Four former Twitter executives filed a lawsuit against Elon Musk on Monday, alleging that he withheld severance payments totaling $128 million after dismissing them from the company following his takeover in 2022.
Upon acquiring Twitter for $44 billion, Mr. Musk terminated Parag Agrawal, the CEO; Ned Segal, the CFO; Vijaya Gadde, the head of legal and policy; and Sean Edgett, the general counsel. The company was later rebranded as X.
According to the lawsuit filed in U.S. District Court for the Northern District of California, the executives had clauses in their contracts entitling them to severance if Twitter ceased to be a public company. When Mr. Musk privatized the company in October 2022, they claim they were owed the payments, which included a year’s salary and unvested stock awards.
Mr. Agrawal’s annual salary was $1 million, and he was granted $12.5 million in stock set to vest gradually. In the event of involuntary termination, Mr. Agrawal was due a golden parachute payment of $60 million, as per a Twitter securities filing. Under the same circumstances, Mr. Segal would receive $46 million and Ms. Gadde $21 million, according to the filing.
At the time of the takeover, Mr. Musk indicated he could dismiss the executives “for cause” to avoid paying them severance. He mentioned to his biographer, Walter Isaacson, his intention to deny the executives’ severance payments, saving himself approximately $200 million. He expressed his determination to pursue the executives indefinitely.
In court documents, the executives’ lawyers stated: “This is the Musk playbook: to retain the money he owes others and compel them to take legal action. Even in defeat, Musk can cause delays, inconvenience, and expenses for those less capable of bearing it.”
Previously, the executives had sued Mr. Musk for the legal fees incurred during investigations into the company. In October, a Delaware judge ruled in favor of the executives, ordering Mr. Musk to pay them $1.1 million to cover those costs.
A spokesperson for X declined to provide a comment. An attorney representing Mr. Musk did not immediately respond to a request for comment.
