Can Elon Musk prevent Twitter employees from receiving their lucrative stock payouts?

Elon Musk has purchased Twitter and taken the social media platform off the New York Stock Exchange, which makes Twitter a private company. Since Elon Musk's purchase of Twitter, he has fired severed senior executives whose view for the platform's future didn't align with the Tesla CEO. According to NYTimes, there is now speculation about whether Musk will block Twitter employees from a $100 million payout, after his Twitter buyout. 

What is the $100 million payout about?

This isn't the severance package that is owed to the Twitter executives fired under the "Golden Parachute Compensation" clause. The $100 million payout that is being referred to in the speculations is the payout that around 7,500 employees were supposed to receive on Tuesday as the employment compensation programme will vest on Tuesday. If Elon Musk however decides to fire these 7,500 people, he could technically block their payout as the money that was owed to them was in form of equity grants wheras Twitter is now a private company and no longer a company listed on NYSE. 

Musk had promised to cover the cost of equity grants with cash

During his negotiations with the micro blogging firm before the Twitter buyout, Musk had agreed to "cover the values of those grants in cash payments to employees who were due compensation," as per a report from the NYPost. Employees in Twitter are now concerned that Musk might not abide by the assurances he had earlier given to these employees. Although, if Musk does fire these people before Tuesday in an attempt to block their $100 million payout, these employees could sue Elon Musk. "Employees could conceivably allege that Twitter violated a duty of 'good faith' by terminating them principally to avoid having to pay them for services they've already rendered," said Eric Talley, a professor at Columbia Law School to Newsweek. The dilemma for Musk is this - as per multiple reports, many of these 7,500 employees are just waiting for their payout after which they plan to leave the company to head into other gigs they have already lined up. 

In other words, Musk would be essentially paying a significant number of people who don't plan to work in Twitter anyway and are just waiting for the payout before they quit. Firing them before Tuesday might save Musk from spending $100 million in paying them out. On the risk of being sued by these Twitter employees, Jennifer Shinall, a law professor at Vanderbilt University said to Newsweek that, "I think [Musk's legal representation has] a real opportunity to say it's not bad faith; it's just bad timing and we just acquired this company. It's a really tough case because courts really prefer to respect contractual terms as they are written, especially when it's two sophisticated parties negotiating the terms of the contract."