Twitter reassures employees that shares acquired will be paid this month

Twitter reassures employees that shares acquired will be paid this month

Twitter reassures employees that shares acquired will be paid this month

Elon Musk’s Twitter profile page appears on the Apple iPhone mobile phone.

Norfoto | Norfoto | Getty Images

after, after Elon Musk Completed the $44 billion purchase Twitter Last week, employees at the company prepared for job cuts. Some told CNBC that they are concerned about losing their equity compensation if Musk sends them packing before their shares are awarded in the first week of November.

musk and Tesla They have been sued repeatedly over staff allegations that they were fired not long ago Involved granted, depriving them of compensation.

However, it appears that the current tranche of stock-based compensation for several Twitter employees, who were there before Musk took over, will be paid out after all.

According to employees at the company and internal communications seen by CNBC, the newly vested shares are expected to be paid in the first half of November, beginning on November 4. When processing their acquired stock.

Tech companies are notorious for paying a high percentage of their compensation through stock awards, and Twitter has been remarkably dependent on stock payments. In the first six months of 2022, Twitter registered Equity-based compensation account for $459.5 million, up from $289.1 million during the same period the previous year. That’s nearly 20% of Twitter’s revenue for the quarter.

Musk has indicated several times in recent months that Twitter is overstaffed and that one of his first steps would be to make deep cuts. It is already Get rid of the CEOs, starting with the CEO, CFO, Head of Policy and other high-level leaders and their direct reports. musk It said I kicked them out “for a reason” perhaps to avoid paying millions of dollars in so-called golden parachutes.

It is not clear whether executives and other employees who have been fired or who have resigned after Musk bought the company will be compensated for the shares that are about to vest. Twitter did not immediately respond to a request for comment.

Musk was scheduled to hold a comprehensive meeting with Twitter employees on November 2. The meeting was unexpectedly canceled, employees told CNBC.

The New York Times reported that Twitter’s layoffs could take place before November 1, which is the date many employees were due to receive stock grants.

“That’s a mistake,” Musk replied in a tweet Friday, though he did not provide any evidence or further details.

Twitter employees had reason to worry about equity, given that the company was now in private hands, and because Musk had a history of trying to avoid payments.

According to 2009 testimonial transcripts from a high-profile Tesla lawsuit, Martin Eberhard v. Elon Musk et al, a former Tesla CIO named Gene Glaudell said Musk and other Tesla executives at the time, “did not want to publicly state that Tesla was making cuts for financial reasons.” Instead, they tried to attribute the cuts to “management accountability and performance.”

in ThenAbout 50 former Tesla employees have claimed the company terminated them without paying the equity compensation they had promised in their job offer letters. Former Tesla employees won, but the electric car manufacturer was able to later overturn the decision on appeal.

Musk is the richest person on the planet, with most of his wealth derived from Tesla stock via perforam and a historically large compensation package the company has given him over the years.

Some Tesla shareholders are unhappy specific To take Musk and Tesla’s board of directors to court this month over the 2018 CEO compensation package, they claim it was reckless to give away so much of the company’s stock to Musk, and that the pay package failed to achieve the stated purpose of getting him to focus on Tesla’s business.

Kathleen McCormick, the same judge who encouraged Musk and Twitter to settle their differences and complete a $44 billion deal they agreed on in April, is adjudicating the case.

Watch: Twitter is now Elon Musk’s company

Twitter reassures employees that shares acquired will be paid this month

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