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Automattic has a new board after failed attempt to put CEO on leave

68 pointsby 3h agotechcrunch.com
64 comments
3h agoHN ↗

1. Wow his profile picture is so extremely fluorescent

2. I guess I should move my blog off Wordpress

3h agoHN ↗

It's an HDR image, I think.[0] At the moment, only some browsers show it as brighter—Firefox on macOS, for example, doesn't support HDR images and I had to open the page in Safari to see it for myself.

[0] see, for example, this submission from the front page a month ago: https://news.ycombinator.com/item?id=49402521.

2h agoHN ↗

It's an 8-bit PNG of a magenta patch (with a dash of white), but the ICC profile is set to Rec.2020 PQ. So I think the high 255 values of 8-bit magenta/white will get mapped to very top of the PQ curve, which is like 10,000 nits (or whatever brightness your display can muster)

3h agoHN ↗

It says he has 84% of the voting shares. Is there any possible way that the board could have been successful? Regardless of Mullenberg, (and I know he's controversial) a coup that is pre-ordained to fail seems like value destroying negligence.

3h agoHN ↗

They could have known they wouldn't succeed but they could have decided their fiduciary duty requires them to either try or resign.

3h agoHN ↗

Didn't they craft themselves a nice golden parachute if fired? Then proceeded to kick off events that would guarantee their dismissal?

That's less fiduciary duty and more hacking a payday.

2h agoHN ↗

Getting out of a toxic job while failing up. Business can be strange sometimes.

2h agoHN ↗

That's less fiduciary duty and more hacking a payday.

A large golden parachute for firing a board member could be a disincentive mechanism to do it: a 'poison pill' of a kind.

* https://en.wikipedia.org/wiki/Shareholder_rights_plan

They could have felt they were doing the right thing, and making a public statement of the situation, but knew it was a bit of a kamikaze tactic and so made it more painful for when the eventual backlash occurs.

2h agoHN ↗

Regardless of intent, if true (haven't verified myself) it seems like a hell of a perverse incentive.

3h agoHN ↗

Yeah the minority share holders can’t sue them for not trying to do their job even if it lead to them getting fired. (They could have quit too)

If they truly believe the CEO was destroying the company/its value.

2h agoHN ↗

Deleware law [1] says

Special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.

California law specifically allows for a meeting called by stockholders with 10% of the vote, but for Deleware, a large holder would need authorization in the bylaws. If there was no such provision, a board could plausibly control the company until the next annual meeting, or until court action. Annual meetings can be delayed a bit, but any stockholder can force one once they're a little late.

If you were concerned about the judgement of the CEO/majority holder, and you were optimistic that it was a temporary issue, it might make sense to remove said person for as long as possible; be it a few months or a day and a half.

[1] https://law.justia.com/codes/delaware/title-8/chapter-1/subc...

3h agoHN ↗

How does a CEO pull off resisting an ouster and firing the board?

3h agoHN ↗

By personally owning 84% of the voting shares. This coup was doomed to fail from the start.

2h agoHN ↗

Being on the board is a Sisyphean effort based on the weighted voting setup. Some seem to be slower to realize this. At that point, they could quit and walk away with nothing, or as others have suggested, this could have been done deliberately to at least get a payday on the way out.

3h agoHN ↗

Apparently corporate structure gave him power over the board. Historically this kind of structure was considered undesirable and illegal in a public company, but beginning in the 2000s there was this idea that "visionary founders" should be able to demand absolute control, ex: Zuckerberg

3h agoHN ↗

The same way Mark Zuckerburg does - he maintains majority control.

3h agoHN ↗

Fireship pointed out that the board members gave themselves a generous severance package in the very brief interim, so that was very possibly the whole plan.

2h agoHN ↗

Yeah, if Mullenweg really did control a majority of the voting shares, the previous board are the villains in this story no matter what you think of Mullenweg.

2h agoHN ↗

If they can see that Mullenweg has lost it completely and beyond their ability to influence, and they also know that he’s a tyrant who would happily screw them, this seems like a fairly rational exit.

Obviously that may not be the case, but when the captain is steering the ship into rocks over and over the crew is going to take what they can and hit the lifeboats.

Ed sp

2h agoHN ↗

No, if the board doesn't believe it can continue to serve the company and meet its fiduciary duty, its obligation is to resign. CEO is an operational role; the board by design is not. It's a very big deal to "fire" the CEO, and doing so when you don't actually have the voting authority to follow through seems pretty close to malfeasance.

2h agoHN ↗

I mean it sounds like “board which does not actually have the legal ability to fire the CEO” is a fundamentally defective concept and shouldn’t be allowed to exist in the first place. But once it does and you are in that situation, I think you are obligated to make the best attempt you can at your nominal duties. I have no idea where you’re getting “malfeasance” from at this attempt.

