Elon Musk could stop payouts to fired executives as provided under Twitter’s compensation scheme. Reports stated that Twitter’s approximate 7,500 employees may be due $100 million under the company’s contract.
Elon Musk officially owns Twitter after trying to get out of USD 44 million deal. (Image: Reuters)
By India Today Web Desk: Elon Musk’s buyout of Twitter has been noted for more reasons than one. Assuming top leadership of the micro-blogging platform on late Thursday evening, Musk was quick to put his priorities in place. It may be noted that Musk’s Twitter acquisition was under scrutiny for months now as he wanted to get out of his $44 million deal to seal the deal.
Also, his decisions, right after he took over Twitter, speak volumes about his ownership. Musk’s first move, reportedly, was to fire top executives of the entity.
In fact, the Tesla owner wrote to Twitter advertisers and said that he had bought Twitter in a bid to ‘help humanity’ amid the ‘great danger that social media will splinter into far right wing and far left wing echo chambers that generate more hate and divide our society’. Thereafter, his first few decisions as the Twitter owner were to fire Parag Agrawal, the chief executive officer, Ned Segal, the chief financial officer and Vijaya Gadde, the chief legal officer.
Now, legal experts are concerned about Musk’s financial liabilities that lay ahead, especially employee compensation and maintaining a thick cash flow for the business. The New York Times stated that Twitter’s approximate 7,500 employees may be due $100 million under the company’s compensation programme.
As per reports, Musk will be required to pay more than $200 million to the aforesaid three fired executives. Agrawal is slated to receive the largest payout. This was finalised when he took over as the CEO of Twitter in November 2021 because he signed the deal with a ‘golden parachute‘ clause. In the contract with Twitter, he was guaranteed severance compensation of about $42 million. This could have been realised if Twitter let go of Agrawal within a year of his assuming the office.
Almost a year later, Musk may have fired Parag Agrawal to revamp the social media platform that he owns.
However, a default in advancing compensation to employees and the ambiguity of whether the fired employees will receive the money may trigger lengthy litigation. Reports suggest that Musk will need to make the payments if he decided to fire more employees before Tuesday as the compensation scheme will vest on on that day.
Shortly after taking over Twitter, Musk tweeted a cryptic update reading —‘bird is freed‘ — seemingly flagging his aim to make the platform open to free speech. As per Forbes Billionaires Rich List, Musk’s wealth is estimated to be worth $ 221.3 billion.
Oct 29, 2022