In a development that underscores the lingering fallout from one of the most contentious corporate takeovers in recent history, Elon Musk’s X Corp has agreed to settle a high-stakes lawsuit filed by four former top executives of Twitter. The case, centered on claims of $128 million in withheld severance payments, marks another chapter in the turbulent saga following Musk’s $44 billion acquisition of the social media platform in October 2022. Announced in a San Francisco federal court filing last week, the settlement averts what promised to be a protracted and embarrassing trial for the billionaire entrepreneur, who has faced a barrage of legal challenges since rebranding Twitter as X and slashing its workforce.
The plaintiffs—former Twitter CEO Parag Agrawal, ex-Chief Financial Officer Ned Segal, former Chief Legal Officer Vijaya Gadde, and ousted General Counsel Sean Edgett—had accused Musk of orchestrating their abrupt dismissals as an act of personal vendetta. According to details from the original complaint, filed in early 2024, the executives were terminated mere hours after Musk finalized the deal, just one day shy of vesting $200 million in stock options and severance entitlements. They alleged that Musk, frustrated by their role in enforcing his contractual obligation to complete the purchase after he attempted to back out, fabricated grounds for their firings to deny them benefits promised under long-standing company policies.
This settlement comes on the heels of a similar resolution in August, when X agreed to pay out approximately $500 million to thousands of rank-and-file employees laid off during Musk’s aggressive cost-cutting spree. Together, these payouts represent a significant financial toll on X, a company already grappling with advertiser exodus, regulatory scrutiny, and questions about its long-term viability under Musk’s unpredictable leadership. While the exact terms of the executive settlement remain under wraps—described only as contingent on “certain conditions” being met in the near term—it signals a pragmatic shift for Musk, who has often dismissed such claims as meritless.
To fully appreciate the gravity of this resolution, one must rewind to the chaotic prelude of the Twitter acquisition. In early 2022, Musk, then the world’s richest individual with a penchant for disruptive ventures, began accumulating shares in Twitter, the once-dominant microblogging site founded by Jack Dorsey in 2006. What started as a passive investment quickly escalated into a full-throated bid when Musk publicly criticized the platform’s content moderation policies, free speech protections, and algorithmic biases. By April, he had secured a 9.2% stake, prompting Twitter’s board to adopt a “poison pill” defense to ward off a hostile takeover.
Musk’s initial offer of $54.20 per share—valuing the company at $44 billion—caught Twitter off guard. The board, after weeks of deliberation, accepted the deal, but not without internal discord. Enter Parag Agrawal, a soft-spoken engineer who had risen through the ranks to become CEO in November 2021 following Dorsey’s departure. Agrawal, along with Segal, Gadde, and Edgett, formed the core of Twitter’s C-suite, a team credited with navigating the platform through explosive growth during the pandemic, bolstering user safety features, and fending off misinformation ahead of the 2020 U.S. election.
Yet, as the closing date loomed in October 2022, Musk mounted a dramatic reversal. Citing a whistleblower’s revelations about Twitter’s spam bots and data security lapses, he declared the deal “on hold” and sought to terminate the agreement. Twitter’s leadership, bound by Delaware merger law, sued Musk in the Court of Chancery to compel the sale. The case, presided over by Chancellor Kathaleen McCormick, featured explosive depositions and leaked texts that painted Musk as evasive and duplicitous. Agrawal testified about the personal toll, including death threats from Musk’s online followers, while Gadde—often vilified in conservative circles for her role in suspending Donald Trump’s account after January 6, 2021—defended the company’s moderation decisions as essential to user trust.
With trial set for October, Musk capitulated, wiring the funds and taking control on October 27, 2022. In a move straight out of a corporate thriller, he locked executives out of company systems and summoned them to Twitter’s San Francisco headquarters. There, in a scene recounted in Walter Isaacson’s 2023 biography of Musk, the Tesla CEO reportedly declared, “You’re all fired.” Agrawal was frog-marched out by security, his severance package—estimated at over $50 million including salary, bonuses, and equity—evaporating into thin air. Segal, the finance whiz who had steered Twitter through profitability hurdles, stood to collect around $30 million. Gadde and Edgett, key architects of Twitter’s trust and safety apparatus, were each eyeing $20 million or more. The lawsuit contended that Musk timed the firings “for cause”—citing vague performance issues—to circumvent a severance plan dating back to 2019, which guaranteed one year’s salary plus accelerated stock vesting for top leaders.
