Why Musk's Ousted Twitter Executives Could Have Taken Hundreds of Billions of Won?

Musk Embraces Twitter, Fires Three Existing Executives in First Move
‘Golden Parachute’ Clause Applied for Compensation in Hostile Takeover... 173.9 Billion Won Windfall

Elon Musk, CEO of Tesla. Photo by Yonhap News

[Asia Economy Reporter Kim Sung-wook] Elon Musk, CEO of Tesla, has completed the acquisition of the social networking service (SNS) Twitter for $44 billion (approximately 62.35 trillion KRW). Musk's first move on the 27th (local time) was to dismiss Twitter's existing management team, but thanks to this, they will be able to receive hundreds of millions of won each.

According to Reuters on the 28th, the former Twitter executives can receive previous stock bonuses worth $122 million (approximately 173.9 billion KRW), one year's salary, and some insurance payments. Former CEO Parag Agrawal is expected to receive up to $57.4 million (approximately 81.8 billion KRW). Additionally, former CFO Ned Segal and Chief Legal Officer (CLO) Vijaya Gadde are entitled to receive $44.5 million (approximately 63.4 billion KRW) and $20 million (approximately 28.5 billion KRW), respectively.

Former CEO Agrawal joined Twitter in 2011 and succeeded founder Jack Dorsey as CEO in November last year. Former CFO Segal, a financial expert from Goldman Sachs, was recruited by Twitter in 2017. Gadde, who caused controversy over 'contract breach' during Musk's initial Twitter merger process, has worked at Twitter since 2011. All these executives are relatively young, in their 30s to 40s.

The reason they can receive large sums after being ousted from Twitter is due to provisions prepared for hostile mergers and acquisitions (M&A). Twitter has so-called "golden parachute provisions." These stipulate that if directors of the target company leave before their term ends, they are guaranteed their status by receiving large special severance pay, bonuses, stock options, or other benefits in addition to regular severance pay.

Reuters also explained that these three hold a combined total of 1.2 million Twitter shares, which Musk may buy at the standard price. The stock values of Agrawal, Segal, and Gadde amount to $8.4 million (approximately 1.19 billion KRW), $22 million (approximately 3.13 billion KRW), and $34.8 million (approximately 4.96 billion KRW), respectively.

Former CFO Segal stated on his Twitter, "All the muscles I've trained for 48 years were tightly tense during the past six months (acquisition period)." He added, "When everything is challenging and unpredictable, when we are tired or our integrity is questioned, we can learn a lot."

He also reflected, "I am grateful for the opportunity to work with great people," and "The past five years at Twitter have been the most fulfilling period of my career."

This content was produced with the assistance of AI translation services.