From TechCrunch · Sarah Perez · · 2m
Automattic execs signed mutual severance deals during CEO ouster
During Matt Mullenweg's 33-hour removal, two executives approved each other's $8.15 million exit packages.
In brief
During Matt Mullenweg's 33-hour removal, two executives approved each other's $8.15 million exit packages. During a brief CEO ouster at Automattic, the interim CEO and legal chief signed each other's generous severance agreements worth $8.15 million combined. Originally reported by TechCrunch.
Mullenweg ousted for 33 hours
On September 9, Automattic's board voted to put CEO Matt Mullenweg on paid leave with just 50 minutes' notice. He returned 33 hours later.
CFO became interim CEO
CFO Mark Davies took over as interim CEO during Mullenweg's brief removal. Three board members who voted for the ouster later departed.
Executives signed mutual severance deals
During the 33-hour window, Davies and Chief Legal Officer Andy Missan signed each other's severance agreements, effective September 10.
Golden parachutes worth $8.15 million
Each executive gets 12 months' salary as a lump sum, accelerated equity vesting, stock options, and a year of health coverage.
Mullenweg fired both upon return
When Mullenweg returned to the CEO role, he fired both Davies and Missan. Automattic now potentially owes them the full severance packages.
Legal team weighing options
Automattic's lawyers are deciding whether to pay the $8.15 million or challenge the agreements' legal validity. The company replaced its counsel.
Agreements favor the executives
The deals narrowly define when firing for cause is allowed. The company must give 60 days' notice and 30 days to fix issues.
Davies' deal protects Automattic
Davies' agreement specifies that losing the interim CEO role won't count as grounds to resign and collect severance, as long as he stays CFO.
Davies held no company stock
An HR document shows Davies held no Automattic stock at departure. He sold it months earlier but still held vested options.
One theory: protecting the board
The board may have acted to address a leadership crisis and protect executives from consequences if the intervention failed, which it did.
WP Engine lawsuit looms large
WP Engine accused Mullenweg of destroying evidence in July. The board action could show the court they took concerns seriously.
Another theory: strategic takeover
Mullenweg suspects the board created a control window for a strategic transaction. The board never gave him a stated reason for the vote.
Absence of explanation fuels suspicion
Without a stated reason from the board, combined with Davies' stock sale, Mullenweg decided to retake control and remove the board and executives.
At a glance
During a brief CEO ouster at Automattic, the interim CEO and legal chief signed each other's generous severance agreements worth $8.15 million combined.
