Elon Musk’s Twitter promised employees at least half their bonuses last year and then didn’t pay up, lawsuit says

Twitter has a cash performance bonus plan that is paid out annually and in the months leading up to Elon Musk’s acquisition of the company in October, executives, including former Chief Financial Officer Ned Segal, said the bonuses would be paid, according to the lawsuit filed Tuesday in San Francisco federal court. 

“Twitter refused to pay employees who remained employed by the company in the first quarter of 2023 any bonus,” the employees said.

Since Musk took over, Twitter has lost more than half its advertising revenue as brands stopped trusting the site to remove violent, pornographic and hateful content. Twitter also shed more than 75% of its employees, through layoffs and resignations. The site has been roiled by technical difficulties, including during a recent launch of Florida Governor Ron DeSantis’ campaign for president.

The proposed class-action complaint on behalf of current and former Twitter employees employed in the first quarter of 2023 who didn’t receive their bonus was filed by Mark Shobinger, who was Twitter’s senior director of compensation until late last month. The job entailed overseeing executive and incentive pay and in November expanded his responsibilities to include employee compensation globally, according to the suit.

Twitter has disbanded its media relations department and doesn’t respond to requests for comment.

Since Musk’s acquisition, the company has been sued numerous times for allegedly failing to pay its bills, including rent, and by former employees for severance and back pay.

The social media company has traditionally set a target for its bonus plan, which is funded throughout the year and pays out at least 50% of the target annually, according to the lawsuit. 

“Both before and after Musk’s acquisition was completed in October 2022, Twitter’s management continuously promised the company’s employees, including plaintiff, that their annual bonus for 2022 would be paid under the Bonus Plan,” the employees said in the lawsuit.

Because Twitter reneged on various promises to its employees, including its refusal to pay the bonuses, Shobinger said he quit. He sued for breach of contract.