Elon Musk Should Sack Twitter CEO Parag Agrawal On Day 1 For Reasons Worth $42 Million

When discussing Twitter, Jack Dorsey comes to your mind when you discuss the man who founded Twitter. Twitter probably wouldn't have existed if a man by the name of Evan Williams had. Evan Williams was the one who developed the idea for what is soon to become Elon Musk's new boy. The following is a brief history of Twitter that most people are unaware of:

Evan Williams joined Google after selling his firm, Blogger, to the search engine company in 2003. After a while, he became bored, so at the beginning of 2006, Evan, a Google coworker named Biz Stone, and Evan's neighbor, Noah Glass, joined together to launch a broadcasting company they named it Odeo.

As the creator of Blogger, Jack Dorsey recognized Evan when he saw him one day at a coffee shop. Jack casually emailed Evan to inquire about the possibility of hiring a skilled programmer for whatever project he was currently working on. Jack began working with Odeo in this manner. Evan began looking for another idea to pivot to when Odeo failed to truly take off. Evan polled every member of the Odeo staff to see if they had any innovative tech concepts. The concept of "Status" was one that Dorsey had been experimenting with. A public website would let users post goodbye notes under Status. Yada yada yada, a nickname picked by Noah Glass, evolved into Twitter and subsequently Twitter.

The money that Odeo had in the bank was all returned to its investors by Evan, Jack, Noah, and Biz. Then they used the newly created LLC known as Obvious Corporation to buy all of Odeo's assets. In April 2007, Jack was chosen by Evan to lead Twitter after it became a separate corporation. Before the board's demand that Jack is fired, Jack served as CEO for nearly a year. The CEO position was thereafter filled by Evan Williams. When Dick Costolo took over as CEO two years after Evan Williams left, he was replaced. Twitter's 2013 IPO was successful under Dick's leadership. 

Dick was CEO from June 2015 till the present. Upon his arrival back in town, Jack Dorsey was reappointed as CEO for a second time. Jack worked for Twitter until November 2021, at which point Parag Agrawal, who had worked previously there as CTO, took over.

When Parag was appointed CEO, he received $30.4 million in salary, the majority of which came in the form of Twitter stock awards. More importantly, he drafted a clause in the contract that was likely viewed as utterly superfluous and connected to Twitter's ownership status. I will return to this shortly.

Photo by Kevin Dietsch/Getty Images

Before Elon Musk completely turned things upside down, Parag had been the CEO for around three months. As you probably already know, Elon Musk started taking Twitter seriously in March 2020, at first by simply investing in the company before eventually requesting to purchase it outright.

On April 25, 2022, Elon's $44 billion offer was accepted by Parag and the board.  five months have passed since Parag began working there.

Forward quickly...

Parag did not enjoy those months. Undoubtedly, Parag and Elon do not get along well with one another. If Elon sack Parag the moment the sale is finalized, it would not be the slightest bit unexpected.

And Mr. Agrawal would find that to be very good news!

By that particular clause in his employment contract, Twitter is obligated to compensate Parag if the company ever changes ownership AND if the new owner fires Parag within the first 12 months of the change.

$42 million.

If it occurs, Parag's earnings during his ten-month tenure as CEO are probably going to be in the range of $75 million. Not a bad job if you can land it and are prepared to suffer through hell each day for around 6 months.

Should Elon Musk, who despises the man, swallow his pride and give him $42 million in exchange for his silence? Or do you maintain him in that position, cut his pay from $1 million to $100,000 annually, make his job unbearable, and then hope he resigns? We'll find out!