A fiery legal battle has erupted between Elon Musk and four former top executives of Twitter, now known as X Corp. The executives, Parag Agrawal (ex-CEO), Ned Segal (ex-CFO), Vijaya Gadde (ex-CLO), and Sean Edgett (ex-General Counsel), are suing Musk for over $128 million in unpaid severance pay.
The dispute stems from the tumultuous takeover of Twitter by Musk in 2022. The executives, who led Twitter during the lengthy and often hostile acquisition process, allege they were wrongfully terminated without cause and denied their rightful severance packages. Musk, on the other hand, claims they were fired for "gross negligence and willful misconduct" and are not entitled to any payout.
This lawsuit, filed in California, marks a significant escalation in an ongoing conflict between the former executives and the billionaire. The complaint accuses Musk of employing his "playbook" – refusing to fulfill financial obligations and forcing legal action. The executives further allege that Musk harbors "special ire" towards them due to disagreements regarding Twitter's management and the acquisition process.
The crux of the case revolves around the substantial severance packages, totaling nearly $128 million, that the executives believe are rightfully theirs. These packages include one year's salary, stock awards valued at the acquisition price, and health insurance premiums. According to the lawsuit, such packages are standard practice and crucial for corporate governance because they incentivize executives to act in the best interests of shareholders during acquisitions.
The executives further claim that Musk fabricated justifications for their dismissals in an attempt to avoid paying them. They refute the alleged reasons for their firing, such as questionable legal fees and handling of employee bonuses, as "pretextual and insupportable." They also emphasize that these decisions received prior approval from the Twitter board.
This lawsuit adds fuel to the fire of existing grievances against X Corp. Since Musk's takeover, the company has faced numerous accusations of delayed payments, impacting landlords, consultants, and other ex-employees. Some of these cases have been settled, but the current lawsuit exposes further legal challenges X Corp. must navigate.
Intriguingly, the lawsuit references Walter Isaacson's biography of Musk, quoting him saying he expedited the acquisition to prevent the executives from receiving vested stock options. This allegation further complicates the situation, potentially suggesting Musk's motivation for their termination was driven by financial considerations rather than performance issues.
As the legal battle unfolds, it remains to be seen whether the court will side with the executives and award them their requested severance, or uphold Musk's decision and deny their claims. This case underscores the complexities of high-profile acquisitions and the potential for legal disputes that can arise in their aftermath.
