After termination
Elon Musk had a “special anger” against the Twitter bosses – now they are suing him for $128 million
Elon Musk bought Twitter almost a year ago and has since renamed it X
© NurPhoto / Imago Images
When Elon Musk took over Twitter, he also threw out a large part of the workforce – and started at the top. Now four of the former top managers are suing because Musk is said to have plucked the reasons out of thin air. Proof can be found in a biography of the billionaire.
After Elon Musk took over Twitter, the shock for the workforce didn’t take long to arrive. Within a very short time, thousands of employees were thrown out onto the streets, the rules of the short message service and ultimately even its name were changed. The decision to throw out the bosses after a very short time could now be expensive for Musk. In a lawsuit they make serious allegations against him. He is said to have fired her out of personal dislike.
This emerges from the lawsuit filed by four former top managers of the service, now renamed X. The plaintiffs are former CEO Parag Agrawal, his chief financial officer Ned Segal and the company’s two top lawyers Vijaya Gadde and Sean Edgett. In total, they are demanding $128 million (around €118 million), which they would actually be entitled to under the contract. And which Musk would have deliberately denied them.
Musk refuses to pay millions of dollars
“It’s Musk’s typical game: he keeps the money that other people are actually entitled to and forces them to sue him”; says the lawsuit. The sum consists of contractually guaranteed severance payments, a combination of an annual salary and share bonuses based on the stock market price at the time of the takeover. Agrawal is demanding the largest share at $57.4 million, Segal is asking for $44.5 million, Gadde is asking for $20 million and Edgett is asking for $6.8 million.
Even though these severance payments seem very high, they serve a purpose, the lawsuit argues. The payments are intended to ensure that the company management continues to do its job even after the takeover – and thus enables an orderly transition of ownership. This is also in the interests of the company and the shareholders.
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“Special anger” against the Twitter bosses
The lawsuit suspects that Musk doesn’t want to pay them due to “a particular anger” against the management team. As a user, Musk had already criticized the leadership’s decisions in detail. After he loudly announced the takeover of Twitter, Musk actually wanted to back down. It was only after a lawsuit from the management that a court forced him to buy it. It turned out to be a lousy investment: After Musk paid $44 billion for the service in October 2022, X is now worth just under $12 billion.
The reasons for termination were merely pretextual. “Because Musk didn’t want to pay the plaintiffs’ severance payments, he simply fired them without cause and then made up made-up reasons,” the lawsuit accuses him. Officially, the managers were fired for alleged mistakes in handling legal fees, wasting money and mismanagement of other employees’ severance pay. However, these processes were approved by the board at the time, according to the lawsuit.
Targeted stab at the Twitter leadership
Evidence that Musk specifically wanted to cheat her out of money was also found in a biography. In Walter Isaacson’s book “Elon Musk,” published in September. The biography” (You can find a reading sample here) it is described, for example, that the billionaire had deliberately brought the purchase forward a day in order to reduce the value of the severance package. “There’s a $200 million difference if we close this evening instead of tomorrow morning,” Musk is said to have said, according to the book, referring to the stock value of the severance packages.
In fact, this is not the first lawsuit that X has had to face over its handling of severance packages. After thousands of employees were fired, many complained about the lack of payments and apparently only received them after legal disputes. The office landlords, various service providers and suppliers to the company also only received their money through legal proceedings.
Sources: Wall Street Journal, Tech Crunch, Axios