Ex-Twitter Executives Sue Elon Musk for $128 Million in Severance Pay

05/03/2024

Elon Musk

(Bloomberg) — Four ex-Twitter executives, including former Chief Executive Officer Parag Agrawal, sued company owner Elon Musk for allegedly stiffing them on more than $128 million in severance payments after they were ousted from the company.

The former top officials said Musk showed “special ire” toward them after he took over the social-media platform in 2022, publicly vowing to withhold their severance to recoup about $200 million from the $44 billion deal, according to a lawsuit filed Monday in federal court in northern California.

Twitter, which Musk renamed X, has been accused in multiple suits of numerous labor and workplace violations, including failing to pay severance to thousands of workers laid off in the months after the takeover. The company also was accused in a raft of suits of failing to pay millions owed to vendors and landlords while purportedly trying to stay financially solvent.

“Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others. Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him,” lawyers for Agrawal and the other ex-executives said in the 38-page complaint.

A spokesperson for X declined to comment. Musk didn’t immediately respond to an email seeking comment.

As soon as he took over Twitter, Musk fired several other top-ranking executives in addition to Agrawal: Vijaya Gadde, who was the company’s top legal and policy official; Ned Segal, the chief financial officer; and Sean Edgett, Twitter’s general counsel.

The dismissals were unsurprising at the time. All of those executives had been key players for Twitter in the company’s lawsuit in the summer of 2022 aimed at forcing Musk to consummate his purchase of the platform after he tried to back out.

Each of the executives was due to receive substantial payouts as part of Musk’s agreement to buy the company, which included language that would expedite the their unvested stock awards. Agrawal alone was set to get roughly $50 million in severance payouts.

In October, Agrawal, Gadde and other former executives won a ruling from a Delaware judge requiring X to pay $1.1 million in legal expenses they incurred while they worked for the company.

In early December, X failed in court-ordered mediation to resolve claims by thousands of former Twitter employees who say they were cheated of severance pay.

Also in December, San Francisco judge rejected X’s request to dismiss a lawsuit by employees claiming they were denied 2022 bonuses, despite being promised in the months leading up to Musk’s acquisition that they’d be paid 50% of their target amounts.

The case is Agrawal v. Musk, 24-cv-01304, US District Court, Northern District of California (San Francisco).

(Updates with related court cases.)

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