Elon Musk and X Settle $128 Million Severance Lawsuit with Former Twitter Executives

Elon Musk and X (formerly Twitter) have finally settled with a group of former top executives over $128 million in unpaid severance.

The dispute began after Musk bought Twitter in 2022. The executives claimed he refused to pay what they were owed after being fired right after the takeover.

Who Was Involved in the Case

The lawsuit was filed by several high-ranking Twitter leaders, including

• Parag Agrawal, former CEO

• Ned Segal, former CFO

• Vijaya Gadde, former Chief Legal Officer

• Sean Edgett, former General Counsel

These executives said Musk acted out of “revenge” after being forced to complete the $44 billion Twitter acquisition deal he once tried to cancel.

According to the lawsuit, Musk fired them within hours of taking over Twitter in October 2022. The timing was critical—it happened just one day before they would have received around $200 million in severance and vested stock options.

Read More: X Introduces ‘Premium Business’ and ‘Premium Organizations’ Tiers for Verified Accounts

Details of the Settlement

A court order signed on October 1, 2025, in the U.S. Northern District Court of California confirmed that Musk and the executives have reached a settlement agreement.

The order didn’t include the terms or amount of the settlement. However, it postponed scheduled depositions, including Musk’s, to give both sides time to complete settlement conditions.

What the Lawsuit Claimed

The former executives argued that Musk deliberately avoided paying them their contractually guaranteed severance.

Their lawsuit cited parts of Walter Isaacson’s 2023 biography of Elon Musk, which suggested Musk didn’t want to pay the executives because he believed they had misled him during the Twitter deal.

The book claimed Musk rushed to close the sale early, allowing him to fire the executives “for cause”—a legal term meaning the dismissals were due to misconduct or wrongdoing.

But the lawsuit said those “for cause” reasons listed in their termination letters were unproven and unfounded.

Musk’s Legal Troubles Over Severance

This isn’t the first time Musk and X have faced complaints over unpaid severance.

In August 2025, Musk’s company also reached a separate settlement with a group of former Twitter employees, who claimed they were collectively owed hundreds of millions in severance.

In that case, the executives’ lawsuit accused Musk of violating employment contracts and ignoring severance agreements made before his takeover.

The Bigger Picture

When Musk took over Twitter in late 2022, he promised significant changes to the company’s operations. He quickly laid off thousands of employees, cut costs, and rebranded Twitter into X in 2023 as part of his plan to build an “everything app.”

However, the transition has been rocky. Many ex-employees have accused X of withholding pay, severance, or bonuses. Multiple lawsuits remain ongoing in U.S. courts.

Despite these controversies, Musk has continued to focus on turning X into a profitable, AI-driven social platform that combines payments, video, and chat.

What Happens Next

The latest settlement closes one of Musk’s biggest disputes with the former Twitter leadership team.

While the exact settlement amount wasn’t disclosed, resolving this case could help Musk avoid further public courtroom battles and legal distractions as he continues to reshape X.

Still, legal experts note that Musk’s employment practices and handling of contracts will likely remain under scrutiny for some time.

Read More: Elon Musk Warns of Legal Action Against Apple Over AI App Rankings

FAQs

1. Who were the former Twitter executives involved in the lawsuit?

The group included Parag Agrawal (CEO), Ned Segal (CFO), Vijaya Gadde (Chief Legal Officer), and Sean Edgett (General Counsel).

2. How much was the severance dispute worth?

The lawsuit was over $128 million in unpaid severance, plus stock options worth nearly $200 million that were withheld.

3. Why did Elon Musk fire the executives?

According to reports, Musk fired them within hours of taking control to prevent them from receiving severance and vested stock. He claimed it was “for cause,” but the executives disputed that.

4. Was this Musk’s only severance lawsuit?

No. In August 2025, Musk also settled another case with former Twitter employees who said they were owed hundreds of millions in severance pay.

5. Are the terms of the settlement public?

No. The court documents confirm a settlement was reached, but the exact details and amount have not been made public.