Automattic’s top deputies signed mutual severance pacts amid brief leadership shakeup

Automattic, the parent company of WordPress.com, put in place reciprocal severance arrangements for two of its most senior executives while CEO Matt Mullenweg was briefly on leave, according to a new report.

During that window, CFO Mark Davies stepped into the interim chief executive role. Under the arrangements, Davies and chief legal officer Andy Missan each signed the other’s severance agreement, a structure that guarantees a year of salary along with additional equity vesting if either executive’s departure qualifies for the benefits.

Reciprocal severance deals of this kind are relatively uncommon. More typically, change-in-control agreements are negotiated between a company and each executive individually, often at the time of hiring or a major corporate event. Having two sitting officers sign one another’s agreements has raised questions about internal governance at the privately held company, which has been through an unusually turbulent stretch.

Mullenweg, who founded Automattic and has led it for most of its two-decade history, was temporarily out of the top seat during the period when the agreements were executed. The report indicates his absence was brief, but the paperwork completed in the interim suggests executives were preparing for potential further instability at the top of the organization.

The dual provisions — twelve months of salary plus accelerated equity vesting — would provide meaningful financial protection to either officer in the event of a qualifying departure. Equity vesting accelerators are a standard feature of executive severance packages at technology companies, where a large share of compensation is typically delivered in equity rather than cash.

Automattic occupies a significant position in the web ecosystem through WordPress, which powers a substantial portion of websites worldwide, and the company’s governance has drawn outside attention amid recent disputes involving the broader WordPress open-source community and commercial ecosystem.

Neither the company nor the executives named have publicly detailed the circumstances that prompted the reciprocal structure, or whether either deal has been triggered since it was signed.

What to watch

• Whether either Davies or Missan departs Automattic and whether the severance terms are activated
• Any permanent leadership announcements from the company regarding the CEO role
• Further disclosure about governance changes adopted during Mullenweg’s temporary leave

Source: original release