Former Twitter/X executives sue Elon Musk for $128 million in unpaid severance

Four former Twitter/X executives are suing both the company and its owner Elon Musk for over $128 million in unpaid severance. It's just the latest in thousands of such claims brought against the beleaguered social media platform following its Musk-mandated mass layoffs.

In the lawsuit filed to a California federal court on Monday, Twitter/X's former Chief Executive Officer Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Officer Vijaya Gadde, and General Counsel Sean Edgett accused Musk of deliberately withholding their severance entitlements. The billionaire immediately fired the executives when he took over Twitter/X in October 2022, a move the plaintiffs claim was retaliatory.

"Musk has a special ire toward [the plaintiffs, who] appropriately and vigorously represented the interests of Twitter’s public shareholders throughout Musk’s wrongful attempt to renege on the deal," read the lawsuit. "For their efforts, Musk vowed a lifetime of revenge."

Musk initially agreed to buy Twitter/X for approximately $44 billion in April 2022, a price which was significantly above the company's valuation at the time. He subsequently attempted to back out of the deal just a few months later, prompting Twitter/X to sue in an attempt to enforce the agreement. The sale ultimately went through, however it appears Musk still holds a significant grudge about the whole ordeal — and particularly at the executives who took him to court.

The plaintiffs' complaint even cites Musk's authorised biography, in which his official biographer quoted him as saying he would "hunt every single one of" the former Twitter/X executives "till the day they die."

"Because Musk decided he didn’t want to pay Plaintiffs’ severance benefits, he simply fired them without reason, then made up fake cause and appointed employees of his various companies to uphold his decision," the plaintiff's complaint read. "He claimed in his termination letters that each Plaintiff committed 'gross negligence' and 'willful misconduct' without citing a single fact in support of this claim."

Agrawal, Segal, Gadde, and Edgett each claim they are contractually entitled to approximately $57.4 million, $44.5 million, $20 million, and $6.8 million respectively.

Unfortunately for the plaintiffs, Twitter/X is unlikely to part with that money without a fight. The company has made some infamously questionable financial decisions under Musk's rule, including refusing to pay rent, Google Cloud bills, or its Amazon Web Services bills. This isn't even the first severance dispute Twitter/X has faced since Musk laid off approximately 80 percent of its staff. Last September the company agreed to settlement talks with approximately 2,000 former employees who also claimed their entitlements had been withheld.

"Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others," the executives' complaint alleges. "Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him."

Twitter/X has reportedly dropped in value by over 70 percent since Musk's acquisition, as attempts to build new revenue streams have failed to compensate for the income lost by big advertisers' mass exodus. Considering this, it isn't surprising that Musk might want to cling to every cent he can.