Automattic Interim Leaders Signed Mutual Severance Packages During Mullenweg’s 33-Hour Ouster

Automattic executives who assumed control during a brief boardroom coup last week have secured substantial exit packages, creating a potential financial liability for the company now that founder Matt Mullenweg has reclaimed his role as CEO. The severance agreements, valued at $8.15 million combined, were signed reciprocally by CFO Mark Davies and Chief Legal Officer Andy Missan during the 33-hour window that Mullenweg was placed on paid leave.

The board voted on September 9 to suspend Mullenweg, a move he publicly contested. In a Slack message to staff, the CEO accused Davies of conspiring with three board members to force the vote through with only 50 minutes’ notice, denying him time to consult outside legal counsel. Mullenweg returned to his post on September 12, and the same directors who orchestrated his removal have since departed the company.

According to severance documents reviewed by TechCrunch, the packages effective September 10 provide each executive with 12 months of base salary paid as a lump sum, accelerated equity vesting, the ability to exercise vested stock options, and an additional year of health coverage. Because Mullenweg dismissed both Davies and Missan upon his return, Automattic is now facing the decision of whether to pay out these sums or challenge their legal validity.

The agreements include strict definitions of “cause” that would allow executives to terminate without forfeiting severance. Under the terms, cause is narrowly defined as gross negligence, fraud, material legal violations, or breaches of confidentiality and intellectual property rights. Furthermore, the contracts require the company to provide 60 days’ written notice and a 30-day cure period before declaring cause, with a majority board vote required to finalize the determination.

Notably, Davies’ agreement specifies that his removal from the interim CEO position does not constitute “good reason” for resignation, provided he retains his CFO title. Legal analysts suggest this clause was specifically drafted to prevent Davies from claiming severance based on the demotion from interim CEO, indicating the documents were tailored to his unique circumstances.

Additional scrutiny has emerged regarding Davies’ financial holdings. An HR document indicates he owned no Automattic stock at the time of his departure, though sources claim he sold his shares a few months prior—a timeline TechCrunch cannot independently confirm. He did, however, retain a significant number of vested options.

The timing of these events has fueled speculation regarding the board’s motivations. One interpretation suggests the leadership change was a response to an ongoing legal battle with WP Engine. In July, the hosting provider accused Mullenweg of spoliation, alleging he destroyed evidence via encrypted messaging apps like Signal and Telegram. Placing Mullenweg on leave could be viewed as an attempt to demonstrate to the court that the board is taking the allegations seriously, potentially mitigating sanctions or improving settlement prospects.

Conversely, Mullenweg suspects the board sought to create a temporary window of control for other strategic purposes. The lack of a stated reason for the ouster, combined with the reciprocal severance deals and Davies’ prior stock sale, contributed to Mullenweg’s decision to retake the helm and dismiss the involved board members and executives.

Automattic has replaced its former counsel, Gibson Dunn, with Susman Godfrey LLP to handle the legal defense. Meanwhile, General Counsel Jordan Hinkes reportedly had his company accounts deactivated, signaling his departure as well. The company has been approached for comment regarding the pending severance disputes.