Elon Musk pays Twitter employee stock options according to a new CNBC article. The publication saw internal messages sent to employees stating payments for their vested shared begin on November 4th. Employees worried about not getting their equity as rumors circulated about layoffs occurring before the payout could begin.
Elon Musk Pays Twitter Employee Stock Options Possibly To Avoid A Lawsuit
The main reason why Elon Musk pays Twitter employees stock options is to avoid a lawsuit. Elon Musk and Telsa has history of firing employees before paying out equity. One executive sued Tesla in 2009 over such claims. Then another lawsuit featured dozens of Tesla employees stating the company let them go without paying their equity. That lawsuit started in 2022 and the employees won. However, Tesla was able to overturn the decision on appeal.
Elon Musk Pays Twitter Employee Stock Options Possibly To Escape Damage To His Reputation
Another reason why Elon Musk wants to compensate his newest employees to escape more damage to his reputation. Currently, the Tesla and now Twitter owner is the richest man in the world. And if he avoids paying out the equity the Twitter employees are rightfully due then it would make him look bad. Especially since he was able to finance the purchase, meaning he has access to additional loans and/or investments to pay the employees.
Of course one can argue Elon Musk doesn’t need to pay the stock options because the employees earned them under the previous Twitter management. And since that management is no longer in power, the agreement regarding stock compensation is invalid. It appears the Twitter employees knew this could happen as they asked in their open letter for Elon Musk to honor their previous agreements regarding employment and stock compensation.
I’ll Continue To Follow This Story
I still have connections with my old coworkers at Twitter and I’m currently talking with some about this topics and others. Before the sale took place many told me they wondered what would happen with their equity. Once I hear back from them I’ll write a new article.