Happy Halloween. 🎃 Hefty interest costs and large severance payouts mean that Twitter may not have enough fuel to reach its destination without shedding some weight. Chief Twit Elon Musk has some cost-saving ideas, though. His first is to force freshly fired CEO Parag Agrawal from the plane wearing only a backpack, rather than the golden parachute he was promised.

The lowdown

• 😑 $122 million in golden parachutes for fired Twitter executives may be withheld.

• 🚨 Another Fed rate hike is expected this week, with a decision to be announced on Wednesday.

• 💅 Shopify to use celebrities, including Kardashians, in its effort to compete with Amazon.

Flex your finance muscle 💸💪

We take a break from our regular programming of working through a VC term sheet to look at a term that is a little more topical.

Golden Parachutes 🪂

At its most basic, a golden parachute is an agreement between an employer and an employee which allows for that employee to be compensated upon certain termination events. It is a mechanism commonly used to compensate top executives with severance pay, equity and other benefits in the event of a takeover where the management team is replaced or where the employee is terminated in some way.

A clause is frequently included in such agreements that does not require the employer to compensate the employee in the event he or she is a ‘bad leaver’ – that is, terminated after violating company policy or for illegal behaviour. It is being reported that Musk has fired former Twitter executives Parag Agrawl, CFO Ned Segal and legal affairs and policy chief Vijaya Gadde ‘for cause’, which could deny them their golden parachutes valued at $122 million.

Read more about golden parachutes and why they are controversial here.

Featured stories

SEC rule changes invite more activism

New SEC rules will allow shareholders to nominate and seek removal of individual directors by proxy. Previously, this could only be done by voting in person at a shareholder meeting or, if not, in person, by voting for all directors put forward by a particular group.

Now, this does sound very boring but stay with me and I will explain why this may actually lead to some excitement (and better corporate governance).

Activist investors unhappy with the direction of a company may seek to drive change, by toppling the board of directors and installing a new board. Until now, there was no real mechanism to separate the sheep from the GOATs and so, by taking control of a board, the valuable experience of some of the sitting board members would be lost. Concerns about continuity could be a reason why an activist board spill may not succeed.

Under the new rules, investors can ‘pick and mix’, which means that activist shareholder campaigns may be more likely to succeed and, therefore, more frequent — and who doesn’t love a bit of chaos? ($).

Read more about the rule changes here ($) and here.

The content we're consuming today

• WSJ: For Twitter’s Next CFO, Lots of Debt and a Slowing Economy ($)

• WSJ: CFOs Detail Plans to Manage Inflation, Shifts in Consumer Demand ($)

• The Verge: Elon Musk wastes no time changing Twitter

Off-balance sheet items

• It's Halloween today, so I am recommending the scariest movie I’ve ever seen: Get Out

The bottom line