Elon Musk Faces Lawsuit Over Unpaid Severance to Twitter Executives

Elon Musk is embroiled in a legal battle with former top executives of Twitter, now X, who allege that he owes them over $128 million in unpaid severance following his acquisition of the social media platform.

The four executives, led by former chief Parag Agrawal, claim that Musk terminated them without valid reasons as he assumed control of Twitter, now X, and concocted false justifications to evade paying them their due severance package. They argue that this action is part of a broader pattern of Musk’s refusal to compensate former employees properly.

Parag Agrawal, along with former CFO Ned Segal, former CLO Vijaya Gadde, and former general counsel Sean Edgett, filed the lawsuit, contending that, based on the severance plan in place, they are entitled to one year’s salary and stock awards. The total owed amounts to more than $128 million across the four executives.

Musk’s acquisition of Twitter for $44 billion in 2022 was marred by controversy, with Musk initially attempting to back out of the deal before proceeding under the threat of legal action. Following the acquisition, Musk swiftly terminated key leaders, including the four executives now suing him.

The lawsuit alleges that Musk cited reasons such as “gross negligence and willful misconduct” for the terminations, including actions like approving retention bonuses for Twitter employees. However, the plaintiffs argue that these allegations were merely pretextual, driven by Musk’s resentment over the acquisition.

The legal battle has persisted, with the executives accusing Musk of flouting legal obligations and refusing to honour the severance plans laid out for them. Despite claims by X that all staff were compensated adequately, the executives maintain that Musk’s actions reflect a pattern of avoiding financial responsibilities.

This lawsuit is not the first legal challenge Musk has faced regarding compensation issues. Previously, a class action lawsuit was filed against Twitter for allegedly failing to pay around $500 million in owed severance to former employees.

The executives’ legal action paints Musk as someone who disregards financial obligations and mistreats employees, alleging that his behaviour extends beyond this instance to a broader pattern of withholding rightful compensation from former employees of Twitter.