Elon Musk’s X Settles $128 Million Dispute with Former Twitter Executives

Elon Musk’s X Settles $128 Million Severance Dispute with Former Twitter Executives

October 8, 2025 — Elon Musk’s company X has reached a $128 million settlement with four former senior executives of Twitter, bringing an end to a year-long legal battle over unpaid severance compensation. The agreement closes one of the most high-profile corporate disputes in Silicon Valley since Musk’s takeover of the platform.

The executives involved are former CEO Parag Agrawal, CFO Ned Segal, Legal Head Vijaya Gadde, and General Counsel Sean Edgett. They alleged that Musk terminated them immediately after acquiring Twitter and denied the severance payments promised under their contracts.

Although the detailed terms of the settlement were not made public, both parties agreed to resolve the dispute out of court, marking a major step toward easing tensions between Musk and the former leadership team.

The conflict dates back to March 2024, when the executives filed a lawsuit accusing Musk of deliberately closing the Twitter acquisition one day early to prevent their stock options from vesting—effectively saving millions in payouts. Musk’s legal team, however, argued that the executives were dismissed for performance-related reasons and were not eligible for severance benefits.

Earlier this year, X also settled a separate $500 million severance case involving thousands of laid-off employees. These consecutive settlements highlight the legal and financial pressures Musk’s social media company continues to face amid its restructuring efforts.

Analysts suggest the latest settlement underscores a broader shift in how major tech firms approach executive compensation and legal disputes. While Musk’s aggressive management style has often driven innovation, it has also exposed his companies to significant reputational and legal risks.

Industry experts believe this resolution reflects a strategic move by Musk to minimize legal distractions and refocus on X’s core business goals, including AI integration and digital media monetization. The decision could also help stabilize X’s image and rebuild investor confidence following months of legal and operational challenges.

In the long run, Musk’s decision to settle this high-profile case may signal a broader trend across the tech industry — one emphasizing corporate accountability, transparency, and ethical governance as critical pillars for sustaining investor trust and market leadership.