Fired without severance pay
Former Twitter bosses want millions from Musk
March 5, 2024, 3:08 a.m
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The ink on the Twitter purchase agreement is not yet dry before the new owner throws the executive suite out the door. There are no severance payments. The former top managers feel cheated and file a lawsuit.
Four former top Twitter managers who Elon Musk fired after purchasing the service want to sue him for more than $128 million in severance pay. In more than a year, Musk’s side was only able to give flimsy reasons for the termination, according to the lawsuit, which was filed by former Twitter boss Parag Agrawal, among others, in a federal court in California. “Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to trample on anyone who disagrees with him,” the plaintiffs wrote. There was initially no reaction from Musk.
Musk bought Twitter in October 2022 for around $44 billion. Immediately after the takeover was completed, he fired the managers. The reasons given included “gross negligence” and “intentional misconduct” – but the termination letters did not contain any examples of this, according to the lawsuit. Success bonuses to lawyers who had helped Musk, who had been reluctant at the time, to conclude the Twitter deal, as well as bonus payments to employees, were later cited as justifications.
In the lawsuit, the managers also referred to Musk’s biography, which was published a few months ago. Author Walter Isaacson describes how Musk wanted to quickly fire executives before they could cash in their stock options. The share packages also play a central role in the demands of the ex-managers. Agrawal is demanding around $57.36 million. Only $1 million of that amount relates to the annual salary to which he is entitled according to the severance agreement. Former CFO Ned Segal is demanding almost $44.5 million and former legal managers Vijaya Gadde and Sean Edgett are demanding $20 and almost $6.8 million. In total, this amounts to around 128.6 million dollars (around 118.5 million euros).
Trouble began even before the takeover
Musk was already at loggerheads with Twitter management months before the takeover. On the one hand, he accused Gadde in particular of suppressing conservative political views on the online service. However, Agrawal blocked Musk’s demands to fire Gadde during the takeover process. On the other hand, Musk wanted to cancel the deal a few weeks after the takeover was announced – under the pretext that the user numbers were inflated by many automated bots. But Twitter management went to court to enforce the purchase agreement. Musk finally gave in because he expected to lose the case.
Musk has now renamed Twitter to X and wants to use the service to build an all-purpose platform for communication and job searches, among other things. He admitted several times that sales had halved after the takeover due to the departure of large advertising customers. Immediately after the takeover, not only the top managers had to leave, but also around half of the employees. A good year later, 1,500 of the previous 8,000 employees were still with the company.