In a dramatic boardroom showdown reminiscent of OpenAI’s leadership crisis, Automattic’s board of directors attempted to oust founder and CEO Matt Mullenweg while he was away at Burning Man. The move temporarily elevated CFO Mark Davies to the CEO role, but the takeover collapsed in just 33 hours due to Mullenweg’s overwhelming control of the company’s voting stock.
The Attempted Coup and Underlying Tensions
The board’s decision stemmed from escalating tensions surrounding Mullenweg’s high-profile, damaging legal battle with WP Engine and private equity backer Silver Lake. Following allegations of destroyed evidence—including missing phones and deleted Signal messages—the board moved swiftly upon his return on September 9th, giving him only 50 minutes’ notice before voting him out. Board members, including Automattic’s former CEO Tony Schneider, voted to replace him with CFO Mark Davies.
How Founder Control Reversed the Decision
The board’s effort failed to account for Automattic’s governance structure: Mullenweg holds 84% of the company’s voting power. After taking to Slack, Reddit, and Twitter under an defiant “pirate” persona, Mullenweg used his controlling shares to dismiss the opposing board members and reinstate himself as CEO within 33 hours, demonstrating the absolute leverage supervoting shares grant a founder against traditional board oversight.
The Repercussions and Costly Fallout
Upon reclaiming control, Mullenweg fired CFO Mark Davies and Chief Legal Officer Andy Masaan. However, during their brief 33-hour tenure leading the company, the two executives had established golden-parachute severance agreements guaranteeing full salary, health benefits, and immediate stock vesting upon termination, leaving Automattic with an estimated $8 million payout. Meanwhile, Automattic employees were left in confusion with minimal formal communication about the sudden upheaval.
Mentoring question
How can an organization establish effective corporate governance and checks on leadership when a single founder controls the vast majority of voting power?
Source: https://youtube.com/watch?v=ylO0DQeVEBQ&is=kp5O51Wg3-8M6bmN