Automattic executives secured mutual golden parachutes during CEO's short suspension
During the 33-hour period when Matt Mullenweg was placed on paid leave, Automattic's CFO Mark Davies and legal chief Andy Missan signed severance agreements for each other, entitling them to a year's salary, accelerated equity vesting, and extended health coverage. The combined value of these packages is $8.15 million, which the company now owes after Mullenweg fired both executives upon his return. Automattic's legal team is weighing whether to pay the sums or challenge the agreements' validity.
You would think a self serving action without a third party audit would lead to challenging the agreements validity since the main barrier to those agreements being sign may just have been Matt Mullenweg.
The board’s unexplained suspension of Mullenweg created a brief power vacuum, during which Davies and Missan—holding the top finance and legal roles—executed reciprocal severance pacts. These agreements were contingent on standard conditions like broad claim releases and post-employment restrictions, yet they defined “cause” so narrowly that termination without payout would be difficult. Notably, Davies’ pact included a clause preventing his removal as interim CEO from constituting “Good Reason” while he remained CFO, indicating the documents were tailored to his exact situation.
Separately, records show Davies held no Automattic stock at his departure, having reportedly sold it months earlier. The company has since replaced its outside counsel and deactivated its general counsel’s account. Automattic’s legal team now faces a binary choice: honor the $8.15 million obligation or litigate the agreements’ enforceability, a decision that will hinge on the board’s original vote and the executives’ conduct during that 33-hour window.
This episode could influence how boards and executives approach severance pacts during leadership crises, potentially setting a precedent for similar disputes in the tech sector. If Automattic pays, shareholders absorb the cost; if it challenges the agreements, prolonged legal uncertainty may follow. Employees and investors could see trust in governance erode, while broader industry practices around “golden parachutes” might face renewed scrutiny, prompting calls for clearer guardrails in executive contracts.