It was a popular demand, although it has taken almost a year and a half to arrive. The former bosses of Twitter, including its CEO, Parag Agrawal, had multimillion-dollar protection against dismissal when Elon Musk bought the social network, which he later renamed X. Musk, however, refused to pay those compensation and even boasted of having made a masterstroke to advance the closing of the operation and fire them appropriately. Now, Agrawal and four other directors are demanding compensation of 128.6 million dollars (about 119 million euros) from the owner of the social network in a lawsuit filed in a California court.
The four plaintiffs are Agrawal; CFO Ned Segal; the head of legal and content moderation, Vijaya Gadde, and the general counsel, Sean Edgett. Firing the four was the first decision Musk made upon taking control of Twitter. These executives had been decisive in the legal battle waged against Elon Musk to force him to buy the social network when he wanted to back out, citing all kinds of baseless excuses.
The operation brochure already pointed out the armor or “golden parachutes,” as the document called it, of several executives. In the lawsuit, Agrawal claims $57.4 million; Segal, with 44.5 million dollars; Gadde, 20 million, and Edgett, 6.8 million. Sarah Personette, director of clients, who had a shield of another 20 million, was not included in the first round of layoffs nor is she a party to the lawsuit. The four plaintiffs are therefore seeking $128.6 million in outstanding damages, plus additional equitable relief, plus interest, plus legal fees.
The lawsuit is a stark description of Musk's capricious and tyrannical way of doing business. The former executives say that the tycoon showed “particular anger” toward them after taking over the social network in 2022, publicly promising to withhold his compensation to recover some $200 million from the $44 billion operation, according to records. in the lawsuit filed Monday in federal court in Northern California. The reason: “They adequately and vigorously represented the interests of Twitter's public shareholders throughout Musk's illicit attempt to renege on the agreement. For his efforts, Musk promised to take revenge for life,” say the lawyers of Agrawal and the other former executives in the 39-year-old lawsuit to which EL PAÍS has had access.
“Under Musk's control, Twitter has become a criminal, scamming employees, landlords, suppliers and others. “Musk doesn't pay his bills, believes the rules don't apply to him, and uses his wealth and power to trample anyone who disagrees with him,” they add.
The lawsuit echoes the description of the takeover made in Musk's biography written by Walter Issacson, in which the early closure of the operation was presented as a masterstroke to avoid paying compensation. “When he was closing the acquisition, Musk told his official biographer, Walter Isaacson, that he would ‘haunt every single one’ of Twitter executives and directors ‘until the day they die.’ ™. These statements were not the mere rantings of a self-centered billionaire surrounded by people unwilling to face the legal consequences of their own decisions. Musk bragged to Isaacson specifically about how he planned to defraud Twitter executives of their severance pay to save $200 million.
They point out that “if anyone around Musk had been willing to tell him the truth, they would have learned that his plan (to bring forward the closure of the operation and fire them as appropriate dismissal before they resigned due to a change in control) to deny to the plaintiffs their contractual indemnities was a futile effort that would not stand up to legal scrutiny.â€
They explain that the “cause†for proper dismissal in compensation plans is limited to very limited circumstances, such as being convicted of a serious crime or committing gross negligence or willful misconduct. But they do not serve as justified cause “business decisions approved by the board that Musk does not like” from the time before he owned the company.
In early December, Also in December, a San Francisco judge rejected X's request to dismiss a lawsuit by employees who claimed they had been denied 2022 bonuses, even though they had been promised that they would be paid 50% of the planned amounts.
Bad legal fronts
The judicial fronts are multiplying for Elon Musk after the setback he suffered when a judge annulled a record remuneration of up to 56,000 million dollars that the executive had been assigned to Tesla through the board. Now, the lawyers who managed to annul that package have asked the judge to grant them company shares worth $5.6 billion in legal fees, 10% of the amount of the lawsuit. If approved, it would be the largest compensation of this type. Lawyers in cases arising from the Enron bankruptcy collected a record $688 million in legal fees in 2008. Lawyers say the sum is justified because they would not have been paid if they had lost and the benefit to Tesla of the cancellation of the remuneration package “has been massive.”
For his part, Musk filed a lawsuit last week against OpenAI, the company responsible for ChatGPT, its CEO, Sam Altman, and other senior officials of the organization, such as Greg Brockman (president of OpenAI), for having abandoned the mission. original goal of the company he co-founded: to contribute to the development of artificial intelligence (AI) in a selfless, non-profit manner, for the benefit of humanity.
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