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 his 2022 takeover.
When Mr. Musk bought Twitter for $44 billion, he fired Parag Agrawal, its chief executive; Ned Segal, its chief financial officer; Vijaya Gadde, its head of legal and policy; and Sean Edgett, its general counsel. Mr. Musk later renamed the company X.
The executives had clauses in their contracts stipulating that they could receive severance if Twitter was no longer a public company — so when Mr. Musk took the company private in October 2022, they were entitled to the payments, the lawsuit, filed in U.S. District Court for the Northern District of California, claims. The severance included one year’s salary plus unvested stock awards.
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 role. In the event of an involuntary termination, Mr. Agrawal was entitled to a so-called golden parachute payment of $60 million, according to a Twitter securities filing. Under those same circumstances, Mr. Segal would receive $46 million and Ms. Gadde $21 million, according to the filing.
At the time of the takeover, Mr. Musk said that he could fire the executives “for cause” to avoid paying them severance. Mr. Musk told his biographer, Walter Isaacson, that he would deny the executives’ severance payments, saving himself about $200 million. He told Mr. Isaacson he would “hunt” the executives “till the day they die.”
Lawyers for the executives wrote in court documents: “This is the Musk playbook: to keep the money he owes other people, and force them to sue him. Even in defeat, Musk can impose delay, hassle and expense on others less able to afford it.”
The executives previously sued Mr. Musk for legal fees they incurred while responding to investigations into the company. In October, a Delaware judge ordered Mr. Musk to pay them $1.1 million to cover those expenses.
A representative for X declined to comment. A lawyer for Mr. Musk did not immediately respond to a request for comment.