Elon Musk will be settling a $128 million lawsuit with four former Twitter (now X) executives, including former CEO Parag Agarwal. The billionaire entrepreneur had taken over the social media platform in 2022, following which he fired Agarwal, CFO Ned Segal, and top lawyers Sean Edgett and Vijaya Gadda.
These executives did not receive severance payments, which they claim is because they tried to hold Musk to his $44 billion commitment when he tried to back out of buying the company. The lawsuit cites Walter Isaacson’s authorized biography of Musk, which quotes him saying that he would “hunt every single one” of Twitter’s C-suite “till the day they die.”
READ: Elon Musk files motion to dismiss SEC lawsuit (
Isaacson’s book also reportedly claims Musk did not want the executives to collect their severance or vest the stock options “because of the price he was paying and his conviction that Twitter’s management had misled him.” Instead, the book says Musk pushed through a faster close of the Twitter sale so he could fire the executives “for cause.” The lawsuit claims the cause in the executives’ termination letters were not substantiated.
The former executives claim that Musk falsely accused them of misconduct, and denied them severance pay. The plaintiffs say they each are owed one year’s salary and hundreds of thousands of dollars’ worth of stock options. Musk and X denied wrongdoing, saying the executives were fired for misconduct.
The terms of the settlement were not disclosed. A federal judge on Oct.1 pushed back filing deadlines and a hearing in the case so the settlement can be finalized. In August, X had agreed to settle a separate lawsuit by rank-and-file Twitter employees who lost their jobs during mass layoffs and claimed they were owed $500 million in unpaid severance.
READ: Elon Musk names new chief financial officer for xAI (
These are not the only lawsuits the Tesla owner is embroiled in. Musk also recently filed a motion to dismiss the U.S. Securities and Exchange Commission’s civil lawsuit that accused him of waiting too long in 2022 to reveal his large stake in social media platform Twitter, later renamed as X. The SEC alleged that Musk violated federal securities laws by failing to promptly disclose his ownership after crossing the 5% threshold, delaying the disclosure by 11 days.
During this period, Musk reportedly accumulated over $500 million worth of shares at prices the SEC contended were artificially suppressed, increasing his stake to 9.2% by early April 2022. This delay, according to the SEC, deprived other investors of timely information that could have influenced their investment decisions. Musk’s legal team argued that the delayed disclosure was unintentional and corrected promptly once discovered.