Twitter tells worried employees their vested shares will be paid in coming days - CNBC

After Elon Musk closed his $44 cardinal acquisition of Twitter past week, employees astatine the institution braced for occupation cuts. Some told CNBC they were disquieted astir losing their equity compensation if Musk sent them packing earlier their shares vested the archetypal week of November.

Musk and Tesla person been sued repeatedly implicit employees' claims that they were fired conscionable earlier their shares vested, depriving them of compensation.

However, it appears that the existent tranche of stock-based compensation for galore Twitter employees, who were determination earlier Musk took over, volition get paid retired aft all.

According to employees astatine the institution and interior communications viewed by CNBC, recently vesting shares are expected to beryllium paid successful the archetypal fractional of November, starting arsenic aboriginal arsenic Nov. 4. Employees said they were reassured by managers that the company's payroll section was moving connected processing their vested stock.

Tech companies are known for paying a precocious percent of their compensation done banal awards, and Twitter has been notably reliant connected equity payouts. In the archetypal six months of 2022, Twitter recorded a stock-based compensation disbursal of $459.5 million, up from $289.1 cardinal during the aforesaid play a twelvemonth earlier. That's adjacent to 20% of Twitter's gross for the quarter.

Musk has indicated galore times successful caller months that Twitter is overstaffed and that 1 of his archetypal moves would beryllium to marque melodramatic reductions. He's already gotten escaped of apical executives, starting with the CEO, CFO, argumentation main and different high-ranking leaders and their nonstop reports. Musk reportedly fired them "for cause," perchance to debar paying millions of dollars successful alleged aureate parachutes.

It's not wide whether different executives and employees who were fired oregon who resigned aft Musk bought the institution volition beryllium compensated for shares astir to vest. Twitter didn't instantly respond to a petition for comment.

Musk was scheduled to clasp an all-hands gathering with Twitter employees connected Nov. 2. The gathering was canceled unexpectedly, employees told CNBC.

The New York Times reported that layoffs astatine Twitter could instrumentality spot earlier Nov. 1, a day erstwhile galore employees were scheduled to person banal grants.

Musk responded, "this is false," successful a tweet connected Friday, though helium didn't supply immoderate grounds oregon further details.

Twitter employees had immoderate crushed to beryllium acrophobic astir their equity, fixed the institution is present successful backstage hands, and due to the fact that Musk has a past of seemingly trying to debar payouts.

According to 2009 deposition transcripts from a high-profile Tesla lawsuit, Martin Eberhard v. Elon Musk et al, a erstwhile Tesla Chief Information Officer named Gene Glaudell said Musk and different Tesla executives astatine that time, "did not privation to accidental successful nationalist that Tesla was making cuts for fiscal reasons." Rather, they tried to property the cuts to "performance and absorption accountability."

In a lawsuit aft that, astir 50 erstwhile Tesla employees claimed the institution had terminated them without paying equity compensation that they'd been promised successful occupation connection letters. The erstwhile Tesla employees won, but the electrical conveyance shaper was capable to overturn the determination aboriginal connected appeal.

Musk is the richest idiosyncratic connected the planet, with astir of his wealthiness derived from Tesla banal via the perforam and a historically ample compensation bundle that the institution has granted him done the years.

Some unhappy Tesla shareholders are slated to instrumentality Musk and the Tesla committee to tribunal this period implicit his 2018 CEO compensation package. They allege that it was reckless to springiness distant truthful overmuch of the company's banal to Musk, and that the wage bundle failed to execute its stated intent of getting him to absorption connected Tesla's business.

Kathaleen McCormick, the aforesaid justice who encouraged Musk and Twitter to settee their differences and implicit the $44 cardinal transaction they agreed to successful April, is deciding the case.

WATCH: Twitter is present Elon Musk's company