The plaintiffs didn’t mince words in their 2024 filing, framing the terminations as “revenge firings.” They pointed to Musk’s own words in Isaacson’s book, where he admitted accelerating the deal closure by a day to create a “$200 million differential in the cookie jar” and vowed to “hunt every single one of” Twitter’s executives “till the day they die.” The complaint painted a picture of a billionaire scorned: Musk, who had lambasted Twitter’s management for inflating user metrics and suppressing conservative voices, saw the executives as symbols of the old guard he needed to eradicate. “This was not a routine change in control,” their lawyers argued. “It was a targeted purge.”
X’s defense, mounted vigorously through 2024, portrayed the executives as incompetent stewards who had driven Twitter to the brink of irrelevance. Musk’s legal team filed motions claiming the severance plan was unenforceable post-acquisition and that the firings stemmed from legitimate concerns over fiduciary breaches during the merger battle. Publicly, Musk amplified the narrative on X itself, tweeting memes mocking Agrawal as a “puppet CEO” and Gadde as the architect of “shadow banning.” These posts, which garnered millions of views, blurred the lines between personal animosity and corporate strategy, fueling accusations that Musk was weaponizing the platform against his critics.
As the case dragged into 2025, discovery unearthed a trove of internal communications. Emails revealed Musk’s team scrambling to justify the firings retroactively, while depositions from X executives exposed inconsistencies in the “cause” allegations. The broader context of Musk’s Twitter overhaul only heightened the stakes. Upon acquisition, he axed 80% of the 7,500-person workforce, including vital engineering and moderation teams, leading to widespread outages, increased hate speech, and a 60% plunge in ad revenue. Major brands like Apple and Disney pulled back, citing concerns over brand safety. The August class-action settlement with laid-off employees—covering 6,000 workers who claimed violations of a 2019 policy entitling them to two months’ pay plus tenure-based bonuses—set a precedent, with X agreeing to $500 million without admitting liability.
Analysts view the executive settlement as a calculated retreat. “Musk thrives on chaos, but endless litigation drains resources X desperately needs for AI integration and user growth,” says one tech commentator. The undisclosed terms likely include a lump-sum payment approaching the full $128 million, possibly with non-disparagement clauses to muzzle future barbs. For the executives, it’s vindication after years in Musk’s crosshairs. Agrawal, now advising startups on ethical AI, has largely stayed silent, focusing on family and philanthropy. Segal has pivoted to venture capital, channeling his finance acumen into climate tech funds. Gadde, a vocal advocate for online safety, consults for nonprofits combating digital harassment. Edgett, ever the behind-the-scenes operator, has joined a boutique law firm specializing in tech mergers.
This episode encapsulates the double-edged sword of Musk’s empire-building. The man who revolutionized electric vehicles with Tesla and space travel with SpaceX has poured his fortune—and fury—into X, envisioning it as an “everything app” rivaling WeChat. Yet, the platform’s valuation has cratered to $19 billion by some estimates, a 57% haircut from the acquisition price. Subscriber numbers hover around 500 million, but engagement lags, plagued by algorithmic tweaks favoring right-wing content and Musk’s own inflammatory posts on topics from immigration to election integrity.
Critics argue the severance saga exposes deeper flaws in Musk’s management style: impulsive decisions, disdain for institutional norms, and a litigious streak that borders on paranoia. Supporters, however, hail him as a disruptor unafraid to torch the old order. “Twitter was bloated and censored; Musk liberated it,” one X power user posted in reaction to the settlement news. The resolution may quiet this particular front, but it won’t end the war. Ongoing probes by the FTC into X’s data practices, EU fines for GDPR violations, and shareholder suits over Tesla’s diverted resources loom large.
For the ousted executives, the payout—whenever finalized—offers closure. They walk away not just with financial recompense but with their reputations intact, having outlasted the man who once vowed eternal pursuit. In the annals of Silicon Valley boardroom battles, this $128 million handshake stands as a reminder: even titans like Musk can’t rewrite contracts or grudges with a tweet. As X pushes forward with Grok AI integrations and premium features, the ghosts of Twitter’s fallen leaders serve as a cautionary echo. In the high-wire world of tech mergers, loyalty is fleeting, but severance clauses endure.
