Elon Musk took over Twitter after months of ‘negotiations’ and immediately fired the three top executives of the company. It’s not that it came as a surprise to anyone, as everybody expected that he will do so. But nobody expected that it will come as early as his first day in office. As a result of Elon Musk’s impulsive reaction, he will now need to pay close to $200 million.
Former CEO Parag Agrawal, former CFO Ned Segal, and former Chief Legal Officer Vijaya Gadde left the company on Thursday. Unofficial sources working at the Twitter headquarters claim that they were on their way out at the same time Elon Musk was entering his office.
Fired Twitter Executives Will Receive $200 million from Elon Musk
All three of the fired Twitter executives were also shareholders in the company. So this $200 million price money that they will receive is not something that was not expected. Most of it comes from their shares in the company. However, they will receive something that is called ‘The Golden Parachute Compensation’ as well.
Parag Agrawal stepped into the position of CEO at Twitter almost a year ago. His short time in the company only enabled him to buy about 155 000 shares worth $8.5 million. Ned Sega, the CFO will get somewhere around $22 million. Vijaya Gadde being the longest in the company will get almost $35 million for her 650 000 shares.
The shareholders in the company pre-approved the ‘Golden Parachute Compensation’ that the former executives will get. The compensation includes a year’s base pay. For Agrawal, his year’s base salary was about $1 million, and for Gadde and Segal $600 000 each. In addition to this, the now jobless executives will get a year of health insurance.
Of course, Elon Musk knew about this even before completing the transaction. It is not like he is unaware that the top three executives will have shares of the company. However, it is unclear if he counted on the additional expenses that he will have. Expenses as severance payments and compensations.
The most beneficial part for the trio is the accelerated vesting of stock they did not qualify for. That will be worth $56 million for Agrawal, $44 million for Segal, and $20 million for Gadde.
According to analysts, Elon Musk has a background wider than personal issues for the letting go of the executives. He apparently fired them for a ‘cause’. He wants to avoid severance pay and unvested stock awards.
The director of research at Equilar Courtney Yu said that the fired Twitter executives “should be getting these severance payments. Unless Elon Musk had cause for termination. A cause in these cases usually is that they broke the law or violated company policy.”
