Four former top managers of Twitter, the tech billionaires Elon Musk (52), who was fired 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 was only able to give flimsy reasons for the termination, according to the lawsuit filed on Monday evening (CET) by, among others, former boss Parag Agrawal (39) and the former legal manager Vijaya Gadde (50). There was initially no reaction from Musk.
Musk had the short message service Twitter bought in October 2022 for around $44 billion. He fired 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 Musk, who had been reluctant at the time, to conclude the Twitter deal, as well as bonus payments to employees, were given as justifications.
The managers also pointed in the lawsuit to Musk’s biography published several months ago, which described how he wanted to quickly fire them before they could cash in their stock options.
Did Musk want to prevent the stock options from being paid out?
The share packages also play a central role in the demands of the former 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 (50) is demanding almost $44.5 million and the former legal managers Gadde and Sean Edgett are asking for 20 and almost $6.8 million. In total, an amount of around 128.6 million dollars (around 118.5 million euros) was raised.
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. 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. After the takeover, the tech billionaire also resorted to large-scale job cuts.