The Final Chapter in a Tumultuous Takeover Severance Dispute with Top Twitter Execs Resolved
X Corp, the company formerly known as Twitter and now led by Elon Musk, has reached a settlement in the high profile lawsuit filed by four of the social media giant’s former top executives. The dispute centered on unpaid severance compensation which the executives claimed totaled approximately $128 million following their rapid dismissal after Musk’s $44 billion acquisition in October 2022. The four plaintiffs are former CEO Parag Agrawal, former Chief Financial Officer Ned Segal, former Chief Legal Officer Vijaya Gadde, and former General Counsel Sean Edgett. They were among the first casualties of the turbulent transition to new ownership, fired almost immediately upon the deal’s closing.
The Core of the Dispute
The executives filed their lawsuit in March 2024 in a San Francisco federal court, alleging they were wrongfully terminated without cause and were deliberately denied the contractual severance payments and stock options they were entitled to. Their employment agreements provided for one year's salary plus substantial vested stock options in the event of termination following a change in company control. Musk and X Corp had consistently denied any wrongdoing, asserting that the executives were dismissed for performance-related issues that constituted cause, thereby nullifying the severance clauses. The lawsuit became a central point of contention, with the executives citing inflammatory statements from Musk's biography that suggested a deliberate plan to avoid paying out their benefits.
Confidential Terms Bring Closure to a High-Stakes Case
A recent court filing in the U.S. District Court for Northern California confirmed that a settlement has been reached between the parties. While the agreement successfully puts an end to the protracted legal wrangling, the exact terms of the settlement remain confidential. The filing indicated that the resolution is conditional upon certain near term requirements being met, leading a federal judge to postpone existing deadlines to allow for the finalization of the deal. This move signals a significant step towards closing one of the most visible and expensive legal battles stemming from the company's tumultuous takeover.
Part of a Broader Legal Trend
The settlement with the former executives follows another major legal resolution for X Corp earlier this year. In August, the company agreed to settle a separate class action lawsuit involving thousands of rank and file Twitter employees who were laid off during Musk’s mass workforce reduction and had also claimed they were owed hundreds of millions of dollars in unpaid severance. These back to back settlements indicate a strategic shift by X Corp to resolve costly, reputationally damaging acquisition litigation and clear the legal slate from the immediate aftermath of the 2022 takeover. The resolution with the top executives removes a significant financial and legal distraction for Musk and the social media platform, now operating under the X brand.