Elon Musk settles $128 million severance lawsuit with former Twitter executives including ex-CEO Parag Agrawal

Elon Musk and his company X Corp have reached a settlement with four former top Twitter executives, including ex-CEO Parag Agrawal, who alleged they were denied $128 million in severance pay after Musk’s 2022 takeover of the social media platform.

The settlement, confirmed in a San Francisco federal court filing last week, brings an end to one of the most closely watched disputes to emerge following Musk’s $44 billion acquisition of Twitter. The exact terms of the agreement have not been disclosed. A federal judge postponed filing deadlines and a scheduled hearing on October 1 to allow the settlement to be finalised.

The plaintiffs in the case include Agrawal, Ned Segal (former Chief Financial Officer), Vijaya Gadde (former Chief Legal Officer), and Sean Edgett (former General Counsel). The group claimed Musk unfairly terminated them without paying out their contractual severance and stock options.

The executives argued that Musk falsely accused them of misconduct after they sued him in 2022 for attempting to back out of his purchase of Twitter. Their lawsuit stated that each was entitled to one year’s salary along with hundreds of thousands of dollars in stock options, which were denied after Musk took control.

X Corp and Musk denied any wrongdoing, maintaining that the executives were dismissed due to poor performance.

This settlement follows another case in August, when X agreed to resolve a separate lawsuit brought by former Twitter employees who were laid off during Musk’s mass workforce reduction and claimed they were owed $500 million in unpaid severance.

Since acquiring Twitter, Musk has faced multiple legal and financial challenges while reshaping the company into X, cutting over half of its staff, and pursuing an aggressive rebranding strategy aimed at transforming the platform into an “everything app.”