1h agoHN ↗

Wordpress is a private company. This is a normal private-company structure.

I'm not suggesting the board actually did anything legally risky here. The standards for that in Delaware are high. But morally, it's much harder to defend, so long as they knew this is what the outcome would be --- which it seems like they kind of clearly did.

50m agoHN ↗

Moral dimensions are an interesting topic, but moral actions come first and foremost from environments that promote group morality. I’d argue that Mullenweg has spent a lot of time and effort undermining that. Besides in the world of big business if the lawyers are consulted and give the high sign the moral dimension is often superficial, performative, or absent.

2h agoHN ↗

What were they supposed to do? If you’ve been following Mullenweg’s behavior, he’s clearly unstable, and while this is admittedly armchair diagnosis, a lot of his recent writing gives me strong stimulant psychosis vibes. Granted maybe you shouldn’t take a job as a board member at a company where the CEO has 83% of voting shares to begin with, but once you’re there, you still have a fiduciary duty to do what’s best for the company, so IMO they were obligated to at least try and eject him.

1h agoHN ↗

Alternatively, Matt can resign if he doesn't like what his bosses did. Instead he chose to vote out his bosses: also an apparently legal option, albeit one much worse for the company's fiscal situation.

Indeed, Matt has a fiscal responsibility to resign from the company and stfu. He's dragging it down for all the investors, of which he is only one, and doing it purely for personal glory. That is unethical.

Boards vote themselves pay packages all the time. It was unwise for Matt to agree to pay it out by firing them for reasons purely personal to Matt.

Matt, since we know you are reading this: Do what is best for the company, not yourself: go away.

1h agoHN ↗

All you're really saying here is that you wish Mullenweg had lost this power struggle. I get that. I'm not sticking up for Mullenweg. But the adults in the room all knew that Mullenweg wasn't going to lose, and created chaos anyways. You can't pin that on Mullenweg.

11m agoHN ↗

Alternatively, Matt can resign if he doesn't like what his bosses did

The board members weren't "his bosses", he's "the boss" and the board serves as his pleasure, within the limits of the Delaware statutes with regards to the protection of minority shareholders.

36m agoHN ↗

Definitely not award themselves very generous severance packages, that sounds fishy as hell regardless of any other factors.

10m agoHN ↗

If the packages are generous enough, it would create an incentive not to fire them, and, that way, be actually in the best interest of the company.

If the CEO is indeed insane and incapable of fulfilling his duties, and he still controls 84% of the voting shares, all options are nuclear.

2h agoHN ↗

Alternative theory - the board and new CEO understood their actions had high risk of termination and needed compensation for that risk.

2h agoHN ↗

Bizzare self dealing.

Vote out dude who has 84% shareholder control.

Immediately sign yourself a golden parachute deal for 8 million right before getting fired the next day.

Seems like complete breach of fiduciary duty.

2h agoHN ↗

A breach of fiduciary duty" describes Matt's behavior through all his escapades here. Minority shareholder rights are a thing, it just seems there are no minority shareholders willing enough to deal with Matt's nonsense to fight for it.

If there is any litigation, it opens Matt up to liability for the same thing. Unfortunately, as we've seen, Matt is willing to self-destruct himself and the company if it would effect sufficient self-glorification for him.

1h agoHN ↗

Minority shareholder rights do not generally include a right to remove officers of the company unilaterally.

11m agoHN ↗

If anything the breach of fiduciary duty for those severance packages would not be Matt alone, if the board was the one voting for it.

Matt is willing to self-destruct himself and the company if it would effect sufficient self-glorification for him.

I've worked for at least one boss with control issues and/or delusions of grandeur, and I will say that, well, if he's at the top, it's his choice for better or worse.

3h agoHN ↗

I'm surprised anyone still uses wordpress after this whole sh!tshow, but outside HN folks probably don't even know. Just reading about it about it puts me off from the product and company.

2h agoHN ↗

What makes it hard, these days?

I did plenty of WP back in the day and I agree, historically, but each of the strong answers I had in my mind (db integration, editor, plugins, themes) are weakened substantially by the AI agents' ability to port a working site to a new framework. I totally agree for normal users still but for devs taking jobs on this do you think the barriers to switching have come down in size?

2h agoHN ↗

its getting buy-in, especially from people entrenched in their workflows, convincing management and sometimes legal depending on what plugins are being used.

2h agoHN ↗

It certainly is. But I won't be recommending it for new projects. Imagine how bad that would make you look.

