Elon Musk Hit with €118M Severance Suit by Ex-Twitter Execs

High-stakes Legal Battle Erupts Over Twitter Severance Claims

by Zain ul Abedin
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Elon Musk Hit with €118M Severance Suit by Ex-Twitter Execs
© Leon Neal/Getty Images

In a groundbreaking legal action, former Twitter executives, now part of Elon Musk's rebranded X Corp., have initiated a lawsuit against the billionaire entrepreneur, claiming they are owed over $128 million (approximately €118 million) in severance payments.

The group, consisting of Twitter's ex-CEO Parag Agrawal, CFO Ned Segal, Chief Legal Counsel Vijaya Gadde, and General Counsel Sean Edgett, allege they were unjustly terminated on the very day Musk finalized his takeover of Twitter in 2022, subsequently renaming it X.

The lawsuit, lodged this Monday, accuses Musk of fabricating reasons to dismiss them to avoid severance payouts, allegedly appointing staff from his other ventures to validate his actions. This legal battle underscores what the plaintiffs describe as Musk's habitual avoidance of financial commitments, pointing to numerous former Twitter employees who have also sued Musk for severance pay after being laid off en masse.

Filed in the Northern District of California's federal court, the complaint portrays Twitter under Musk's helm as a violator of contractual obligations, highlighting his refusal to compensate employees, landlords, vendors, and others.

The plaintiffs criticize Musk's alleged disregard for legal norms and his purported use of wealth and influence to overpower dissent. At the time of writing, representatives for Musk and the San Francisco-based X Corp. have not commented on the lawsuit.

Severance Dispute Details

The plaintiffs assert they were entitled to severance packages comprising a year's salary plus unvested stock awards at Twitter's acquisition price. Musk's purchase of the company for $44 billion, or $54.20 per share in October 2022, set the stage for their termination without what they argue was legitimate cause.

The severance agreements specified "cause" for termination in strict terms, which included felony conviction, "gross negligence," or "willful misconduct." The lawsuit claims Musk cited "gross negligence and willful misconduct" related to Twitter's payment of legal fees for the acquisition's completion as grounds for their dismissal.

However, the executives contend that fulfilling these payments was part of their duty to the company. The legal document further highlights a "staggering" amount of litigation faced by X Corp. for unpaid invoices, reflecting, as per the lawsuit, Musk's nonchalant attitude towards his financial obligations with a purported stance of "let them sue" in response to the increasing legal challenges.

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