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Musk takes over Twitter

by on28 October 2022

Has to pay $204 million to get rid of executives who stood up to him

On his first day of work at his newly bought social notworking outfit Twitter, Elon [look at me] Musk made his first business decision -- he gave $204 million to make the company's top three executives leave.

Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and Vijaya Gadde, Twitter’s head of legal policy, received a “golden parachute” clause in Twitter’s merger with Musk’s X Holdings. Musk reportedly fired all three last night upon officially taking control of the social network in a $44 billion acquisition, and will be obligated to give more than $204 million of it to those three, according to Twitter’s filing with the Securities and Exchange Commission.

Agrawal, Segal, and Gadde own roughly 1.2 million shares of Twitter, more than half of that a $34.8 million stake owned by Gadde. The trio’s roughly $65 million stake would be purchased by Musk like any other shareholder’s stock.

Additionally, a clause in the merger agreement provided accelerated vesting of promised future stock compensation — and that’s where the biggest chunk of money comes in. The “Golden Parachute Compensation” clause in Twitter’s SEC filing — which was the deal approved by Twitter shareholders — shows the trio would automatically vest stock worth $119.6 million as severance if terminated, with the largest payout there going to Agrawal at $56 million.

They’re also entitled to a year’s salary and health benefits. In 2021, Agrawal had a base pay of $623,000, while Segal and Gadde’s base pay was $600,000 each.

Gadde walks away from Twitter with nearly $74 million. Agrawal and Segal aren’t far behind her, though, at roughly $65 million and $66 million.

The firings appear to be over the way Twitter dared to take Musk to court over his U turn to buy the company and then back down. Ironically, Musk who took over Twitter to encourage free speech, did not like the way they spoke to him and forced him to do something he did not want to do. However, if these three had not done their jobs, Twitter would almost certainly have been sued by angry shareholders. Still, with that amount of cash sitting in the bank, we don't think they will be that upset.

The firings appear to have been a surprise as the executives arrived at work as normal only to be removed from the building by security.

Musk was reported to have wanted to fire 75 per cent of Twitter’s staff in an effort to pay down the company’s debt. Musk later dismissed those reports, telling employees he would not cut such a large portion of the staff. He is expected to speak to Twitter employees directly today, as he now finds himself heading a company with low morale tied to fears of layoffs and the dismantling of the company’s culture and operations. 


Last modified on 28 October 2022
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