Elon Musk Calls It Quits! Settles $128 Million Severance Dispute with Former Twitter Executives — Update
Elon Musk’s recent moves to mend fences with Donald Trump might be catching headlines, but there’s another reconciliation happening quietly behind the scenes. The former leader of Dogecoin is now making peace with some of Twitter’s (now X’s) ex-top executives after a heated legal battle.
On September 30, a federal court filing in San Francisco revealed that the parties involved had reached a settlement that hinges on meeting specific conditions soon. This development likely signals the conclusion of the $128 million lawsuit filed back in March 2024 by former CEO Parag Agrawal, ex-CFO Ned Segal, former Chief Legal Officer Vijaya Gadde, and ex-General Counsel Sean Edgett over unpaid severance and benefits. The filing emphasized that postponing previously established case deadlines would allow both sides to finalize the settlement terms while saving time and resources for the court and themselves.
As is typical with such settlement agreements, the exact details remain confidential, but it’s reasonable to infer that Musk, known for his litigious nature, had to open his wallet to some extent.
Preparations continue with a settlement conference scheduled for November 6 before Magistrate Judge Nathanael M. Cousins. While Musk is unlikely to attend in person, it’s safe to say his financial influence and presence will be strongly felt in the courtroom.
Flashback: March 4, 2024
This case was anything but a quick tweet. The lawsuit filed by the four Twitter veterans sent a crystal-clear demand: "Pay what you owe us!" The claim totaled $128 million, encompassing severance packages and other benefits. The complaint alleged that Musk abruptly terminated the plaintiffs without cause after deciding not to honor their severance agreements. It further accused him of fabricating reasons to justify their dismissal, delegating company loyalists to back his decisions.
The complaint (which is publicly accessible) paints a picture of Musk confronting what appears to be a widespread pattern: numerous lawsuits from service providers, vendors, and thousands of former employees piling up since Musk’s $44 billion pressured acquisition of Twitter in 2022.
The lawsuit characterizes this as the “Musk playbook” — a strategic move to withhold payments and compel rightful claimants into expensive and time-consuming legal struggles. The plaintiffs criticize Musk for dragging out disputes to wear down his opponents, especially targeting those less equipped to fight back.
The former executives, represented by the powerful law firm Sidley Austin from San Francisco and Chicago, wield Musk’s own words against him. The 38-page filing quotes Musk telling his biographer Walter Isaacson that he would "hunt every single one" of Twitter's executives and directors relentlessly. The suit claims these weren’t empty threats but part of a deliberate plan to cheat executives out of their legally guaranteed benefits, potentially saving Musk $200 million.
A crucial detail in the dispute lies in the "good reason" clauses embedded in the contracts of Agrawal, Segal, Gadde, and Edgett. These clauses guaranteed full severance payouts if Twitter ceased to be publicly traded — precisely what happened in October 2022. Yet, these conditions were apparently ignored when Musk's team terminated the executives, leaving them without their entitled compensation.
While Musk spent part of the day sharing his thoughts on immigration and celebrating a successful SpaceX launch, he offered no comment on the lawsuit filed by his former top executives. X representatives also remained silent when Deadline reached out for a response regarding the claims.
Should Musk or X decide to address this lawsuit publicly in the future, updates will follow here.
But here’s where it gets controversial: Is Musk’s handling of Twitter’s former leadership a typical tough business maneuver, or does it cross the line into unethical treatment of loyal executives? What do you think? Share your thoughts below — is this the ‘Musk playbook’ working as intended, or is something more troubling at play?
