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Technology|Former Twitter Board Member Sues Elon Musk’s X For $20 Million in Pay
https://www.nytimes.com/2024/08/09/technology/elon-musk-x-twitter-board-lawsuit.html
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After purchasing Twitter, Mr. Musk failed to cash out Omid Kordestani’s stock, according to allegations in a new lawsuit.
Aug. 9, 2024, 4:16 p.m. ET
A former Twitter board member, Omid Kordestani, sued the social media company owned by Elon Musk on Friday, claiming that the billionaire refused to cash out more than $20 million worth of shares.
Mr. Kordestani, who joined Twitter’s board in 2015 and helped oversee the sale of the company to Mr. Musk in 2022, received most of his compensation in stock. But after Mr. Musk bought the company, now called X, he refused to pay Mr. Kordestani for those shares, the lawsuit said.
X “seeks to reap the benefits of Mr. Kordestani’s seven years of service to Twitter without paying him for it,” said the suit, which was filed in California Superior Court in San Francisco.
A representative for X did not immediately respond to a request for comment.
Such a public battle between a former board member and the company he once helped manage is rare — most boardroom disputes are settled quietly behind the scenes. But Mr. Musk’s tumultuous acquisition of the social media company for $44 billion upended many notions of normal business practices, and the billionaire has faced a slew of lawsuits over his handling of the deal.
With his lawsuit, Mr. Kordestani became the most senior Twitter leader to take legal action against Mr. Musk — but certainly not the first. Twitter’s former chief executive, chief financial officer, and top lawyers have also sued the company to recoup unpaid compensation, and thousands of employees have joined mass arbitration cases that accuse Mr. Musk of wrongfully terminating them and refusing to pay proper severance.
The former top executives have accused Mr. Musk of withholding severance payments that they said were automatically owed when he acquired the company. After the takeover, Mr. Musk laid off thousands of employees en masse and offered limited severance, which the former employees have argued was less than what they were due under their employment contracts.
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