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Twitter’s top executives could see major pay cut according to deal worked out by Elon Musk: report

April 29, 2022 | | Print Article

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When billionaire investor Elon Musk tweeted roughly two weeks ago about cutting Twitter’s board salary to $0 “if my bid succeeds,” most people shrugged it off as him just talking trash or joking.

Recall that he posted the tweet right after Twitter’s board adopted a “poison pill.”

But according to newly uncovered information, it appears he’d been dead serious.

“Elon Musk told banks that agreed to help fund his $44 billion acquisition of Twitter Inc (TWTR.N) that he could crack down on executive and board pay at the social media company in a push to slash costs, and would develop new ways to monetize tweets, three people familiar with the matter said,” Reuters reported Friday.

“Musk made the pitch to the lenders as he tried to secure debt for the buyout days after submitting his offer to Twitter on April 14, the sources said. His submission of bank commitments on April 21 were key to Twitter’s board accepting his ‘best and final’ offer,'” the outlet added.

This could potentially mean an epic drop in pay for Twitter’s top executives, if not outright termination. And indeed, Reuters reported that Musk already has a replacement lined up for some top executives.

However, there’s a catch. The Hollywood Reporter notes that CEO Parag Agrawal and CFO Ned Segal “have so-called ‘Change in Control’ clauses in their contracts, according to Twitter’s latest proxy filing.”

According to Practical Law, a “change in control” clause is a “provision in an agreement giving a party certain rights (such as consent, payment or termination) in connection with a change in ownership or management of the other party to the agreement.”

In Agrawal and Segal’s case, this means they’d receive a pay package worth $38.7 million and $25.5 million, respectively, if they were fired by Musk.

It’s not clear whether Twitter’s chief legal officer, Vijaya Gadde, a controversial figure known for orchestrating the social media network’s censorship campaigns, also benefits from a “Change in Control” clause. All that’s known is that she reportedly earned $17 million total in salary and stock options last year.

Many members of the public are craving her termination, as they believe her to be personally responsible for the censorship of the Hunter Biden story and the permanent banning of former President Donald Trump:

What also remains unknown is when exactly the Twitter deal will be finalized. Although Twitter’s board formally accepted Musk’s offer on Monday, the deal has yet to be finalized on paper and could still go awry if, for instance, Twitter shareholders or government regulators vote against it, as their approval is required.

“There are two main regulatory approvals here. First the Securities and Exchange Commission – which is akin to a financial watchdog – must approve the takeover. Then the Federal Trade Commission and Department of Justice will consider if the takeover may reduce competition,” The Conversation notes.

The FTC and DOJ (in addition to the Federal Communications Commission) are already facing pressure from left-wing activists demanding that they block the deal.

The bad news for Musk — and those rooting for him — is that he’s already “had negative interactions with the SEC in the past.”

“In 2018 it charged him with fraud over him tweeting he had funding to take his electric vehicle company Tesla private. Musk ultimately settled, paying a US$20 million fine and stepping down as chair of the Tesla board. Some shareholders are suing him for losses suffered as a result of his tweet,” according to The Conversation.

According to The Washington Post, the deal could also go awry if Musk backs out because of Twitter’s declining stock price or if he posts something to Twitter that voids the deal. The terms of the deal prohibit him from posting tweets that “disparage the Company or any of its Representatives.”

Vivek Saxena
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