New York (CNN Business) — Three of Elon Musk’s top Twitter executives fired on Thursday will walk away with about $187 million in their bank accounts.
Former CEO Parag Agrawal, former CFO Ned Segal and former general counsel Vijaya Gadda were removed after Musk took control of the company late Thursday, according to a source familiar with the situation.
The executives would have received a large portion of that money even if they had stayed on board under the new management. They and other shareholders will receive payments from Musk after he bought their shares at a price of $54.20.
Fired Twitter executives Ned Segal, left, Parag Agrawal, center, and Vijaya Gadda, right, leave the company with $187 million in Elon Musk’s money. Credit: Kevin Dietsch/David Paul Morris/Bloomberg/Getty Images
Agrawal, who took over as CEO a little less than a year ago, had the smallest stake of the three: 155,000 shares worth $8.4 million at the price Musk paid. Segal will receive $22 million for the 406,000 shares he owns, while Gadde will walk away with $34.8 million for his 642,000 shares.
But they also get severance pay in the event of termination under a clause in the merger agreement approved by shareholders. That includes one year’s base salary: $1 million for Agrawal and $600,000 for Segal and Gadde. They will also get a year of health insurance, worth about $73,000 between the three of them.
By far the most profitable part is the accelerated acquisition of shares that should have been received in the future, but were not yet entitled to. The value of these shares will be US$56.4 million for Agrawal, US$43.8 million for Segal and US$19.4 million for Gadde. Agrawal and Segal get accelerated vesting of all their shares, while Gadde gets accelerated vesting of only half of his shares.
In total, the compensations paid amount to 121.8 million US dollars. If we add $65.2 million to buy the shares they already own, we get $187 million.