Twitter is facing a lawsuit filed by its employees, who claimed that the company refuses to pay their 2022 bonuses. Employees were promised to be paid 50% of their equity from the company's cash performance bonus plan, which is supposed to be paid out every year.
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SAN FRANCISCO, CALIFORNIA - OCTOBER 26: The Twitter logo is displayed on the exterior of Twitter headquarters on October 26, 2022 in San Francisco, California.
Filing Lawsuit Against Twitter
Employees from Twitter filed a lawsuit against the company for refusing to pay 2022 bonuses despite promises that employees would be paid 50% of their target amount.
According to Bloomberg, former Senior Director of Compensation Mark Shobinger filed the proposed class-action complaint on behalf of current and former employees. Twitter's cash performance bonus plan, which is supposed to be paid out annually, was halted when Elon Musk acquired the company in October.
The employee stated in the lawsuit, "Both before and after Musk's acquisition, Twitter's management continuously promised the company's employees that their annual bonus for 2022 would be paid under the Bonus Plan."
Shobinger was tasked with overseeing executive and incentive pay while working for the company. But his position expanded in November when his responsibilities scoped the employee compensation globally.
Because it reneged on various promises to its employees and refused to pay for the bonuses, Shobinger decided to quit the job and lead the lawsuit against Twitter for breach of contract.
Fortune reported that among the affected employees and executives promised to be paid for their bonuses was former Chief Financial Officer Ned Segal.
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Twitter Employees Frustrations
Prior to the lawsuit, employees feared that no rewards might come as bonuses might be scrapped, benefits may be cut, and stock grants would not appear.
According to Business Insider, Elon Musk promised to reward employees for excellent performance, including in the form of restricted stock units. But instead of rewards, employees received further cuts to benefits and failed promises.
Employees received letters of "intent to grant" a certain amount in Twitter's stock priced at "fair market value" without further information on the price or when it would be issued.
It was followed by Musk telling its employees that Twitter is now rebranding as X Corp., currently valued at $40 billion or less than half of Musk's $44 billion acquired amount.
Aside from this, Twitter also told employees that the company would no longer be giving cash bonuses to anyone in the future. It might be connected to the company's struggle to send a payout for bonuses earned last year, as none of the employees have been funded until now.
As the company continues to provide any financial reward, Musk has been cutting benefits at Twitter. That includes the paid parental leave, which decreased to two weeks and was down from a previously paid leave policy of 20 weeks.
Outside of that period, employees can take unpaid leave up to the amount mandated by state law. In this case filed in California, where the company's headquarters is still based, workers are entitled to 12 weeks of protected parental leave but unpaid.
Related Article: Twitter Employee Annual Bonus is Likely Getting Slashed by Half! Here's Why
