Elon Musk has set the internet on fire by buying Twitter. He has acquired the social networking platform for $43-44 billion in cash. He has spent $21 billion of his own money while the rest has been sourced from debt and margin loan financing. Upon becoming the owner of the newly privatized Twitter, Mr Musk declared he will be the bastion of free speech and will work towards new features, open-sourcing the algorithms, and eliminating annoying spambots from the service. While all those sound encouraging, Twitter CEO Parag Agrawal doesn’t share the same sentiment. And if things don’t work out favourably for Mr. Agrawal, he would still stand to earn a big $39-42 million payout.
Even before the Musk-Twitter deal could close, industry experts had started calculating the possible payout of the top Twitter executives. Some estimates show $978M for Twitter founder and ex-CEO Jack Dorsey and $39M for the current CEO Parag Agrawal. Here’s the how and why:
These current and previous top execs like Dorsey and Agrawal do own stocks of the company. So, with the $54.20 per share price offered by Elon Musk, these folks will get jaw-dropping packages when they eventually sell those shares.
Some reports are even claiming a $38.7 million package for Parag Agrawal, a $25.5 million package for CFO Ned Segal, and a whopping $978 million for Jack Dorsey.
A bit different from this is the projected estimates by research firm Equilar which claims a $42 million package for Parag if he is terminated within 12 months of a ‘change in control’ at Twitter.
‘Change in Control’ are specific clauses in the contracts of these top-level Twitter execs. As per a recent proxy Twitter filing, Agrawal’s clause states he reports to the “board of directors of a publicly-traded entity,” and a deal to take Twitter private will trigger this clause. So, if Musk terminates Parag, he will be getting the aforementioned big-dollar package.
In a joint statement announcing the deal, Mr Agrawal said, “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”
Later in a company all-hands meeting, he is quoted as saying "Once the deal closes, we don't know which direction the platform will go. We don’t have all the answers. This is a period of uncertainty.”
He has apparently also assured Twitter employees that no layoffs are planned at the moment. Also note that at present, there is nothing that strongly suggests whether he or any of the top people at Twitter will leave the company. So, the aforementioned estimates are just that…estimates.
|Release Date:||21 Apr 2022|