Elon Musk unceremoniously fired top Twitter executives after the completion of his $44 billion takeover of the microbolgging platform earlier this week.
Fired twitter CEO Parag Agrawal had been personally escorted out of his office in the Twitter headquarters building in San Francisco. Three other top executives, including policy chief Vijaya Gadde, who was instrumental in the ouster of former US President Donald Trump from the platform, were also shown the door within hours of the Twitter takeover by Trump.
Multiple media reports said the fired executives collectively stood to receive more than $120 million in contract payouts, severance benefits in stock options. Some reports highlighted that Agrawal’s job contract had specifically marked out a multi-million dollar compensation if he was fired before the completion of one year in office. Agrawal would have completed one year as Twitter CEO by November 21.
Early reports speculated if Musk was unmindful of these clauses and that his rash actions had cost the world’s richest man million, if not billions. Apart from Agrawal and Gadde, Musk had also summarily fired Twitter’s chief financial officer Ned Segal and Twitter general counsel Sean Edgett.
However, according to the latest reports, Musk might not pay hefty sums to Agrawal and the other executives. Musk fired top executives immediately after completing the long-drawn Twitter takeover deal in order to avoid hefty severance payouts.
Musk had earlier accused the top leadership at Twitter of misleading him and the investors about the actual number of fake accounts on the platform. Musk had highlighted this as a chronic problem with Twitter and pledged to walk away from the deal because of this.
The Information reported that Musk fired the executives on taking charge of the company in order to demonstrate ’cause’. By summarily sacking the top leadership Musk brought attention to the cause — ie the breach of company policies. This would enable Musk in a potential legal fight over the denial of severance pay and unvested stock awards.
LightShed analyst Rich Greenfield also highlighted the existence of ’cause’ in the latest twitter firings, suggesting that this would prevent Twitter from giving the executives unvested stock from vesting.
Reuters reported that neither Twitter nor the fired executives commented on the latest development.
The fired Twitter executives The fired Twitter executives will get the severance payments “unless Elon Musk had cause for termination, with cause in these cases usually being that they broke the law or violated company policy,” Courtney Yu, Director of research at Equilar, told Reuters.
In another report, NYT said that Musk is about to announce more extensive job cuts at Twitter. These job cuts could be unveiled before November 1, in order to avoid stock grants due on that day.
