Everyone’s an Owner  ## Metadata - Author: [[Matt]] - Full Title: Everyone’s an Owner - Category: #articles - Document Note: --- tags: - #ownership - #automattic - #opensource Author: Matt Mullenweg Source: ma.tt Reference: [Everyone’s An Owner](https://ma.tt/2024/10/owner-mentality/) date created: 2024-10-12 21:00 --- # Title: Everyone’s An Owner ## Table of Contents: - [📝 Summary](#-summary) - [📖 Main Content](#-main-content) - [🗒️ Notes](#️-notes) - [📖 References](#-references) - [🗣️ Paraphrase](#-paraphrase) - [📰 Newsletter](#-newsletter) - [✅ Action Items](#-action-items) - [🧪 Hypotheses](#-hypotheses) - [📊 Methodology](#-methodology) - [❓ Questions](#-questions) - [🔮 Future Research](#-future-research) - [💡 Implications](#-implications) - [🧠 Learning Styles Assessment](#-learning-styles-assessment) - [📊 Accessibility Assessment](#-accessibility-assessment) - [🌍 DEIB Assessment](#-deib-diversity-equity-inclusion-and-belonging-assessment) - [✅ Logical Validity](#-logical-validity) - [🔍 SEO Evaluation](#-seo-evaluation) - [🎯 Conclusion](#-conclusion) ## 📝 Summary: The article discusses Automattic’s new ownership model designed to foster an "owner mentality" among employees. Employees are granted A12 stock with unique liquidity options, promoting transparency, equity, and engagement. Mullenweg outlines the company’s strategy of moving away from traditional options and highlights the flexibility of the program. ## 📖 Main Content: Automattic’s A12 stock plan offers predictable buy/sell windows and protections typically reserved for investors, such as a 1x liquidation preference. This shift promotes financial empowerment for employees while avoiding complexities with options, especially across multiple countries. Employees gain shares as part of their compensation, aligning interests and encouraging ownership thinking. ### 🗒️ Notes: - **A12 Stock Features**: - Quarterly buy windows; bi-annual selling opportunities. - Employees always sell at purchase price or higher. - No expiry; shares can be transferred to a trust. - No voting rights, but economic rights remain intact. - Initially capped at $25k/year, now up to $1M/year. - **Incentives**: All new hires receive 1 A12 share, reinforcing a culture of ownership from the start. - **Future Intentions**: The legal team may release documentation to help other companies implement similar programs. ## 📖 References: - Mullenweg, Matt. "[Everyone’s An Owner](https://ma.tt/2024/10/owner-mentality/)." ma.tt, October 12, 2024. ## 🗣️ Paraphrase: 1. **Original Insight**: Traditional stock options can complicate international employment. **Paraphrased**: Managing stock options globally can be cumbersome, so Automattic tailored A12 shares to simplify ownership. 2. **Original Insight**: Employees gain peace of mind with a 1x liquidation backstop. **Paraphrased**: A12 stock guarantees employees can sell shares without losses, thanks to a backstop mechanism. ## 📰 Newsletter: **Title**: Building Ownership with A12 at Automattic 🎉 In an effort to cultivate an "owner mentality," Automattic introduced A12 stock, providing employees with reliable liquidity and financial security. The program simplifies ownership by removing traditional option restrictions and offering predictable buy/sell windows. Want to learn more about this unique stock plan and other exciting Automattic developments? Dive into the latest at [ma.tt](https://ma.tt/2024/10/owner-mentality/). ## ✅ Action Items: This article aligns with your focus on open-source advocacy by promoting sustainable workforce engagement. Its emphasis on employee ownership can inform future community programs or funding initiatives for contributors. The initiative reflects transparency and inclusive financial planning—key themes relevant to OSPO management. Exploring how this model can inspire open-source governance structures may advance your advocacy efforts. ## 🧪 Hypotheses: - Hypothesis 1: Employee ownership increases long-term retention. - Hypothesis 2: Predictable liquidity boosts employee morale across distributed teams. ### 📊 Methodology: - **Data Collection**: Survey employee satisfaction pre-and post-A12 implementation. - **Research Design**: Mixed methods—quantitative analysis of retention rates and qualitative interviews. - **Analysis**: Compare metrics with companies using traditional options. ### ❓ Questions: - What are the potential risks of adopting this stock model in other companies? - Could this ownership model translate to open-source communities? ### 🔮 Future Research: - Explore how stock ownership models influence distributed team dynamics. - Investigate the impact of A12 stock on recruitment. ### 💡 Implications: Broader adoption of this model could inspire similar ownership programs within tech and open-source communities, fostering deeper engagement and financial stability. ### 🧠 Learning Styles Assessment: 1. **Visual Learners**: Add charts showing retention trends post-stock implementation. 2. **Aural Learners**: Include audio summaries of key benefits. 3. **Kinesthetic Learners**: Offer simulations of financial planning with A12. 4. **Logical Learners**: Provide a decision matrix comparing stock options vs. A12. 5. **Social Learners**: Create discussion prompts around ownership culture. ### 📊 Accessibility Assessment: - **Screen Reader**: Ensure the text structure follows semantic HTML for accessibility. - **Keyboard Navigation**: Optimize buy/sell flows for seamless interaction. - **Contrast and Readability**: Evaluate Automattic’s UI for high-contrast compliance. ### 🌍 DEIB (Diversity, Equity, Inclusion, and Belonging) Assessment: - **Inclusive Language**: The article avoids jargon, promoting clarity for non-native speakers. - **Representation**: Introduce case studies on how ownership models impact diverse cultures. ### ✅ Logical Validity: - **Sound Reasoning**: The program addresses typical stock option pitfalls, providing a well-grounded alternative. - **Potential Fallacy**: Optimism bias—assuming continued company success without addressing potential market risks. ### 🔍 SEO Evaluation: 1. **Keywords**: Ownership, employee stock, financial planning, A12. 