Automattic’s CEO Matt Mullenweg was briefly placed on paid leave on September 9 by the company’s board in a move that was not publicly explained. Mullenweg accused CFO Mark Davies of conspiring with three board members to orchestrate the vote without warning him or allowing legal counsel review. After roughly 33 hours, Mullenweg resumed his role as CEO, and the board members who voted for his leave subsequently left the company.

During this short period when Mullenweg was on leave, Davies stepped in as interim CEO and, along with Chief Legal Officer Andy Missan, signed reciprocal severance agreements for each other. These contracts guarantee both executives a year’s salary, accelerated vesting of equity, the right to exercise stock options, and an additional year of health coverage if their separation meets specified conditions. The combined value of these severance packages totals approximately $8.15 million, which Automattic may owe following Mullenweg’s decision to remove Davies and Missan upon his return.

The severance agreements are notable in their detailed legal protections favoring the executives. “Cause” for termination is narrowly defined, requiring written notification, a period for remedial action, and board approval before severance can be denied. For Davies, the contract also specifies that stepping down from the interim CEO position without losing his CFO role does not count as a valid reason to resign and claim severance. Davies reportedly sold all his Automattic stock months prior but still held vested stock options at the time of his departure.

The situation hints at deeper tensions within Automattic’s leadership, possibly connected to ongoing legal issues such as a lawsuit involving hosting provider WP Engine. Some speculate the board’s actions were an attempt to manage corporate risk or facilitate a strategic transaction during Mullenweg’s absence, though Mullenweg denies being given an explanation for the board’s decision. Automattic’s legal team is currently determining how to handle the severance claims while the company continues to face internal upheaval and leadership changes.