Elon Musk's Twitter X is being sued by its former chairman for damages he alleges run to more than $23 million over unpaid stock options.

The lawsuit [PDF] was filed in the California Superior Court in San Francisco late last week and concerns $20 million in shares allegedly owed to Twitter's ex- executive chairman, Omid Kordestani.

According to the lawsuit, Kordestani left a highly paid job at Google to join the company - previously known as Twitter - on a significantly reduced salary of $50,000 in his first year, which was less than 0.4 percent of his prior earnings.

However, or so the suit claims, he was given stock options based on performance and Twitter's future value instead of cold, hard cash. These should have been paid out when Musk acquired the social media platform and fired its board, but they were not, claims the suit.

Four other Twitter executives who were jettisoned when Musk took over sued the billionaire earlier this year over $128 million in severance payments and unpaid stock options . At the time, Musk countered that the executives he let go committed gross negligence and wilful misconduct.

Kordestani joined Twitter in 2015 and served as its executive chairman until 2020. In early 2020, as part of an effort to settle an activist action, Twitter tweaked its governance structure, which included retiring the executive chairman role. Kordestani then assumed the role of non-employee director. Twitter granted him additional Restricted Stock Units (RSUs) for his trouble.

Shortly after, Twitter was acquired for $44 billion, and Musk anointed himself the sole member of the board.

According to Kordestani's lawsuit, his stock options - $20.1 million for his vested options, $2.7 million for his performance-based restricted stock units (PSUs), and $246,122.20 for his RSUs - should have been paid out after the deal was closed.

This did not happen.

The lawsuit claims that Musk's social media mouthpiece, X, "now refuses to meet those obligations, adding to a long list of unpaid bills accruing under Mr. Musk's watch."

"X Corp. faces suits and claims from many employees, landlords, and vendors Mr. Musk has failed to pay."

The Register contacted X to get its take on Kordestani's complaint and received the response, "Busy now, please check back later." ®

https://www.theregister.com//2024/08/12/twitters_former_chairman_sues_x/