2h agoHN ↗

For a lot of projects it wouldn't make you look bad at all.

2h agoHN ↗

Yeah, I'm left-swiping anything that involves working on it, outside of maybe being interested in helping people migrate to anything else. I don't know enough PHP to maintain one anyway, don't like what little of the language I do have exposure to, and want nothing to do with this toxic ecosystem.

2h agoHN ↗

If I had to stop using all the software whose politics I find problematic I would have to earn a living breaking rocks.

2h agoHN ↗

Deciding to not use Wordpress isn’t that hard though

2h agoHN ↗

I have an amateur website up and running where club members can book an accomodation.

Most other software wants more than the $100 one time payment that some random WordPress plugin demanded (VikBooking.)

2h agoHN ↗

...and when your site is hacked, will it have been worth it?

"Some random WordPress plugin" is usually the main entry point. The core has a bad track record, but plugins are worse by far.

1h agoHN ↗

So what if it's hacked? Those people's data has probably already been leaked multiple times via huge breaches in Fortune 500 companies and government websites.

You just patch and redeploy.

56m agoHN ↗

Since security isn’t a concern, why not use $100 in AI tokens to build your own solution? Could then market it as a replacement to VikBooking and sell it yourself to other amateur clubs.

5m agoHN ↗

Because the problem is more complicated than that.

I'll give the example case from my real life.

My wife and one of my best friends want to start a blog. My wife has some wordpress experience from her last job.

There isn't a big expectation for revenue, this is a hobby project.

At least when I did my 'shopping', a managed wordpress instance as far as cost, was somewhere between 'as cheap as just doing self-maintained custom solution hosted' and 'a little bit more but the extra 3-10$ a month versus my time to actually maintain it' stopped me dead in my tracks of Vibe coding an alternative.

IOW, the 'long tail' of wordpress, is the ecosystem of managed providers that exist where the user (at least as long as they are careful about plugins?) doesn't have to worry about updating the core bits, the provider takes care of that for them and can do it at a volume that makes it palatable.

2h agoHN ↗

A lot of people use Wordpress for multi-user or business sites and there isn't a replacement that will meet their needs that also doesn't require a higher degree of technical knowledge than they have. Any alternative more complex than Wordpress's install or that doesn't have feature parity with Wordpress' plugins is going to be a no-go for most of them.

2h agoHN ↗

I don’t think that’s been true for 10 years or more.

2h agoHN ↗

WooCommerce.

Unless you want and can go with Shopify and go all in on their platform, WooCommerce is what you need to host an online store on hosting of your own choosing. Alternatives seem to lack the numbers to tackle issues when something goes wrong without too much downtime.

(WooCommerce being a popular WordPress plugin.)

2h agoHN ↗

I still have one project running on Wordpress.

It was also the worst absolute time to pull these stunts. Between static site generators, LLMs, and the open internet dying - he couldn't have picked a worse time to do his massive mask reveal power play. Wordpress was on the precipice of irrelevance and he gave it a massive shove.

17m agoHN ↗

Any “tech” person would already have left Wordpress a decade ago, even before all the drama. It’s a slow, bloated, bug ridden, insecure mess.

The company is being kept alive by 1. People who Google “how to set up an online blog/store” and click the first link and 2. Those who are already in too deep and don’t want to make the effort to migrate.

2h agoHN ↗

Wordpress does not seem long for this world. How much of the Wordpress ecosystem is pure wasted resources, trying to be accommodating for all possibilities? As people see how easy Claude or Codex makes it to get off flat price Wordpress hosting and on to usage based platforms like Vercel, Wordpress usage will fade out. Feels like bloatware has no place in they coming world of AI customized software builds.

2h agoHN ↗

Most of the organizations/departments running wordpress aren't interested in customized software builds and all of the infrastructure that requires. They want something they can pay a simple monthly fee for, and host it with a company that deals with security, backup, etc.

2h agoHN ↗

So many people in this thread completely misunderstand what WP is being used for and by who. Most users simply have no idea that Automattic exists and probably wouldn’t care if they knew what’s going on.

WP users want a mature, easy to use framework, with lots of plugins, and a tutorial that can show you how to get anything done. Wordpress is the piece of software that kind of defines that genre. The fact that every host offers a Wordpress package seals the deal.

2h agoHN ↗

Add to that predictable flat pricing. If most Wordpress sites became famous overnight I guarantee 90% of users would rather the site go down than figure out what to do with 15 minutes of fame and a 50k hosting bill

1h agoHN ↗

OTOH I'd gladly pay $50k in hosting if I'd just made $250k in sales overnight.

1h agoHN ↗

If they had 5x margins and a scalable business plan they wouldnt be on wordpress