Automattic Executives Executed Mutual $8.15M Exit Packages During CEO Matt Mullenweg's Brief Suspension

During the brief 33-hour window in which Automattic founder Matt Mullenweg was placed on leave by the company’s board of directors, two top executives executed reciprocal exit packages for each other that could cost the web publishing vendor millions of dollars. Mark Davies, the company’s chief financial officer who stepped into the interim chief executive role during the leadership disruption, and Andy Missan, the chief legal officer, signed off on each other's severance agreements, effective Sept. 10. The arrangements came to light following a turbulent governance clash that ended with Mullenweg quickly reclaiming control of the business.

The executive standoff began on Sept. 9, when Automattic’s board of directors voted to place Mullenweg on paid leave under circumstances the board has yet to clarify publicly. In a message posted to an internal company Slack channel, Mullenweg accused Davies of orchestrating a secret effort alongside three board members to push through the unexpected suspension. Mullenweg stated that he received just 50 minutes of advance notice before the vote took place and was refused additional time to have the board resolution reviewed by his own outside legal team. Approximately 33 hours later, Mullenweg returned to his position as chief executive, and the three board members who supported his removal subsequently departed the enterprise software provider.

While Mullenweg was temporarily removed from executive authority, Davies and Missan finalized departure packages that provided extensive financial protections. According to internal exit documents reviewed by TechCrunch, the contracts grant each executive a lump-sum payout equal to 12 months of base salary, accelerated vesting for all unvested equity, extended rights to exercise vested stock options, and 12 months of continued health insurance coverage. Combined, the total value of the cash payments and accelerated equity across both packages equals $8.15 million, an amount Automattic may now be obligated to pay given that Mullenweg fired both executives immediately upon taking back control of the firm.

Automattic's legal team is currently evaluating how to respond to the financial claims, weighing whether to fulfill the severance payments or initiate a legal challenge regarding the validity of the reciprocal signing arrangement. As part of its response to the situation, Automattic and Mullenweg jointly confirmed that the company replaced its previous external legal counsel, Gibson Dunn, with litigators Stephen Shackelford and Shawn J. Rabin from law firm Susman Godfrey LLP. Additionally, corporate accounts belonging to Automattic General Counsel Jordan Hinkes were deactivated, signaling that he has also been separated from the firm.

The severance agreements require the departing executives to execute broad liability releases and maintain compliance with ongoing confidentiality and non-solicitation obligations to receive their payouts. The documents also construct a high threshold for "cause" terminations, which would allow Automattic to fire an executive without paying severance. Cause is narrowly defined to cover gross negligence causing material damage, intentional dishonesty or misrepresentation causing material harm, major legal or regulatory violations, breaches of intellectual property obligations, or felony convictions involving moral turpitude. To enforce a cause termination, Automattic must provide written notice within 60 days of uncovering the alleged misconduct, grant a 30-day period to cure the behavior if feasible, and secure a formal majority vote from the board confirming the cause finding.

The contracts also contained tailored language for Davies, explicitly noting that removing him from the temporary chief executive role would not trigger a "Good Reason" clause allowing him to resign and collect full severance benefits, provided he remained in his post as chief financial officer. Separate internal human resources records examined by TechCrunch revealed that Davies held no direct Automattic shares when he was terminated, having reportedly liquidated his equity several months prior, though he continued to hold a substantial balance of unexercised vested stock options.

The governance dispute has fueled contrasting interpretations among corporate observers and company insiders regarding the board's underlying intent. One explanation suggests directors were attempting to manage serious litigation risks linked to an ongoing legal battle with web hosting service WP Engine. In July filings, WP Engine accused Mullenweg of destroying potential evidence across messaging platforms including Signal, WhatsApp, and Telegram. Under this scenario, placing Mullenweg on leave and instituting alternative leadership could have served to demonstrate board oversight to the court, potentially reducing legal penalties or aiding settlement negotiations.

A competing theory, which Mullenweg reportedly suspects, holds that the board attempted to temporarily gain operational control of Automattic to facilitate an undisclosed strategic transaction or corporate restructuring. Because the board provided no formal justification for its Sept. 9 vote, Mullenweg and outside observers were left to speculate about the directors' motivations. That lack of transparency, combined with Davies' prior equity sales and the rapid execution of executive exit deals, ultimately contributed to Mullenweg’s decision to aggressively reclaim his chief executive seat and purge the participating directors and officers.