Former Twitter Executives Get Back at Elon Musk, Demands $128M Over Unpaid Severance Packages

By Moon Harper

Mar 05, 2024 12:05 AM EST

Former Twitter executives sue Elon Musk, claiming one hundred twenty-eight million dollars over alleged unpaid severance.

The executives, including former chief Parag Agrawal, allege that Musk fired them without cause when he took over Twitter, now X, and fabricated reasons to avoid paying them, citing it is part of a "larger pattern" of not paying former employees what they are owed. Musk has not responded to the allegations.

The Unpaid Severance Lawsuit

The long-standing severance lawsuit filed by Agrawal, along with former Chief Financial Officer Ned Segal, former Chief Legal Officer Vijaya Gadde, and former General Counsel Sean Edgett, claim their one year's salary and stock awards entitlement that amounts to over fifty-seven million dollars for Agrawal, over forty-four million dollars for Segal, over twenty million dollars for Gadde, and over six million dollars for Edgett.

Musk acquired Twitter for forty-four billion dollars in 2022, which he initially tried to back out of. Still, due to a lawsuit threat, he proceeded with the controversial agreement, swiftly terminating key leaders, including the four executives.

Fabricated Reason for Termination

As stated in the lawsuit, the four individuals were informed of their termination due to "gross negligence and willful misconduct." Specific instances cited included approving retention bonuses for Twitter employees, many of whom were terminated after the acquisition.

The lawsuit contends that Musk was displeased about being compelled to finalize the acquisition, asserting he has sought to evade paying the millions owed to the executives, disregarding the severance agreements that outlined compensation in the event of the executives' unjustified termination.

Allegations of Unfair Compensation and Payment Evasions

The ongoing dispute over the funds has persisted between the two parties, culminating in completing the administrative procedures, as stated in the lawsuit. X has previously asserted that staff received full payment, while Musk's attorney, Alex Spiro, did not respond to the BBC's request for comment.

In the lawsuit, the executives leveled accusations against Musk, alleging that he transformed the company into an entity that disregards legal obligations and fails to settle its debts. According to the federal court filing in California, Musk evades payments, disregards regulations, and employs his wealth and influence to overpower those who oppose him.

The previous year, a former human resources officer at the platform initiated a class action lawsuit, alleging that the company neglected to fulfill approximately five hundred million dollars (£385 million) in severance payments owed to former employees. Some 20 persons employed by the company in Ghana during the acquisition about 16 months ago informed the BBC in February that they had only recently received their owed funds.

The lawsuit filed by the four executives seeks to paint Musk as someone who evades settling his financial obligations and treats his employees poorly. According to Agrawal and his former colleagues' allegation in the lawsuit, Musk's reluctance to compensate is "part of a larger pattern of refusing to pay Twitter's former employees the benefits and other compensation they are due."