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Elon Musk agreed to settle with four former Twitter executives, including the social media platform’s ex-leader, who had sued the billionaire for more than $128mn in severance pay after he fired them following the company’s 2022 acquisition.
Musk and X have reached an undisclosed settlement with former chief executive Parag Agrawal, former chief legal officer Vijaya Gadde, former general counsel Sean Edgett and former chief financial officer Ned Segal, according to an update to the lawsuit filed in federal court in California.
The settlement is dependent on “certain conditions” being met “in the near term”, the court filings said, which did not provide further details.
The former Twitter executives were dismissed “for cause” immediately after Musk completed his $44bn acquisition of the platform he has since renamed X, which automatically voided large severance payouts — nearly $60mn in Agrawal’s case.
Musk has faced costly legal and regulatory challenges in the wake of the takeover and his subsequent aggressive cost-cutting efforts at X, which included firing thousands of staff and refusing to pay many of Twitter’s vendors, landlords and partners. The billionaire’s artificial intelligence group xAI bought X in March.
X agreed in August to settle a separate class-action lawsuit from former Twitter employees for allegedly failing to pay out $500mn in severance packages during mass lay-offs. Terms of that settlement have not been disclosed.
Separately, the US Securities and Exchange Commission is suing Musk for allegedly breaching securities law by failing to make timely disclosures on his purchases of Twitter shares in 2022, which they argue helped him achieve a discount of at least $150mn on his additional stock acquisitions.
During the Twitter takeover, Musk publicly lambasted Twitter’s senior executives for how they ran the platform and their decision to sue him to close the deal when he attempted to back out of the takeover.
In the executives’ severance lawsuit, which was filed in 2024, Agrawal and the other former leaders alleged Musk had “manufactured” the terminations to “deprive plaintiffs of their severance benefits”, accusing them of gross negligence and wilful misconduct “without citing a single fact in support of this claim”.
The lawsuit cites an excerpt from Musk’s biography by Walter Isaacson, in which the author claims the billionaire rushed to close the deal earlier than planned so that he could fire the executives “for cause” before they would have time for their stock options to vest, or resign themselves.
“There’s a 200-million [dollar] differential in the cookie jar between closing tonight and doing it tomorrow morning,” Musk allegedly told Isaacson.
