Automattic’s interim CEO and legal chief signed reciprocal severance deals during Mullenweg’s brief ouster

Last week Automattic’s board voted to place CEO Matt Mullenweg on paid leave on September 9; the board has not publicly explained the action. Mullenweg said in a company-wide message that he learned of the vote with about 50 minutes’ notice and accused CFO Mark Davies of conspiring with three board members. He returned to the CEO role roughly 33 hours later, and the three directors who voted for the leave have since left the company. During the brief interval while Mullenweg was on leave, two senior executives—Davies, who served as interim CEO during that time, and Chief Legal Officer Andy Missan—signed severance agreements for one another, effective September 10. The documents, reviewed by TechCrunch, grant each executive 12 months of base salary paid as a lump sum, accelerated vesting of equity, the ability to exercise vested stock options, and an additional year of health coverage, conditioned on signing a broad release and complying with confidentiality and non-solicitation obligations. Taken together, the accelerated equity and the year of salary would amount to about $8.15 million payable to the two executives, according to the severance paperwork, because Mullenweg fired them after returning. Automattic’s legal team is now deciding whether to pay those amounts or contest the agreements’ legal validity; the company replaced earlier outside counsel Gibson Dunn with Susman Godfrey attorneys Stephen Shackelford and Shawn J. Rabin, a move Automattic and Mullenweg announced jointly. The agreements also define the standard for "cause" narrowly and establish procedural requirements the company must meet to invoke it: written notice within 60 days of learning of the conduct, a 30-day cure period for curable conduct, and a majority board vote confirming cause. In Davies’ case, the contract specifies that his removal from the interim CEO role will not qualify as "Good Reason" for claiming severance so long as he remains CFO, a clause that appears tailored to his temporary elevation to interim CEO. The timing and recipients of the agreements have drawn attention because they were executed amid an apparent governance struggle. Additional context includes an ongoing legal dispute with hosting provider WP Engine—where WP Engine alleged in July that Mullenweg destroyed evidence in messaging apps—that could have motivated directors to act. Company records reviewed by TechCrunch also indicate Davies held no Automattic stock at his departure, though he retained a substantial number of vested options. Automattic faces a choice between honoring the contracts or litigating their enforceability as the situation unfolds.