Four former top managers who were fired by tech billionaire Elon Musk when he bought Twitter want to sue him for millions in severance pay. The termination was not adequately justified.
Four former top Twitter executives, who were fired by tech billionaire Elon Musk when he bought the service, want to sue him for more than $128 million in severance pay. In more than a year, Musk’s side had only been able to give flimsy reasons for the termination, according to the lawsuit filed yesterday.
The plaintiffs include former CEO Parag Agrawal. The others involved are Ned Segal, Twitter’s former chief financial officer, Vijaya Gadde, former chief legal officer and Sean Edgett, a senior legal counsel at the company. There was initially no reaction from Musk.
Insufficient justification
Musk bought the short message service Twitter in October 2022 for around $44 billion. He resigned from the managers immediately after the takeover was completed. The reasons given included “gross negligence” and “intentional misconduct” – but the termination letters did not contain any examples of this, the lawsuit said.
Later, success bonuses to lawyers who had brought the now reluctant Musk to conclude the Twitter deal, as well as bonus payments to employees, were given as reasons.
In the lawsuit, the managers also pointed to Musk’s biography published a few months ago, which described how he wanted to quickly fire them before they could cash in their stock options. This is Musk’s strategy to keep the money he owes other people and force them to sue him, the former executives claim in the 39-page lawsuit.
Millions Share packages
The share packages play a central role in the demands of the ex-managers. Agrawal is demanding around $57.36 million. Of this, only $1 million is 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, the amount came to around 128.6 million.
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.
Sales have halved
On the other hand, Musk wanted to cancel the deal a few weeks after the takeover was announced – under the pretext that the platform had too 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. The tech billionaire also resorted to large-scale job cuts after the takeover.
Reinhard Spiegelhauer, ARD Los Angeles, tagesschau, March 5th, 2024 9:10 a.m