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Former Twitter chiefs launch $128m lawsuit against Elon Musk

Elon Musk bought Twitter for $44bn in October 2022
Elon Musk bought Twitter for $44bn in October 2022 - Jonathan Ernst/Reuters

A group of former Twitter executives have launched a legal battle against Elon Musk over claims they are owed $128m (£100m) in severance pay.

Those suing the Tesla billionaire, who bought Twitter for $44bn in October 2022 before renaming it X, include ex-chief executive Parag Agrawal and former finance boss Ned Segal.

Court filings in California reveal that the group, which also consists of Twitter’s former legal head Vijaya Gadde and ex-general counsel Sean Edgett, have accused Mr Musk of purposefully withholding pay.

The executives, who led Twitter during Mr Musk’s high-profile and drawn-out takeover, were subsequently fired for allegations of gross negligence and willful misconduct - claims that the four deny.

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Tensions first arose between the executives and Mr Musk during the protracted acquisition process, as they sued the entrepreneur in 2022 after he attempted to withdraw from the deal. 

This coincided with Mr Musk repeatedly claiming in the run-up to the takeover that the social media platform was poorly run.

On one occasion, he posted a “poop” emoji in response to Mr Agrawal’s attempts to explain how Twitter was dealing with spam accounts.

Prior to being sacked in October 2022, the four former executives were in line for payouts of around $90m, with Mr Agrawal set for a $38.7m reward.

These were largely from shares owed under various bonus schemes, although they were able to be overlooked after Mr Musk sacked the four executives, as first reported by The Wall Street Journal.

Lawyers acting on behalf of the group said: “This is the Mr Musk playbook: to keep the money he owes other people, and force them to sue him. Even in defeat, Musk can impose delay, hassle and expense on others less able to afford it.”

In a 38-page submission, they alleged: “Under Mr Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others. Mr Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him.”

The group previously sued Twitter for $1.1m in legal expenses incurred in relation to their work for the company. A judge ruled in their favour last October.

Since the takeover, the social media platform has been embroiled in controversy, with advertisers fleeing amid concern over online safety and controversial views expressed by Mr Musk.

In November, advertisers such as Apple, Disney and IBM suspended business with Twitter after Mr Musk was accused of supporting an anti-Semitic conspiracy theory.

Mr Musk conceded that a post on social media, which was accused of being anti-Semitic, was the “worst and dumbest I’ve ever done”.

X is also understood to have lost swathes of advertising revenue since Mr Musk took over.

This has led to him accusing advertisers of trying to “blackmail” him, telling those who have joined a boycott to “go f--- yourself”.

Meanwhile, millions of users in the UK have stopped visiting the social network since the acquisition.

It emerged late last year that X had lost almost 3m UK visitors to its website following the takeover, according to figures from regulator Ofcom

Separate data from Ipsos iris shows Twitter has been declining in popularity among British users in recent years, with its reach falling from 61pc of adults in 2021 to 50pc last year.

Mr Musk has also sparked criticism after inviting banned figures back to the platform, including Donald Trump, Tommy Robinson and Katie Hopkins.

Last month, Twitter was accused by campaigners of potentially violating US terrorist sanctions by allowing groups such as Hezbollah to purchase verification “check marks”.

The Tech Transparency Project, a group that monitors big tech companies, said it had identified 28 accounts that were associated with terrorist or sanctioned groups that had the verification mark.

They include Hassan Nasrallah, the leader of Hezbollah, although Twitter removed verification from all of the accounts shortly after the report was published,

X, formerly known as Twitter, was contacted for comment.