Elon Musk could avoid giving a payout of up to $90m (£78m) to sacked senior Twitter executives after dismissing them “for cause”, it has been reported.
The new owner of the social media giant sacked four senior executives, including chief executive Parag Agrawal and finance chief Ned Segal, on Thursday, as he moved quickly to assert control over the company following the completion of his $44bn takeover.
Mr Musk, who also ousted Twitter’s head of legal and its general counsel, did so “for cause”, The Information reported, allegedly in an apparent bid to avoid having to pay them multimillion-dollar severance packages.
It’s probably not so much severance packages. Rather, their restricted stock vests if they are fired. And if it’s for cause then the restricted stock doesn’t vest. Bit like their options don’t become exercisable although that’s a rather older for of executive payment.
And if their contracts say this is for so, and there is cause, then why not?
I also have a sneaking feeling – nothing more than an entirely unverifiable turning of the waters – that this was a goodly part of Musk’s dance here. By forcing Twitter’s board to sue him to complete the takeover he’s managed to stop them “negotiating” into having protected positions to smooth the path for the takeover. There aren’t any little extra clauses in the agreement that say “pay all restricted stock, vest all options” precisely because they’ve been chasing him, not he they.
Even if that’s not true it’s something I’d like to be true. Just because it would be very cool negotiating. Outmanouevre, screw, the corporate bureaucrats.