Report: Top Twitter executives fired ‘for cause’ to avoid severance payouts

A new report claims that top Twitter executives were fired for just cause in an attempt to avoid significant severance payouts and unvested stock awards.

According to The Deep Dive, former Twitter CEO Parag Agrawal, and other executives let go by Elon Musk, could be entitled to compensation ranging from $20 million to $60 million under the merger agreement.

However, research firm Equilar told Reuters that the C-suite separation payouts or “golden parachutes” might be closer to $122 million.

Twitter’s new owner hasn’t explained his reasoning for firing the company’s top executives for just cause.

The terminations took place before Musk moved ahead with plans to lay off around 3,700 employees, or 50 per cent of Twitter’s workforce, in a bid to reduce costs.

At least two high-ranking Canadian executives have been let go during the latest round of cuts.

Paul Burns, managing director at Twitter Canada, and Michele Austin, Twitter’s director of public policy for Canada and the U.S., took to LinkedIn on Nov. 4 to share that they had been laid off.

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• Employment lawyer on mass layoffs in the tech industry
• Layoffs in Canada

Can senior executives be fired for cause in Canada?

In Canada, non-unionized employees and senior executives can be fired for just cause, which means you don’t receive a severance package and can’t access Employment Insurance (EI) benefits.

However, this type of termination is reserved for the worst kinds of workplace offences, such as insubordination or job abandonment.

To justify dismissing you for just cause, your employer will have to prove:

• Progressive disciplinary measures were applied
• A less severe punishment would be insufficient

If you are fired for cause, contact an experienced employment lawyer at Samfiru Tumarkin LLP immediately.

Since it’s very difficult to prove cause, we can review your situation and help you determine if you are entitled to full severance pay.

WATCH: Employment lawyer Lior Samfiru breaks down everything employees need to know about termination for cause on an episode of the Employment Law Show.

How is severance pay calculated?

Severance pay in Canada can be as much as 24 months’ pay.

The amount of compensation you are owed is calculated using several factors, including:

• Age
• Length of service
• Position
• Ability to find new work

To figure out how much you could be owed, use our firm’s Severance Pay Calculator tool. If it falls short of what is appropriate, you have been wrongfully dismissed and should file a claim for compensation.

LEARN MORE
• Severance pay for provincially regulated employees
• Severance for federally regulated employees
• Severance pay in a recession

What should be included in a severance package for senior executives?

In Canada, a typical severance package for a senior executive is made up of a variety of components, including:

• Salary and bonuses
• Benefits
• Stock options
• RRSP’s and other pension contributions
• Membership fees
• Legal fees incurred
• Outplacement counselling

The severance package should include anything that the senior executive or C-suite employee was entitled to above and beyond their base pay.

What is a golden parachute?

A “golden parachute” is a special clause in C-suite severance packages.

It usually includes providing top executives at a company with a significant amount of compensation if they are fired without cause.

• Example: Tom has been the CFO of his company for 11 years. His employer informed him that he will be let go at the end of 2022. The “golden parachute” clause in his severance package ensures that he will receive a substantial amount of money and stock awards once he no longer works for the business.

Are there limits as to what senior executives can receive in their severance package?

The short answer is yes. Severance pay for senior executives in Canada can be limited by their employment contract.

Your agreement might include a termination clause that restricts your severance entitlements to the minimum amount mandated by provincial legislation.

However, if there aren’t any termination clauses in your contract, you could be owed full severance pay under common law.

LEARN MORE
• ’60 days or more’: Is it an enforceable termination clause?
• Employment Law Show: 5 things to know about employment contracts

Employment lawyers for senior executives in Canada

If you are a senior executive who has been fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our lawyers in Toronto, Ottawa, Calgary, and Vancouver have helped tens of thousands of individuals across Canada resolve their workplace issues.

We can review your situation, enforce your rights, and ensure that you receive the compensation you are owed.