> It seems like the larger problem is he maintains access of keys and systems as opposed to the board and can boot out anyone not loyal to him ( or any other admin who could remove him).
So what happens when the courts get involved?
Because "he won, because he was the only one with the passwords," seems like a software engineer fantasy.
It's a true power struggle. As a software engineer I have actually fallen into the trap of thinking that because of the law or a contract something would happen. It is a softer power than I expected.
The board wants to make money, that's why they hold shares and positions. If Mullenweg has the power to destroy value, that will be powerful leverage over them. If his employees side with him, if he holds the accounts, they'll have to negotiate carefully.
Of course, you would need a lawyer to determine when this crosses from a civil dispute to a criminal dispute because at some point him using the keys when he's not authorized could be a crime and if they can get the cops involved that certainly changes the dynamic.
I think there’s a few big differences between OpenAI and Automattic:
On the “good for the board” side:
1. OpenAI from the POV of investors has both a pretty high p(massive returns) and a pretty high p(no returns). Even if they’re convinced AI is going to swallow the economy, that doesn’t mean OpenAI wins that. This discourages risky moves.
2. The range in outcomes from a Matt-less Automattic are much less varied than for OpenAI. Replacing him isn’t going to sink the company but it’s also not going to have a massive increase in valuation. It’s purely a decision that he’s a risk factor with his behaviour.
3. I’m sure there’s many good staff members in Automattic, but the work they do is pretty standard and understood, so there’s fewer irreplaceable individuals if any of them quit in support of Matt.
4. Because OpenAI is relatively new and has had such high growth, there were both a lot of true believers among the staff that it had to be Altman, and people who had a significant portion of their net worth locked into yet untradable shares that did not want the boat rocked.
5. What openAI hopes to achieve in marketing and policy requires a figurehead and only Altman had mass recognition. Matt’s public awareness is much lower and Automattic’s need for a public facing figurehead is lower.
In the pro-Matt factors:
1. Altman did not have an outright majority of the shares, Matt does
2. He did somewhat prepare by doing waves of voluntary severance to get his internal opponents to leave
Though somewhat of a digression I'd just like to jump in so the world doesn't forget that OpenAI was not a company with a valuation at all, it was a charity for the public benefit and is now in private hands, having been basically stolen by any reasonable definition of the word.
You’re not wrong, but I think the alternative future is sama loses control, goes and raises a quick $100M, and hires all the profit-motivated staff to make something that looks like today’s OpenAI.
Dario already showed there was an appetite for this.
Right. Much like the alternative future is that someone considering stealing a public museum could instead build a building, hire away the staff, and fill it with art he acquired, instead of just stealing a museum that was created via charitable donations.
Late reply, but I think once you took away the profit motivated people and the money man, the “museum” would have been exactly that - a collection of antiquated artifacts. But I guess we’ll never know.
I’m not saying it was right or moral, just probably inevitable.
it seems like he likely can't just fire all the board members, as some seats may be contractually required to be held by his investors, as part of funding agreements
That depends on the bylaws and specific contractual director-designation rights they may or may not have. Ianal but if he really controls 84% of shareholder votes like he claimed, he should be able to alter the board composition legally. Probably enough to get him unfired
A big part in both stories is that the boards were unwilling to actually state what exactly the CEO did wrong or why they have lost confidence - be that professionalism or not wanting to deliver ammunition for lawfare - which perfectly sets up the CEO to position himself as a victim to the greed and power games of the shadowy board
> A big part in both stories is that the boards were unwilling to actually state what exactly the CEO did wrong or why they have lost confidence - be that professionalism or not wanting to deliver ammunition for lawfare - which perfectly sets up the CEO to position himself as a victim to the greed and power games of the shadowy board
Which is really insane when you think about it. The CEO reports to the board, and since when have companies regularly provided real reasons for termination (I understand they try to say as little as possible, because there's no upside for them)?
It's a coup when an underling "fires" his boss and takes control, but some CEOs managed to convince many that it's the opposite (or at least AstroTurf to that effect).
There are companies where the CEO reports to the board, and there are companies where the board exists to keep up appearances. We’re finding out in real time Automattic is the second kind.
This should discourage investors, since an unbridled CEO is bad for them in the long term. But it won’t, because nobody thinks long term anymore.
> Wu retains control of the Chinese unit via his possession of the company stamp which is necessary in China to authorize important bureaucratic procedures.
Something I find weird is that modern seals are mass-produced. There is no identification value, because anyone can trivially buy a seal that will make the exact impression of your seal.
(For personal seals. I don't know what company seals involve.)
The base is mass produced; and you are conflating 'vanity' stamps available as souvenirs with the registered official seals for banking and formal business. Anyone can trivially buy a stamp matching all the other toy stamps for that name, but are not official.
Official seals use uncommon font styles and are hand carved natural materials, such that each one has a unique microfeatures inherent to the wood, stone, or horn used, which develop unique wear and ink absorption characteristics.
These official seals are registered and become official for specific scopes of use; some are solely for banking and separate from the other uses like contracts and official filings: which prevents corporate partners and official channels from potentially exposing the banking seals.
