Fighting for Equity & Long-Term Incentives After a Sudden Termination

The shock of losing a high-paying job without warning leaves most executives reeling. Beyond the emotional impact, there's often significant financial value left on the table—particularly unvested long-term incentives like RSUs and stock options that could disappear the moment you're escorted out. But you may have more leverage than you think.

Start by reviewing your employment agreement, equity documents and any restrictive covenants with an experienced employment attorney. Some companies have acceleration clauses triggered by a termination without cause, though these are rare outside of executive contracts negotiated before you begin employment. Copies of your performance reviews, emails praising your work, and any evidence contradicting claims of poor performance will be helpful for negotiations.

In almost every instance, the company will insist on you signing a separation and release of claims agreement before any severance pay or benefits are paid out.  They would like you to depart quietly without the public scrutiny that comes with lawsuits. This gives you leverage and power for negotiations – regardless of the facts of your matter. Before you sign anything, have your employment attorney review the separation offer documents to make sure you aren’t leaving anything on the table, or signing away important rights without adequate consideration.

Here are 3 tips for fighting for the value of your equity and long-term incentives:

1.      Frame equity compensation as deferred wages you earned through years of service and value creation delivered to the company. For example, I have utilized a company’s own language to craft a persuasive ask for additional equity vesting, cash equivalents or even an extended exercise windows for stock options. 

2.      Be strategic about your approach. Express disappointment professionally rather than making threats. Emphasize your contributions and the value you have brought.  

3.      If the company refuses to budge on the equity, have a back-up plan for alternative asks – for example, negotiate for increased cash severance, extended healthcare or other insurance coverages, or even positive references.

Your employment lawyer may work with your tax or financial advisor to analyze opportunities and their tax implications. Your years of service, and the loss of the value of a significant portion of your annual compensation, deserve more than a standard severance package.

Let’s examine some high-profile cases in the news where departing executives had to fight to recover value for severance and equity post-termination of employment. The most prominent involves the former Twitter (now X) executives fired by Elon Musk.

The Twitter/X Executive Severance Battle (2024-2025)

Four top Twitter executives—former CEO Parag Agrawal, CFO Ned Segal, Chief Legal Officer Vijaya Gadde, and General Counsel Sean Edgett—sued Elon Musk in 2024 for $128 million in unpaid severance after being fired immediately following his acquisition of the company in October 2022. All executives were terminated within hours of Musk taking control – and only one day before they would have received $200 million in severance payments and vested stock options.

The lawsuit alleged that Musk fired them "for cause"— citing gross negligence and willful misconduct—in what appeared to be a deliberate scheme to deny them their contractual severance payments. According to the complaint, Musk told his biographer he would “hunt every single one of the executives ‘til the day they die" and bragged about how he planned to deny them severance to save himself $200 million.

The individual amounts sought were substantial: more than $57 million for Agrawal, over $44 million for Segal, over $20 million for Gadde, and more than $6 million for Edgett.

The outcome: Musk and X reached a settlement with the executives in October 2025, though the specific terms were not disclosed publicly. This came after a judge ruled in November 2024 that the executives could proceed with their claims that Musk terminated them to cheat them out of severance.

This case demonstrates that even billionaires eventually settle when executives have strong contractual protections and are willing to fight in court. The key factors in the executives' favor were their clear contractual provisions, documented evidence of the timing, and willingness to pursue litigation despite the costs involved.

Boeing CEO Dennis Muilenburg (2019-2020)

Dennis Muilenburg was fired in December 2019 following a series of major company setbacks, including two fatal crashes, delays and numerous issues with the company’s 737 Max airplane. The two crashes killed 346 people, yet Muilenburg was permitted to leave with $62 million in compensation and pension benefits after 30 years of service with Boeing.

While Boeing denied Muilenburg severance pay and forced him to forfeit stock awards worth tens of millions, his massive payout despite the catastrophic failures under his leadership sparked public outrage, particularly from families of crash victims.

These cases demonstrate that even when CEOs are fired for “cause” or performance failures, arguments can and have been made over "severance" and "contractual entitlements" that made the difference as to whether they walk away with tens - or hundreds - of millions of dollars.

Bottom Line: It pays to have your matter evaluated by an experienced employment attorney, and all avenues explored, before you agree to sign on the dotted line - either signing a new employment agreement or signing a severance package - without first advocating for your best deal. The best advice is advice tailored to your particular situation and needs. Call us for a free consultation.