Former Twitter Chief Executive Officer and several executives file a lawsuit against Elon Musk and X, seeking $128 million in unpaid severance. They allege Musk fabricated reasons for their termination to evade payment.
(Photo : KIRSTY WIGGLESWORTH/POOL/AFP via Getty Images)
X (formerly Twitter) CEO Elon Musk gestures during an in-conversation event with Britain's Prime Minister Rishi Sunak in London on November 2, 2023, following the UK Artificial Intelligence (AI) Safety Summit.
Suing Elon Musk
A lawsuit has been filed by a group of former Twitter executives, including ex-CEO Parag Agrawal, against Elon Musk and X, concerning unpaid severance benefits totaling millions of dollars. These claims stem from the events surrounding Musk's acquisition of the company in October 2022.
The former high-ranking executives claimed that Musk exhibited particular animosity towards them following his acquisition of the social-media platform in 2022. They alleged that Musk publicly declared his intention to withhold their severance to recover around $200 million from the $44 billion deal.
As per the lawsuit, Bloomberg reported that Agrawal is seeking $57.4 million, Segal $44.5 million, Gadde $20 million, and Edgett $6.8 million in severance benefits, totaling approximately $128 million.
Under the helm of Musk, Twitter, now known as X, faces numerous allegations of labor and workplace infractions, including the non-payment of severance to thousands of employees laid off post-acquisition.
Additionally, the company is embroiled in lawsuits over unpaid debts to vendors and landlords, despite purported efforts to maintain financial stability. Lawyers representing Agrawal and the former executives have accused Musk of running Twitter with disregard for legal obligations.
They assert that Musk evades responsibilities, refusing to settle debts owed to employees, landlords, vendors, and others. Musk's behavior suggests a belief that rules do not apply to him, leveraging his wealth and influence to intimidate dissenting parties.
Also Read: NLRB says SpaceX Employees were Illegally Fired After Criticizing Elon Musk's Tweets
The lawsuit references details from Musk biographer Walter Isaacson's narrative, which recounts Musk's hastened closure of the Twitter deal to terminate the executives "for cause" just before their final stock options vested.
Isaacson notes Musk's boast that this maneuver saved him roughly $200 million. The lawsuit alleges that Musk's actions exemplify a pattern of behavior where he evades financial obligations and disregards regulations, leveraging his wealth and influence to assert dominance.
It contends that Musk fabricated reasons for the executives' dismissal to avoid paying their severance benefits, subsequently appointing individuals from his companies to validate his decision.
Failed Promise
Upon assuming control, Musk promptly terminated Agrawal, Chief Financial Officer Ned Segal, Chief Legal Officer Vijaya Gadde, and general counsel Sean Edgett.
The terminations came as no shock given the circumstances. These executives had played pivotal roles in Twitter's legal battle in mid-2022, compelling Musk to finalize his acquisition of the platform despite attempts to withdraw.
As part of Musk's acquisition agreement, each executive was entitled to significant payouts, with provisions to accelerate their unvested stock awards. Agrawal, in particular, stood to gain approximately $50 million in severance payouts.
Related Article: Elon Musk's One Year Acquisition of X, Formerly Twitter, Leads to Significant Decline in Web, Mobile Users: Report
