Elon Musk’s Twitter profile is seen on an Apple iPhone mobile phone.
Nurphoto | Nurphoto | beautiful pictures
After Elon Musk completed his $44 billion purchase Twitter Last week, the company’s employees were preparing for job cuts. Several people told CNBC they were worried about losing their equity compensation if Musk sent them the package before their shares delivered in the first week of November.
Musk and Tesla has been sued several times for employees’ claims that they were fired shortly before To share awarded, deprived of their compensation.
However, it seems likely that the current cycle of stock-based compensation for many Twitter employees, who were there before Musk took over, will eventually be paid out.
According to employees at the company and internal communications seen by CNBC, the new shares at auction are expected to be paid for in the first half of November, starting as early as November 4, the employees said. they were reassured by managers that the company’s payroll department was up and running. regarding the disposal of their issued shares.
Tech companies are known for paying a high percentage of their compensation through stock awards, and Twitter has relied significantly on stock payouts. In the first six months of 2022, Twitter record stock-based compensation costs were $459.5 million, up from $289.1 million in the same period a year earlier. This is roughly 20% of Twitter’s revenue for the quarter.
In recent months, Musk has repeatedly pointed out that Twitter is overstaffed, and one of his first moves was to cut it significantly. He was get rid of top executives, starting with the CEO, CFO, Chief Policy Officer and other senior leaders and their direct reports. Musk reported fire them “for reasons,” potentially avoiding paying millions of dollars for the so-called golden parachute.
It is not clear whether other executives and employees who have been fired or who have resigned after Musk’s acquisition of the company will be compensated for the shares that are about to be transferred. Twitter did not immediately respond to a request for comment.
Musk had planned to hold a plenary meeting with Twitter employees on Nov. 2. The meeting was unexpectedly cancelled, employees told CNBC.
The New York Times reported that layoffs at Twitter could come before November 1, a date when many employees are scheduled to receive stock subsidies.
Musk replied, “this is wrong,” in a tweet on Friday, though he did not provide any other evidence or details.
Twitter employees have some reason to worry about their equity, because the company is currently in private hands and because Musk has a history of seemingly trying to avoid payouts.
According to a 2009 transcript from a high-profile Tesla lawsuit, Martin Eberhard suing Elon Musk and his associate, former Tesla Chief Information Officer Gene Glaudell said Musk and other Tesla executives at the time, “did not wanted to say publicly that Tesla made the cuts for financial reasons.” Instead, they tried to label the cuts as “performance and management accountability.”
In one subsequent lawsuit, about 50 former Tesla employees claimed that the company terminated them without paying the equity compensation they had been promised in the job offer. Former Tesla employees won, but the electric-car maker was able to overturn the decision after an appeal.
Musk is the richest person on the planet, with most of his wealth coming from Tesla stock through a perforam system and a historically large compensation package the company has granted him over the years.
Some of Tesla’s unhappy shareholders are expected took Musk and the Tesla board to court this month over his 2018 CEO compensation package. They allege that it was reckless to give Musk too much company stock and that the pay package failed to achieve its stated purpose of keeping him focused on Tesla’s business.
Kathaleen McCormick, the same judge who encouraged Musk and Twitter to resolve their differences and complete a $44 billion transaction they agreed to in April, is deciding the case.
