the same circumstances.
Musk reportedly stated that he could dismiss the executives “for cause” to avoid paying them severance. He allegedly told his biographer that he intended to deny the executives their severance payments, saving himself approximately $200 million, and vowed to pursue them indefinitely.
The executives’ lawyers argued in court documents that Musk’s actions were part of a pattern to withhold money owed to others and compel them to take legal action. The executives had previously sued Musk for legal fees related to investigations into the company, resulting in a Delaware judge ordering Musk to pay them $1.1 million in October.
Representatives for X declined to comment on the matter, while a lawyer for Musk did not immediately respond to requests for comment. The lawsuit underscores the ongoing legal battles between the former Twitter executives and Musk, shedding light on the complexities of corporate takeovers and executive compensation.
