In a significant legal turn of events, a group of former Twitter executives, spearheaded by the company’s ex-CEO Parag Agrawal, have filed a lawsuit against tech magnate Elon Musk and his enterprise X. The lawsuit revolves around claims of unpaid severance benefits amounting to approximately US$128 million following Musk’s tumultuous acquisition of Twitter in October 2022.
A string of high-profile dismissals after Musk’s takeover
The saga began with Elon Musk’s high-profile takeover of Twitter, which was met with widespread attention and controversy. Immediately following the acquisition, Musk took decisive action by terminating several top executives, including Agrawal, CFO Ned Segal, chief legal officer Vijaya Gadde, and general counsel Sean Edgett. This action forms the crux of the current legal battle. The lawsuit alleges that Musk harboured a specific animosity towards these executives due to their role in the protracted legal wrangling that eventually forced Musk to complete the acquisition following his earlier attempts to back out.
In the lawsuit, the severance amounts claimed by each executive are detailed: Agrawal is purportedly owed US$57.4 million, Segal US$44.5 million, Gadde US$20 million, and Edgett US$6.8 million, totalling around US$128 million.
Musk’s alleged strategic manoeuvring
The lawsuit draws upon the accounts of Musk’s biographer, Walter Isaacson, portraying a scenario where Musk expedited the finalisation of the Twitter deal. This acceleration was allegedly to dismiss the executives “for cause” right before their final stock options were set to vest. Isaacson remarks that Musk gloated about saving nearly US$200 million through this manoeuvre.
The complaint paints Musk as a figure who shirks his financial responsibilities and flouts rules due to his immense wealth and influence. It accuses him of terminating the executives without legitimate grounds, fabricating justifications for their dismissal, and subsequently using personnel from his various companies to corroborate his decisions.
Historical context and silence from X
This lawsuit is not an isolated incident but follows a pattern of legal challenges faced by Twitter after Musk’s takeover. Another lawsuit had previously accused Twitter of failing to pay its former employees over US$500 million in severance. Additionally, Agrawal, Segal, and Gadde had sued Twitter over unpaid legal fees stemming from various shareholder lawsuits and investigations triggered by Musk’s takeover. X has not commented on the new lawsuit as of the latest updates.
This ongoing legal dispute underscores corporate acquisitions’ complex and often contentious nature, particularly in high-stakes technology firms. It throws into relief issues surrounding corporate governance, executive compensation, and the implications of leadership changes in the tech industry.
