Last week, the board of Automattic put CEO Matt Mullenweg on paid leave, sparking a leadership crisis. In the ensuing 33 hours, two key executives, CFO Mark Davies and Chief Legal Officer Andy Missan, signed each other’s generous exit agreements, totalling $8.15 million. These agreements, despite their questionable timing, are designed to protect the executives in case the intervention fails. The events could be seen as a response to an internal leadership crisis, or as a strategic move to create control, depending on one's perspective. The board’s silence on their decision adds to the intrigue.

Complicating matters, Davies had sold his stock just before his departure, while Missan retained significant vested options. Automattic’s legal battle with WP Engine, where Mullenweg was accused of destroying evidence, adds a layer of complexity. The company’s legal team is now grappling with whether to pay out these sums or challenge the agreements.

The agreements define 'cause' for termination narrowly, making it harder for the company to fire the executives. For Davies, the agreement also specifies that his interim CEO role won’t count as 'Good Reason' for severance, as long as he remains CFO. This suggests the document was drafted with his specific circumstances in mind.

While it is not necessarily improper that the executives signed each other’s agreements, in the context of this governance struggle, it is noteworthy. Automattic has been asked for comment, but responses have been unsuccessful. The outcome of this drama remains to be seen, with the company potentially facing a legal battle over these agreements.