Twitter Execs Fired by Musk Nervous that Hefty Severance Packages Won’t be Paid
By: Hellen Zaboulani
Elon Musk, who has recently taken over the reins at Twitter, is already making waves with his changes.
As reported by the NY Post, on Thursday, very shortly after completing the $44 billion takeover of the social media giant, Musk proceeded to fire four of Twitter’s top executives including: Chief Executive Officer Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Officer Vijaya Gadde, and General Counsel Sean Edgett.
A report by the NY Times said that the execs were fired in order to avoid having to pay them eight-figure severance packages. Musk reportedly fired the executives “for cause”, which if sustainable would void a clause in their contract entitling them to payouts worth tens of millions of dollars in severance and unvested stock options, as per the Times article on Saturday. On Friday, Reuters reported that research firm Equilar said that Agrawal, Segal, and Gadde are in line to receive golden parachutes worth a collective sum of $122 million.
Equilar, a company which researches executive compensation, estimates that the CEO Agrawal’s exit payout should come to roughly $57.4 million, while CFO Segal is expecting to collect $44.5 million following his termination. Gadde, the company’s top lawyer who has become mired in controversy as a result of her reported aggressive stance in policing Twitter and banning users who flout the rules, is expected to get a $20 million payout, as per Equilar. As per the Post, the fired executives will not hesitate to take legal action to make sure Muskdoesn’t play around with their exit payments.
The Times report also said that Musk was planning for more mass layoffs across the board at Twitter before the Nov. 1st deadline, in order to avoid having to pay out severances in the form of stock grants. Before he officially took over the company, there had been rumors that Musk wanted to lay off up to 75 percent of Twitter’s 7,500-person workforce. Musk denied the allegations.
On Sunday, Musk reacted to a Twitter user who posted a snippet of a New York Times story, which claimed that he was planning on firing employees en-mass before their year-end compensations “kicks in on Tuesday.” “This is false,” Musk responded to the post on Twitter. Last week, at Twitter’s San Francisco headquarters, Musk hadreportedly reassured employees, telling them he had no mass layoff plans.
As per the Post, looking back at Musk’s relationship with the execs, their layoffs weren’t that surprising. The 51-year-old Tesla and SpaceX CEO and engineer had not kept his disdain for Twitter’s management undercover. There were plenty of public quarrels between Musk and Agrawal in the weeks and months before the takeover.
Musk would point a finger at the team alleging they undercounted the number of bots and spam accounts on the social media platform. In response, Agrawal would defend Twitter’s efforts to limit spam and bot accounts. Musk had infamously commented to the CEO’s thread with a poop emoji. The animosity continued when Musk tried to pull out of the $44 billion acquisition. Twitter had sued the billionaire in Delaware Court of Chancery, prompting him to follow through in closing the deal.