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What Elon Musk’s $44 billion Twitter takeover means for its executives

What Elon Musk’s $44 billion Twitter takeover means for its executives


With Elon Musk now set to take over Twitter after bidding $44 billion for it in April 2022, news about the potential firing of some high-profile executives has spread like wildfire.

Reportedly, one of the highest paid executives at the social networking site, Vijaya Gadde, could get fired by Musk, while CEO Parag Agrawal is already on the chopping block once the deal is complete.

Gadde, who reportedly earns around $17 million, is the company’s top censorship advocate. And Musk has been openly criticising her suspension of certain controversial accounts.

But, what would happen if these Twitter employees decided to sue the company over an unjust dismissal?

Well, a Directors and Officers Insurance policy is meant to deal with exactly that, among other things.

A D&O policy comes with a cover for wrongful termination of employment, which protects the company from any claims of negligence, misconduct, or breach of duty levelled by an ex-employee against a director or top officer.

In the event of a wrongful employment practice claim, this policy can help with defence expenses and any settlement or compensation that becomes payable to the claimant.

However, taking the legal route may not always be an option. Employees who accept severance packages are usually required to sign a release stating they will not seek further compensation or pursue legal action against the company.

Twitter’s Gadde, for instance, might take home a $12.5 million severance package that includes Twitter shares.

Nevertheless such packages only get offered to a select few, making a D&O policy crucial in dealing with an expensive lawsuit.

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Further Reading

Read more: What is Director's and Officer's Insurance?