2. **Meta Description**: Create a concise, keyword-rich meta description summarizing A12 stock benefits. 3. **Title Tag**: “Everyone’s An Owner – Automattic’s A12 Stock Program.” ## 🎯 Conclusion: Mullenweg’s A12 stock plan reflects Automattic’s innovative approach to employee engagement. This strategy could serve as a blueprint for other organizations seeking to promote ownership and inclusivity in distributed teams. The program not only enhances financial stability but aligns with broader goals of fostering transparency and sustainable growth. - Document Tags: [[automattic]] [[Matt Mullenweg]] - Summary: Last Friday we said goodbye to 159 colleagues as part of our alignment offer. It was a tough day, there are a lot of close relationships within Automattic, and goodbyes are always hard. On Monday,… - URL: https://ma.tt/2024/10/owner-mentality/ Last Friday we said goodbye to 159 colleagues as part of our [alignment offer](https://ma.tt/2024/10/alignment/). It was a tough day, there are a lot of close relationships within Automattic, and goodbyes are always hard. On Monday, I got to [be Oprah for a few minutes](https://www.youtube.com/watch?v=pviYWzu0dzk). We had scheduled a town hall for leaders around the company to speak to everyone, and our [Woo](https://woocommerce.com/) team had ~350 people in person at a meetup in Tulum. I had five minutes to talk, and over the weekend, I had been brainstorming with finance and HR for something nice we could do for everyone who stayed. We couldn’t give them all a six-month bonus, which would have cost ~$126M, but we did take how much we spent on severance for the 159 people, rounded up a bit, and granted everyone at Automattic 200 shares of A12 stock, so about a $12M bonus for the employees. What’s A12 stock? This is probably the first time you’re hearing about it, we haven’t had a chance to talk about this publicly much before. Usually, options or common stock in a private company is fairly illiquid, with rare opportunities to sell or lots of restrictions [like what Uber had](https://www.nytimes.com/2017/03/03/technology/uber-said-to-consider-changes-to-employee-stock-compensation.html); it’s not an efficient or predictable market. Options are “nice” because they can defer taxes, but you still have to exercise them, and they can go underwater. Also, as a fully distributed company, we have people in 91 countries, so security and tax laws around options make them not worth it in most places outside of the US. When thinking about a stock plan for Automatticians, we thought, our most sophisticated investors have nice protections like a 1x liquidation preference, what if we gave that to employees, too? So to summarize, A12 is a special class of stock available only to buy if you’re a current Automattician with these characteristics: * There are quarterly windows to buy. You have to hold for 1 year, but then there are twice-a-year windows to sell, which is very predictable. * Automattic maintains the internal market, and provides a backstop so you can always sell the shares at what you paid for them or more, like a 1x liquidation preference. * Current employees can buy, but former employees are eligible for every selling window, there’s no politics like can happen with tender offers. It’s reliable and predictable. * Unlike options, A12 stock never expires. Once you own it, you own it. * Initially we only allowed $25k/year of A12 to be purchased, but as our business has scaled we now allow up to $1M/yr of A12 stock to be purchased. (Remember, the company has to backstop the purchase price.) * A12 is just economic rights, it doesn’t have any voting rights. * A12 stock can be transferred to a trust. * The price is set by an external firm, just like our 409a. Because that process discounts us so much for being private, it’s a pretty good deal compared to what investors would pay for a share. * We’ve mostly moved away from options, which really only work for already wealthy, sophisticated hires. We pay very generous base salary (which banks love, makes it easier to get a mortgage) and then people can make a personal decision whether the characteristics of A12 fits with their financial planning alongside index funds, stocks, and bonds. We’ve been running this program since 2016. The main downside risk for A12 holders, which isn’t that different from common stock, is that we go out of business and can’t keep our commitments. But that’s true of any stock investment, and we have a pretty solid track record. We want everyone to have an owner mentality, so we’ve also now started granting 1 share of A12 stock to every new hire. Our legal team has their hands full right now with the [Silver Lake / WP Engine stuff](https://www.cnbc.com/2024/10/05/wordpress-ceo-matt-mullenweg-goes-nuclear-on-silver-lake-wp-engine-.html), but we’d like to open source our docs around this so other companies can offer the same thing easily, I’ll see if we can make time for that in the next few weeks. We also announced something else cool for employees on Monday around our Grand Meetup in 2025, but to know that secret you have to [work with us](https://automattic.com/work-with-us/). We are one of the most open companies, but we can’t publish everything! ☺️ [](https://ma.tt/2024/07/jim-simons-rip/), Everyone’s an Owner, Matt, 01ja1hzsw7zdv1c9btf63jfhwr.