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Four former Twitter executives sued Elon Musk on Monday, accusing the billionaire of withholding severance payments worth $128 million after he fired them from the company during its 2022 acquisition.
When Musk bought Twitter for $44 billion, he fired Parag Agrawal, its CEO; Ned Segal, his chief financial officer; Vijaya Gadde, its head of legal and political affairs; and Sean Edgett, his general counsel. Musk later changed the company’s name to X.
The executives had clauses in their contracts that stipulated that they could receive severance if Twitter was no longer a public company, so when Musk took the company private in October 2022, they were entitled to the payments, the lawsuit, states filed in the U.S. District Court for the Northern District of California. The severance package included one year’s salary plus unvested stock awards.
The lawsuit was filed against Musk, X, and several employees of Musk’s rocket company, SpaceX, which served as Twitter’s de facto human resources department after the acquisition.
Mr. Agrawal’s annual salary was $1 million and he was awarded $12.5 million in stock that was scheduled to vest incrementally, according to his Offer letter for the paper. In the event of an involuntary dismissal, Mr. Agrawal was entitled to a so-called golden parachute payment of $60 million, according to a Presentation of securities on Twitter. Under those same circumstances, Segal would receive $46 million and Gadde $21 million, according to the file.
At the time of the acquisition, Musk said he could fire executives “for cause” to avoid paying them severance. Musk told his biographer, Walter Isaacson, that he would deny severance packages to executives, saving himself about $200 million. He told Isaacson that he would “hunt” the executives “until the day he dies.”
Lawyers for the executives wrote in court papers: “This is Musk’s strategy: keep money he owes other people and force them to sue him. Even in defeat, Musk can impose delays, inconvenience and expense on others less able to afford it.”
The executives previously sued Musk for legal fees they incurred while responding to investigations into the company. In October, a Delaware judge ordered Mr. Musk pay them $1.1 million to cover those expenses.
A representative for X declined to comment. A lawyer for Musk did not immediately respond to a request for comment.