Parag Agrawal, Vijaya Gadde, and Two Others Sue Elon Musk for Withholding $128 Million Severance Payments
- According to the lawsuit filed at the U.S. District Court for the Northern District of California, the four former executives were entitled to receive severance if Twitter was no longer a public company.
Four former top Twitter executives including CEO Parag Agrawal and chief legal officer Vijaya Gadde are suing Elon Musk for withholding severance payments worth $128 million after he fired them in 2022. When Musk bought Twitter for $44 billion, his first move was to get rid of several of the top executives including Agrawal, Gadde, Ned Segal, chief financial officer, and Sean Edgett, general counsel. He later renamed the company X.
According to the lawsuit filed yesterday (March 4) at the U.S. District Court for the Northern District of California, the four former executives were entitled to 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 claims.
They also accuse Musk of trying to avoid paying additional expenses after he attempted to get out of the deal to acquire Twitter and failed. They also claim that Musk “has a special ire” toward the group, “because he disagreed with how they ran Twitter and clashed with them over the takeover.” Musk later told his biographer Walter Isaacson that “he would deny the executives’ severance payments, saving himself about $200 million,” adding that “he would hunt the executives till the day they die,” The New York Times reported.
The Wall Street Journal noted that the lawsuit, filed yesterday (March 4) in federal court in California, “escalates a more than yearlong dispute between the former executives and the billionaire.
In his new book “Battle for the Bird,” Bloomberg reporter Kurt Wagner has revealed that Musk began trying to acquire Twitter after Agrawal denied his request to shut down an account that tracked his private jet. The account — @ElonJet — run by Jack Sweeney, used publicly available information to track the private jet. The student at the University of Central Florida runs many accounts that track high-profile people like Taylor Swift, who recently threatened to sue him. The book includes “various anecdotes about Musk’s struggles to retain ‘anxious’ advertisers and other tales of his tumultuous tenure,” according to Mediate, a news website focusing on politics and the media. In an excerpt published in Bloomberg News, Musk “unsuccessfully petitioned” Agrawal in January 2022, to remove the account. Shortly after Agrawal denied his request, Musk started buying Twitter shares, Wagner wrote.
This “accumulation of Twitter stocks” by Musk “led to ongoing conversations with Dorsey,” and his “seeking a spot on the company’s board of directors,” But when that didn’t work out, he “began pursuing purchasing Twitter outright, with Dorsey’s encouragement. He acquired the company now known as X for $44 billion. He then sacked Agarwal, along with policy lead Vijaya Gadde, and CFO Ned Segal. He also removed Sweeney’s handle. However, he still posts travel data of Musk’s plane on other social networking sites.
Agrawal is seeking nearly $57.4 million in severance benefits; while Gadde requesting $20 million; Segal’s requested amount is about $44.5 million, and Edgett’s $6.8 million, the lawsuit shows. “Those amounts are based on one year’s salary, stock awards valued at the acquisition price of $54.20 per share and health insurance premiums,” the lawsuit says.
Last year, Agrawal, Segal and Gadde sued for reimbursement for legal expenses tied to their Twitter roles. A Delaware judge ordered Musk to pay them $1.1 million to cover those expenses.