Three Twitter executives got Halloween tricks a little early this year. After billionaire Elon Musk took over Twitter Thursday, a day before the October 28 deadline, he ousted three top executives, former CEO Parag Agrawal, CFO Ned Segal and Chief Legal Officer Vijaya Gadde. According to CNN, Musk will have to pay the former Twitter execs approximately $187 million. Musk must honor a golden parachute that was part of the merger agreement approved by Twitter shareholders. The executives will receive a year’s worth of pay – Agrawal will get $1 million, and Segal and Gadde will each get $600,000, along with a year of health insurance valued at about $73,000.
In addition, the ousted execs will be paid for their shares of Twitter stock:
- Agrawal had 155,000 shares and will get $8.4 million.
- Segal had 406,000 shares and will get $22 million.
- Gadde had the most shares at 642,000. She will receive $34.8 million, reports CNN.
Agrawal, Segal and Gadde will be paid an accelerated vesting schedule for their stock which will make up the largest portion of their payouts. Agrawal will get $56.4 million in vesting that had not yet been earned, Segal will get $43.8 million, and Gadde will get $19.4 million.
The New York Times reports that Musk plans to make significant staff cuts prior to Tuesday, November 1 when employees would have gotten stock grants as part of their compensation package. Musk may be able to avoid those payments if the layoffs occur prior to Tuesday. Though it has not been confirmed by Musk or Twitter, as many as 50% of Twitter staff could be laid off.
According to The Times, Musk – who calls himself Chief Twit on his Twitter profile – arrived at Twitter’s San Francisco headquarters on Wednesday and began employee meetings which resulted in the firing of top executives. On Thursday, he tweeted that the bird had been freed.
Meanwhile, as late as last night, Musk tweeted a fake post and something he feels was hidden from him.
In an October 28 tweet, Musk said that no content moderation changes have yet been made. In fact, he is forming a content moderation council to determine the company’s content moderation policies.
In July, Twitter provided their financial results for the second quarter of 2022, and Musk has his work cut out for him. While usage was up (237.8 million daily active users) 16.6% year-over-year, total revenue of $1.18 billion represented a 1% decrease. Advertising revenue made up a large portion of that at $1.08 billion, a 2% increase year-over-year.
More concerning is the drop in subscription and other revenue which was only $101 million, a 27% decrease year-over-year. Before leaving the company, co-founder Jack Dorsey said he wanted the company to be less reliant on advertising revenue. Among the revenue streams was subscriptions, starting with Twitter Blue, Twitter’s first subscription product.
Meanwhile, costs and expenses were $1.52 billion, exceeding total revenue. Of that total, $33 million in the second quarter was related to the pending acquisition of Twitter. Severance-related costs were about $19 million during the second quarter. At least for the second quarter, Musk has a lot of ground to make up. That’s likely the reason for the huge staff cuts, plus he wants to hire staff that he believes will be loyal to him and not to his predecessors.
This situation seems to get weirder by the hour. It is clear that Musk is in control now, but there is a lot still unknown about what was happening at Twitter behind the scenes and about what Musk’s true plans for the social media platform are. Though they avoided a Twitter vs. Musk trial, we would not be surprised to see this acquisition go into litigation. Stay tuned for the next installment.