Elon Musk, who owns social media platform X, reportedly has a new rule for X employees who want to access their stock options.
After the company reportedly informed staff in June during an internal meeting that promotions would be delayed, and that a new promotions process, which involves “doing lighter-weight check-ins throughout the year,” would be implemented, Musk has informed staff of another major change.
Related: Elon Musk’s X threatens laid off employees over a major mistake
In a late-night email to X employees, Musk informed them that their stock option rewards in the near future would be tied to the impact they make at the company. This means that in order to access their stock rewards, they would have to send a one-page summary to management on their contributions at the company, according to a new report from The Verge.
Musk’s move came after he emailed employees in 2022, saying that they needed to be “extremely hardcore” in order to build Twitter 2.0, which involves working “long hours at high intensity.”
“Only exceptional performance will constitute a passing grade,” said Musk in the email in November 2022.
Chief Technology Officer of X Elon Musk. (Photo by Richard Bord/WireImage)
The decision to require employees to write a one-page summary of their performance in order to access stock options is not illegal. Still, it could open the door for trouble since stock options are usually rewarded on objective performance criteria rather than subjective ones in order to avoid discrimination, according to employment attorney Lori Deem.
“If they’ve done it a different way in the past, and now this is a new highly subjective criteria that’s being added in order to receive stock options, I can’t rule out that some employees aren’t going to to suggest that it’s discriminatory,” said Deem.
More on Elon Musk:
Trump and Musk’s union-busting joke wasn’t funny to the UAWTesla quietly made a controversial change to the CybertruckElon Musk’s subtle EV pitch nudges Trump in the right direction
Deem also said that stock options are often considered discretionary, meaning that employers may not be legally obligated to award them to employees unless it is outlined in an employment contract.
Elon Musk vs. former Twitter/X employees
In the past, Musk has faced legal challenges from former Twitter/X employees over allegedly denying them benefits.
After Musk officially took over Twitter, now known as X, on October 27, 2022, he said he laid off over 6,000 employees at the company, shrinking headcount by 80%.
These layoffs, however, became the source of a lawsuit from former executives at the company who allege that Musk declined to pay them around $200 million in severance after “firing them without reason.”
“Musk’s refusal to pay Plaintiffs their benefits is part of a larger pattern of refusing to pay Twitter’s former employees the benefits and other compensation they are due,” reads the lawsuit.
Related: Veteran fund manager sees world of pain coming for stocks
