Zynga CEO pressures some employees to give back some of their pre-IPO stock

[Paladin3]

Well, this is a slippery slope and a tricky one if people actually managed to read the article.

First off, they are asking for UNVESTED shares back. Vested shares are always owned by whomever they gave them to. Unvested means the employee must continue to work for X amount of time before they actually own those shares. Same thing a lot of companies do for 401K plans. The thing is, the company is finding that some of their employees with large amounts of unvested shares are actually not doing much. They are saying, "Hey you borderline suck as an employee, but we can still use you for now. But for us to keep you employeed here we want some of those unvested shares back."

It's not technically illegal, but definitely in the grey area of the law. They could by all rights fire that person for under performance and get back every single unvested share. No problems at all legally for them to do that. But they can't claim to be firing a person just to get back shares because they want them back. Again, slippery slope and grey area here.

Grey area my a$$! No judge and/or jury on the planet would believe these employees are being fired for any reason other than to save the company from paying out millions in stock options.

 

[HumblePie]

This is all true.

My employer granted me a bunch of shares as sort of a retention bonus and they don't fully vest for a few years. It drives me to continue to excel because I know that the company stands to save a lot more money if I give them a reason to let me go while simultaneously I stand to gain a great deal as long as I keep doing what I've been doing.

But if they came to me, as Zynga appears to be doing, and said "hey, we gave you more shares than we would have liked. Give us back 50% of those unvested shares or you're fired."

My response would be a profound middle finger. If I'm under performing, then fire me. If not, you promised me X number of stocks and I'm not letting you go back on that promise.

I would not give them the middle finger until I had carefully saved enough communication evidence that showed the true intentions of why they wanted my unvested shares back. Without proof it becomes your word versus theirs when they fire your ass. Guess who usually wins those cases? Still I probably won't be spiteful about it either because these are people you will have to work for still to complete the vestment which is usually going to be a few more years. They can make your life a living hell at work if they so chose to.

 

[HumblePie]

Grey area my a$$! No judge and/or jury on the planet would believe these employees are being fired for any reason other than to save the company from paying out millions in stock options.

Umm, without proof it is the word of the employee versus the company who probably has or can easy drum up more proof of employee incompetence as reasoning for firing. Also, it is much easier to get a judge or jury to sympathize over a federally protected statute, like racial discrimination when there is little proof of there being that, then something like this which has no precedent.

 

[thegimp03]

Nothing wrong with asking people to give up some options, but in the case where they're threatening to fire the person for not giving up the options, there's a lot of issues with that.

 

[Gooberlx2]

It's not technically illegal, but definitely in the grey area of the law. They could by all rights fire that person for under performance and get back every single unvested share. No problems at all legally for them to do that. But they can't claim to be firing a person just to get back shares because they want them back. Again, slippery slope and grey area here.

Indeed, and they're complete morons for having apparently made a list with these specific intentions. Hopefully it bites them in the ass.

 

[HumblePie]

Ahh, but here is the kicker. It is entirely legal to dock someone's pay for under performance. This is just another form of compensation which they feel is now too much for some under performers. As I said it's a huge grey area.

 

[Phokus]

Ahh, but here is the kicker. It is entirely legal to dock someone's pay for under performance. This is just another form of compensation which they feel is now too much for some under performers. As I said it's a huge grey area.

This sounds less to do about 'performance' than it does about business needs (hiring more executives and giving THEM some of the sweet honey) and the realization that the company is 'too profitable'. I guarantee you if they were only worth a fraction of what they are right now, they wouldn't ask them to give back the stock options.

 

[waggy]

Ahh, but here is the kicker. It is entirely legal to dock someone's pay for under performance. This is just another form of compensation which they feel is now too much for some under performers. As I said it's a huge grey area.

not the same at all.

Docking someones pay for not showing up on time or takeing to many sick days is fine.

Takeing back something of value that you gave someone to come work for you is wrong. I hope its also against the law and the company pays for it.

 

[Dulanic]

What a fucking scumbag. I knew zynga were scumbags for stealing others ip but man this takes the scumbag cake.

 

[Doppel]

$20B for a company that makes sh*ty games, fvcking insane world we live in. He should eat a D for this behavior. Who cares if there is a $20M cook? Good for him.

