Elon Musk denies report of terminating Twitter staff to avoid payouts

Elon Musk denies report of terminating Twitter staff to avoid payouts

Twitter Inc.s new owner Elon Musk has reportedly denied striking off Twitter staff before 1st November 2022, in order to dodge stock grants that were due on that day. Additionally, when a Twitter user asked about the layoffs, Tesla's CEO claimed the speculations to be untrue.

Sources stated that Musk has ordered job cuts across the organization, with certain teams to be reduced more severely than others. Notably, layoffs would occur before Nov. 1, when workers were supposed to start receiving stock awards as part of their remuneration.

Sources further cited that Musk sacked Twitter CEO Parag Agrawal, CFO Ned Segal, and legal affairs & policy chief Vijaya Gadde following the conclusion of a high-profile USD 44 billion takeover of the social media company as well as in an effort to dodge severance compensation and unvested stock awards.

According to research analysts, the owner of Tesla had said that Twitter and its investors had been deceived about the number of bogus accounts on the service. Besides, the executives stood to receive parting compensation totaling almost USD 122 million.

The research firm further affirmed that the so-called "golden parachute" of Agrawal was valued at USD 57.4 million, Segal's at USD 44.5 million, and Gadde's at USD 20 million. In addition to those payments, Musk will also provide the three executives USD 65 million in exchange for the shares they previously owned in the business that he is now taking private.

This is why there have been speculations of Musk terminating the executives to avoid paying for unvested stocks.

According to other sources, the ousted executives are entitled to collect these (severance) payouts unless Elon Musk had definitive cause for their terminations. Interestingly, the main cause in these circumstances typically is that the employees have broken the law or violated company policies.

Source Credit:

https://www.channelnewsasia.com/business/musk-denies-reports-he-firing-twitter-employees-attempt-avoid-payouts-3033096