Automattic Executives Sign Reciprocal Severance Deals During CEO's Brief Leave
On September 9, Automattic’s board placed its founder and former CEO Matt Mullenweg on paid leave without a public explanation. He was reinstated approximately 33 hours later after the same board members who voted him out left the company. During his brief absence, interim CEO Mark Davies—who replaced Mullenweg—and Chief Legal Officer Andy Missan signed reciprocal severance agreements for each other. These agreements include one year of base salary as a lump sum, accelerated equity vesting, stock option exercise rights, and continued health coverage. The combined value is $8.15 million, which Automattic may now be obligated to pay after Mullenweg’s return led to their dismissal. The severance terms are structured in favor of the executives, with narrowly defined conditions for what constitutes “cause” that would allow Automattic to avoid paying severance. Additionally, Davies’ agreement excludes his removal as interim CEO from being considered a valid reason for resigning and collecting severance if he remains CFO. The company has since changed legal counsel following this internal conflict. The situation raises governance concerns due to the timing of these agreements during Mullenweg’s brief ouster. It also highlights potential conflicts of interest, especially as Davies held no Automattic stock at the time of his departure.
Topics: board actions CEO removal legal disputes severance agreements