 

[jjzelinski]

Circulating this on Facebook with a "don't support this company" spin. If nothing else, perhaps theres a chance it can diminish the deluge of obnoxious "requests" games like farmville instigate.

 

[KeithP]

lol

It's amusing how conservatives, who value personal responsibility, fight so desperately to protect businesses that fight so desperately to avoid personal responsibility..

Did you just have a stroke?

-KeithP

 

[Dr. Detroit]

I'm guessing they have too many shares outstanding and a reverse split is looming.

More shares back in the pool - less of a reverse split and more cash in the employees pockets.

Assumption is the valuation is down from its peak.

 

[RavenSEAL]

I'd let him fire my ass, that a couple of million bucks right there. What a dick...

 

[freegeeks]

I think the owners statements are a reflection of the times, and that is only certain people are entitled to make money.

Take the chef at google, if he can make 200 million with stock options, good for him. Only the greedy would want to prevent that kind of stuff.

I could not agree more. This chef took a risk, just like the kick ass programmer, he deserves what he was promised. Doesn't matter if he's a chef or a janitor

I hate it when some a*hole looks down on blue collar work

 

[zinfamous]

lol

It's amusing how conservatives, who value personal responsibility, fight so desperately to protect businesses that fight so desperately to avoid personal responsibility.

Were I an employee there I would tell the CEO to kiss my dick. If they fired me I'd drive straight to an attorney's office.

Dems and Republicans are equally culpable in perpetuating the myth of "small business," which is what Zynga was.

 

[crashtestdummy]

The biggest problem with this is that these stock options are worth a ton now, but they weren't when they were handed out. When they were given, they were like a lottery ticket. These employees forgoed a higher salary to get these lottery tickets instead, and now the boss is saying they don't "deserve" them?

It's a dick move, but I'm not sure it's illegal. The options are contingent on them staying employed with the company, and Zynga can just say they fired their underperformers. I can also understand why all these people settle rather than fighting it. Would you take 5 million guaranteed, or a chance that you could either have 10M or nothing? I'd take the sure bet.

 

[freegeeks]

The biggest problem with this is that these stock options are worth a ton now, but they weren't when they were handed out. When they were given, they were like a lottery ticket. These employees forgoed a higher salary to get these lottery tickets instead, and now the boss is saying they don't "deserve" them?

It's a dick move, but I'm not sure it's illegal. The options are contingent on them staying employed with the company, and Zynga can just say they fired their underperformers. I can also understand why all these people settle rather than fighting it. Would you take 5 million guaranteed, or a chance that you could either have 10M or nothing? I'd take the sure bet.

It's still a dick move and shows what is so wrong with these "executive" types

the same type of guys destroyed the financial industry and the world economy and go home with a $50 million golden parachute

f*ck them

I have the utmost respect for the Bill gates, Larry Ellison and Google dudes of this world. They deserve their billions, but this is just a d*ck move

 

[Dari]

I believe there are numerous video interviews of this CEO talking about he'll cheat/steal, do whatever is necessary to get what he wants.

He did steal the Farmville idea from a Chinese company. A role-reversal of sorts for Chinese and Western firms.

 

[Fritzo]

Screw them! All of them should cash in and be fired. They'll be rich and the company will have no talent.

 

[Corporate Thug]

waiting for Zynga IPO to boost my GLUU holding.

 

[TakeNoPrisoners]

If the stock was worth enough I'd tell Zynga to fuck off.

 

[SamurAchzar]

Ahh, but here is the kicker. It is entirely legal to dock someone's pay for under performance. This is just another form of compensation which they feel is now too much for some under performers. As I said it's a huge grey area.

True, but the unvested stock options were given to the employees, with gradual/future vesting. The options themselves are not a future thing, the vesting is. He threatens they'll be fired to circumvent the vesting for the options they already own.

Unless these workers are actually rather good and he'd prefer to retain them, for the life of me I can't understand why didn't he just fire the option holders outright, instead requesting half back. It makes no sense, and creates an ugly legal situation. My feeling is that these people are actually useful and he wants to keep them around, just with less stock. What a fucking douche.

 

[Patranus]

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[Patranus]

It's amusing how conservatives, who value personal responsibility, fight so desperately to protect businesses that fight so desperately to avoid personal responsibility.

Mark Pincus is a Democrat.........
http://fundrace.huffingtonpost.com/...emp_or_occ&emp=zynga&search=Search+Workplaces