4 ms·

Twitter execs fired by Musk may not get their “golden parachutes”

35 points by enraged_camel 4y ago

johng 4y ago
Doesn't lying to the board, the SEC and the shareholders count as misconduct? If half of what the whistleblower said was true, how is Parag not under criminal charges at this point? Edit: s/try/true
- dontbenebby 4y ago
  [flagged]
  - temp_praneshp 4y ago
    By the time I finished reading this, I had forgotten what you were replying to. Well done!
dagmx 4y ago
This is almost certainly going to be a lawsuit, one that I suspect he’ll lose because it’s unlikely he would have had justifiable cause within the first few days as owner. This is all because he knows he overpaid and is trying to reduce the insane amount of debt the company has now taken on as part of the sale. This coincides cleanly with him trying to fire most employees before their stock (now cash?) packages vest. Which I suspect will also end up in a class action lawsuit unless there was some arbitrage agreement. He needs to reduce his self inflicted bleeding immediately to have any hope of it not being a weight around his legs.
- minimaxir 4y ago
  > This is all because he knows he overpaid and is trying to reduce the insane amount of debt the company has now taken on as part of the sale. Paying expensive lawyers for a lawsuit that's guaranteed to fail doesn't strike me as reducing costs.
  - dagmx 4y ago
    He has a large ego. Look at his whole debacle with the Twitter purchase itself. He tried to pull out when he realized he was overpaying, then eventually folded as the lawsuit came up. He also has enough money that the cost of legal fees versus the chance of lowered payments is worth the risk. If he succeeds , any legal costs incurred are a win. If he loses, he’ll brush it under the rug like his other losses (definitely with some memes) and act like he’s the winner. This has been his pattern across all previous litigations as well.
    - nikau 4y ago
      donald trump for nerds.
- Arnt 4y ago
  Their contract is with Twitter, a years-old company, so that new owner can name an old reason and say that's justifiable. Management hasn't done well in the past years, so such an argument sounds feasible, even if I don't know what their contract calls justifiable.
  - microtherion 4y ago
    Except that, ironically, management has done brilliantly in finding a sucker to sell the company to at an inflated valuation, so shareholders did quite well.
  - dagmx 4y ago
    That’s not how contracts work, especially for parachutes where you’ll have very strict rules for what allows avoiding payment. Even for regular employees, dismissal en masse will have labour boards rightfully looking deep into this. Simply becoming owner doesn’t give Elon the carte blanche ability to do whatever he wants.
    - Arnt 4y ago
      No, it doesn't do that. But neither does it affect existing contracts — as I said. If Elon can find an old excuse that suits the contract's language, he can use it. The lawyers are sure to fight over it when a payment of >10m is in question, but Elon isn't barred from using arguments that related to before his takeover — despite what GP said.
esoterica 4y ago
IANAL but I was under the impression that you needed some kind of substantial misconduct to have taken place to fire someone for cause. "I think your performance was bad" or "I disagree with your executive decisions" does not count as cause. Unless Parag was embezzling or sexually harassing subordinates I don't see how cause exists here. Clearly Musk is just being spiteful here. The twitter executives forced him to overpay for Twitter by billions of dollars after he got cold feet and now he's taking revenge by waging a war of legal attrition to force them to waste millions of dollars on legal fees fighting one frivolous lawsuit after another. Can't wait for all the Musk fans to come swarming into this thread to reflexively defend everything he does, no matter how objectively horrible.
- metadat 4y ago
  California is an At Will employment state. Employers can fire employees for any non-discriminatory reason.
  - minimaxir 4y ago
    They can be fired sure, but golden parachute clauses are different, and are very specific in conditions when they cannot be paid out.
  - dagmx 4y ago
    This doesn’t supersede any contractual obligations above that law. So yes you can be fired at will. If your contract has other terms like severance packages, those aren’t automatically nullified
Fordec 4y ago
Stepping back from whether this ends in a lawsuit etc. But why would smart people looking to earn a living work for Musk after this? He'll fire you for cause just because he doesn't like you or didn't let him win. That's not the foundation of a stable career. Because this had nothing to do with whether they did a good job, because they clearly did their fiduciary duty to their shareholders and are clearly great at what they do due to what they have achieved. If you work for Tesla, SpaceX and not definitely Twitter, why are your comp packages trusted to be worth anything until they are cashed?
microtherion 4y ago
So he's trying to weasel out of a contract with (essentially) some of the same people who just thoroughly owned him for trying to weasel out of a contract with the company they ran. This is bound to end well for him.

