Four former Twitter executives sued Elon Musk on Monday, accusing them of withholding $128 million worth of severance pay after they fired them from the company during the company's 2022 acquisition.
When Musk bought Twitter for $44 billion, he fired CEO Parag Agrawal. Ned Segal Chief Financial Officer; Mr. Vijaya Gadde, Head of Legal Affairs and Policy; and its general counsel Sean Edgitt. Musk later changed the name of Company X.
Executives had a clause in their contract that said they could receive severance pay if Twitter ceased to be a public company, so when Musk took the company private in October 2022, was entitled to payment, a lawsuit filed in U.S. District Court. Northern District of California Claims. The severance package included one year's salary and unvested stock awards.
The lawsuit was filed against Mr. Musk, Mr.
Agrawal's offer letter for the position says he will earn an annual salary of $1 million and receive $12.5 million in stock that will vest in stages. In the event of an involuntary termination, Mr. Agrawal was entitled to a so-called golden parachute payment of $60 million, according to Twitter Securities filings. Under similar circumstances, Mr. Segal would receive $46 million and Mr. Gadde would receive $21 million, according to the filing.
At the time of the deal, Musk said executives could be fired “for cause” to avoid paying severance packages. Mr. Musk told biographer Walter Isaacson that he would save about $200 million by refusing to pay senior executives severance packages. He told Isaacson that he would “hunt” the executives “to death.”
Lawyers for the executives wrote in court documents: Even if he loses, Mr. Musk can still impose delays, hassles and expenses on others who can't afford to pay them. ”
Executives previously sued Musk for legal costs incurred in responding to investigations into the company. In October, a Delaware judge ordered Musk to pay $1.1 million to cover those costs.
A representative for X declined to comment. Musk's lawyer did not respond to a request for comment.