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CEO Ousted, Returns Hours Later Amidst Executive Shake-up
17 Sep
Summary
- CEO placed on paid leave, returned to role within 33 hours.
- Two executives signed severance packages worth $8.15 million.
- Company is reviewing the legality of the severance agreements.
Last week, Automattic's board voted to place CEO Matt Mullenweg on paid leave, a decision that lasted approximately 33 hours. Mullenweg alleged he was given insufficient notice and denied legal counsel before the vote. Upon his return, two executives, CFO Mark Davies and Chief Legal Officer Andy Missan, who had signed each other's generous severance agreements during Mullenweg's brief leave, were dismissed.
These severance packages, totaling $8.15 million, include 12 months of base salary, accelerated equity vesting, and an additional year of health coverage. Automattic's legal team is now evaluating whether to honor these agreements or challenge their legal validity. New counsel has been appointed, and the company's General Counsel's account was deactivated, suggesting further changes.
The severance agreements feature clauses that narrowly define 'cause' for termination, potentially complicating the company's efforts to avoid payouts. Notably, CFO Mark Davies reportedly held no Automattic stock at the time of his departure. The situation has led to speculation about the board's motives, with theories ranging from a response to internal leadership crises, including allegations of evidence destruction in a legal battle, to a potential strategic transaction.