The vanity type seals can be used for informal things like putting your name on homework or stamping a package delivery receipt for items of trivial value such as Amazon basics, but it is illegal to use mass produced stamps for official legal or banking.
At least in the Japanese context that I'm more familiar with, there's also levels to seals: you have (possibly mass produced) lower-value seals for low-value signatures, but you also have high value seals where an exact imprint is recorded with the government for high value signature verification, and physical possession of which is very carefully guarded.
I mean it's basically identical to a signature in terms of identification value, and, by the sounds of it, usage.
The only difference is that demonstrated in the described case, that the stamp is expected to be passed on to whomever is in authority, whereas we would never say "This CEO can't be ousted as he refused to relinquish his signature."
> I mean it's basically identical to a signature in terms of identification value, and, by the sounds of it, usage.I mean it's basically identical to a signature in terms of identification value, and, by the sounds of it, usage.
Usage, sure. It's a lot worse in terms of identification value; signatures can be forged, but signing seals look identical to each other by design. Nobody is going to produce an exact replica of your signature by accident, but with seals that's routine.
Or, in the words of my friend, 橡皮章的大小，字体都一样的 [rubber seals' size and font are all the same].
(I had asked her whether she had a seal herself. She confirmed that she has one, and sent me an image very similar to this: https://img1.baidu.com/it/u=3145542370,421755251&fm=253&fmt=... . But she noted that Chinese personal seals are more likely to be square than round.)
Probably better than a signature for the high end fancy ones given that mine never looks the same from one to the next, a stamp made of natural material is going to be more self-similar across impressions than my signature or most peoples I'd imagine.
Not to mention the god awful "sign here" on delivery tablets, I just make a random squiggle because it never works properly.
Up until recently (and my intervention) my work had multiple aws accounts tied to individual people, where they had inherited a personal account into the billing org.
There are also, in business use, some domains where an executive personally owns the registration but has delegated DNS into the company. There is no written agreement.
A former employer completely lost access to a couple of social media accounts (twitter/$company, etc) after laying off enough people.
That reminds me of the San Fco "network administrator" who would not provide the passwords to anyone in city gov't and brought things down to a standstill. Eventually he capitulated and provided the governor the passwords to their networks. Some people!
In absence of a good enforcement mechanism, it absolutely does apply. Is Slack going to strip Mullenweg of admin control in absence of court order, as long as the Slack bills are paid? It would set a terrible precedent for them to do so unilaterally. Whatever the legal process this battle follows, it will be a year or two before it's even possible for a final ruling + court order for the handover of Slack admin control to happen. That's de facto Slack control for at least a year or two.
If employees can be persuaded to move themselves + systems to a board controlled chat instance, that's an angle, but Mullenweg has stronger cards if he's liked by employees.
If the board can show they fired him and he's now accessing their systems without authorization, I don't think it's a civil matter, and criminal courts might move faster.
> It would set a terrible precedent for them to do so unilaterally.
Speaking generally (not about Automattic), big SaaS have law enforcement desks that work on exactly this type of thing, and the "terrible precedent" is already widely set. Plenty of law enforcement outreach (which includes lawyers, courts, and actual law enforcement officials) results in pre-emptive compliance by SaaS companies. I would be massively surprised if Slack has not already done this in many cases, because most huge companies routinely do.
That's neither generally good nor generally bad; whether it's the right move depends on the charge, requested actions by law enforcement, status of legal proceedings, and the values/diligence by which the SaaS business assesses the legitimacy and likely cost/benefit of a law enforcement request. Note that "pre-emptive compliance" doesn't always mean an email saying "hey, the FBI said you suck so we terminated your account". There's a broad spectrum of tools available to a SaaS ranging from sending that email, to holding bespoke contract re-negotiations (which are functionally always in process between a SaaS and a huge customer) hostage to endless redlining rounds, to enforcing ToS violations that the SaaS previously turned a blind eye towards due to customer size.
> Whatever the legal process this battle follows, it will be a year or two before it's even possible for a final ruling + court order
Preliminary injunctions can be issued in days to weeks, not months to years, in all sorts of civil and criminal cases in all sorts of jurisdictions. Those can take the form of "don't change stuff with your admin access" or "grant admin control to someone else"-type orders. In cases where a service administrator is materially involved, injunctions are also easy to get on the basis of evidence preservation.
That's a pretty sharp tool. Failure to comply with those opens individuals and businesses up to way more legal penalties and tighter timeframes. Even if an injunction is later vacated/dismissed/modified, the legal argument that you violated it because you knew that would happen is an extremely tough sell.
If he really did this, he's going to prison, but not for a few years. Defrauding shareholders is one of the worst things you can do, because it attacks the system directly.
... literally all of the SPAC mania was about circumventing regulation and defrauding shareholders in public markets. All of the SPACs are worth a fraction of what they were at listing. I don't see anyone being prosecuted.
Edit: I take that back, [1] this guy got prison time. Do Chamath next.
So what happens when the courts get involved?
Because "he won, because he was the only one with the passwords," seems like a software engineer fantasy.