Elon Musk Faces Twitter Executives Lawsuit

Four former top executives of Twitter have filed a lawsuit against billionaire Elon Musk, demanding $128 million in unpaid severance. The legal battle began before Musk's $44 billion takeover of Twitter in October 2022.

Legal Battle Unfolds

The executives, including former CEO Parag Agrawal, former CFO Ned Segal, former chief legal officer Vijaya Gadde, and former general counsel Sean Edgett, filed the lawsuit in California federal court on Monday. The lawsuit alleges that Musk attempted to back out of the deal and then fired the executives to avoid paying their severance.

Allegations Against Musk

According to the lawsuit, Musk vowed revenge against the executives for leading Twitter in suing him to finalize the deal. The lawsuit further claims that under Musk's control, Twitter has been neglecting payments to employees, landlords, vendors, and others. Musk is described as someone who believes rules do not apply to him and uses his wealth and power to overpower those who oppose him.

Legal Response

As of now, an attorney representing Musk has not provided any comments regarding the lawsuit.

Musk Overhauls Twitter Leadership and Faces Lawsuit

In a bold move in 2023, Elon Musk rebranded Twitter as X, shaking up the platform's leadership. Musk cited “gross negligence” and “willful misconduct” as reasons for firing several executives, a claim they have strongly refuted.

Denying Severance and Benefits

The lawsuit highlights Musk's failure to provide severance or benefits to multiple former executives. This has sparked backlash, with Agrawal leading the charge seeking over $57 million in compensation. This includes one year's salary, stock awards based on Musk's $54.20 acquisition price, and health insurance premiums. Segal aims for $44 million, Gadde for $20 million, and Edgett for $6.8 million.

Importance of Severance Benefits

The legal battle emphasizes the significance of severance benefits in corporate governance. These benefits play a crucial role in aligning the interests of executives and shareholders during a corporate acquisition. Without this safety net, executives may act against shareholders' best interests, hindering potential mergers or takeovers.