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, The New York Times reported.
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 becomes 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 compensation, and thousands of employees have joined mass arbitration cases that accuse Mr. Musk of wrongfully terminating them and refusing to pay proper severance.
Omid Kordestani, a former board member of Twitter, (now rebranded as X), has filed a lawsuit against Elon Musk’s social media company alleging that they failed to cash out over $20 million worth of his shares, Benzinga reported.
The lawsuit, filed in California Superior Court in San Francisco on Friday, accuses X of benefiting from Kordestani’s seven years of service to Twitter without compensating him.
The Iranian-American businessman, who joined Twitter’s board in 2015, played a significant role in the sale of the company to Musk in 2022. He received most of his compensation in stock.
However, after Musk’s acquisition, he allegedly refused to pay Kordestani for those shares, the report noted.
According to the lawsuit, Musk’s purchase agreement stipulated that Kordestani’s 800,000 stock options, worth over $20 million, should have been paid out within five days of the deal’s closure. However, that payment was allegedly not made.
In my opinion, Mr Musk should have done the right thing and paid out the stock options that Mr. Kordestani had earned. I cannot imagine why Mr. Musk decided to just … not fulfill his obligation to pay Mr. Kordestani what he as owed.