Musk and X Corp Settle Two Severance Pay Lawsuits

The four top brass comprise the former CEO Parag Agrawal, Twitter’s former chief financial officer Ned Segal, former chief legal officer Vijaya Gadde, and former general counsel Sean Edgett. The former execs said that Musk falsely accused them of misconduct and forced them out of Twitter after they sued him for trying to renege on his offer to purchase the company, according to Reuters.

According to the 38-page complaint filed in the US District Court for the Northern District of California, Agrawal’s lawyers said that, “Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others. 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.” Further, as reported by CNN, “He [Musk] claimed in his termination letters that each Plaintiff committed ‘gross negligence’ and ‘willful misconduct’ without citing a single fact in support of this claim.” 

And in citing Twitter’s securities filing, The New York Times reported Agarwal was entitled to an annual salary of $1 million and the top executive was also awarded $12.5 million in company stock in his offer letter. The former Twitter CEO was also entitled to a $60 million “golden parachute” payment in the event of an involuntary termination. Segal was entitled to $46 million and Gadde was entitled to $21 million under the same circumstances.

The settlement was disclosed in a court filing in San Francisco early October 2025 but did not reveal its terms.

In another lawsuit, three former Twitter executives, Sarah Personette, Dalana Brand and James Sullivan, also settled with Musk ahead of a scheduled hearing on the defendants’ motion to compel arbitration. They claimed that Musk owed them $53.4 million in severance benefits following the billionaire’s takeover of the social media company, according to Law360. Sarah Personette, Dalana Brand and James Sullivan asked the California federal court to dismiss their Employee Retirement Income Security Act (ERISA) lawsuit against Musk and X Corp.

After Musk’s takeover of Twitter, the executives resigned because the company was no longer publicly traded, a materially adverse change to their employment that could trigger severance payouts under the company’s ERISA-controlled plan, reported Law360. However, they offered to stay during the social media company’s transition to ensure the acquisition went smoothly. ˚ Instead of responding to their resignation notices, Musk terminated them and denied severance pay.

The case is Personette et al. v. Musk et al., case number 3:24-cv-06266, in the U.S. District Court for the Northern District of California.