35 points by enraged_camel 4y ago

Doesn't lying to the board, the SEC and the shareholders count as misconduct? If half of what the whistleblower said was true, how is Parag not under criminal charges at this point? Edit: s/try/true

dontbenebby 4y ago
[flagged]
- temp_praneshp 4y ago
  By the time I finished reading this, I had forgotten what you were replying to. Well done!

dagmx 4y ago

This is almost certainly going to be a lawsuit, one that I suspect he’ll lose because it’s unlikely he would have had justifiable cause within the first few days as owner. This is all because he knows he overpaid and is trying to reduce the insane amount of debt the company has now taken on as part of the sale. This coincides cleanly with him trying to fire most employees before their stock (now cash?) packages vest. Which I suspect will also end up in a class action lawsuit unless there was some arbitrage agreement. He needs to reduce his self inflicted bleeding immediately to have any hope of it not being a weight around his legs.

minimaxir 4y ago
> This is all because he knows he overpaid and is trying to reduce the insane amount of debt the company has now taken on as part of the sale. Paying expensive lawyers for a lawsuit that's guaranteed to fail doesn't strike me as reducing costs.
- dagmx 4y ago
  He has a large ego. Look at his whole debacle with the Twitter purchase itself. He tried to pull out when he realized he was overpaying, then eventually folded as the lawsuit came up. He also has enough money that the cost of legal fees versus the chance of lowered payments is worth the risk. If he succeeds , any legal costs incurred are a win. If he loses, he’ll brush it under the rug like his other losses (definitely with some memes) and act like he’s the winner. This has been his pattern across all previous litigations as well.
  - nikau 4y ago
    donald trump for nerds.
Arnt 4y ago
Their contract is with Twitter, a years-old company, so that new owner can name an old reason and say that's justifiable. Management hasn't done well in the past years, so such an argument sounds feasible, even if I don't know what their contract calls justifiable.
- microtherion 4y ago
  Except that, ironically, management has done brilliantly in finding a sucker to sell the company to at an inflated valuation, so shareholders did quite well.
- dagmx 4y ago
  That’s not how contracts work, especially for parachutes where you’ll have very strict rules for what allows avoiding payment. Even for regular employees, dismissal en masse will have labour boards rightfully looking deep into this. Simply becoming owner doesn’t give Elon the carte blanche ability to do whatever he wants.
  - Arnt 4y ago
    No, it doesn't do that. But neither does it affect existing contracts — as I said. If Elon can find an old excuse that suits the contract's language, he can use it. The lawyers are sure to fight over it when a payment of >10m is in question, but Elon isn't barred from using arguments that related to before his takeover — despite what GP said.

esoterica 4y ago

IANAL but I was under the impression that you needed some kind of substantial misconduct to have taken place to fire someone for cause. "I think your performance was bad" or "I disagree with your executive decisions" does not count as cause. Unless Parag was embezzling or sexually harassing subordinates I don't see how cause exists here. Clearly Musk is just being spiteful here. The twitter executives forced him to overpay for Twitter by billions of dollars after he got cold feet and now he's taking revenge by waging a war of legal attrition to force them to waste millions of dollars on legal fees fighting one frivolous lawsuit after another. Can't wait for all the Musk fans to come swarming into this thread to reflexively defend everything he does, no matter how objectively horrible.

metadat 4y ago
California is an At Will employment state. Employers can fire employees for any non-discriminatory reason.
- minimaxir 4y ago
  They can be fired sure, but golden parachute clauses are different, and are very specific in conditions when they cannot be paid out.
- dagmx 4y ago
  This doesn’t supersede any contractual obligations above that law. So yes you can be fired at will. If your contract has other terms like severance packages, those aren’t automatically nullified

Fordec 4y ago

Stepping back from whether this ends in a lawsuit etc. But why would smart people looking to earn a living work for Musk after this? He'll fire you for cause just because he doesn't like you or didn't let him win. That's not the foundation of a stable career. Because this had nothing to do with whether they did a good job, because they clearly did their fiduciary duty to their shareholders and are clearly great at what they do due to what they have achieved. If you work for Tesla, SpaceX and not definitely Twitter, why are your comp packages trusted to be worth anything until they are cashed?

microtherion 4y ago

So he's trying to weasel out of a contract with (essentially) some of the same people who just thoroughly owned him for trying to weasel out of a contract with the company they ran. This is bound to end well for him.