Zynga (ZNGA) Rues Granting Some Stock Options
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Zynga (Nasdaq: ZNGA) may have convinced executives and other top-level employees to forgo high salaries in favor of stock and stock options, but the company might now be regretting the decision.
According to reports Thursday, Zynga CEO Mark Pincus is looking to re-acquire some stock rights issued in the early days of Zynga. The WSJ notes the shares, should Zynga meet market expectations upon launch, will be worth some $20 billion.
Fallout for Zynga might be twofold: 1) it would face almost certain employment litigation, and 2) it will scare off talent from joining other Silicon Valley start-ups, which typically use stock options in favor of cash and salaries to lure top talent.
Considering a situation at Google (Nasdaq: GOOG) in which a cook found his stock worth about $20 million following the IPO, Zynga is looking to balance out payments for those who contributed more in the later stages rather than early on.
But Pincus could at least be a little more sensitive about it. According to one source, Pincus told an early hire -- this is back in early 2010 -- that he had too many uninvested shares and he had to return them or else he'd be fired... and ended up with nothing.
Jeez, at least take the guy out to lunch first, Mark.
Of all the employees granted stock options, only a small portion have been asked to return some shares. For example, Zynga's Chief Tech Officer, Cadir Lee, was kept off the list as Pincus determined he had earned his award.
Since its so rare that an employer would ask for stock grants back, it hasn't really been tested out in court, meaning Zynga might be able to escape much of the litigation associated with a typical employment lawsuit... or it might face more...
According to reports Thursday, Zynga CEO Mark Pincus is looking to re-acquire some stock rights issued in the early days of Zynga. The WSJ notes the shares, should Zynga meet market expectations upon launch, will be worth some $20 billion.
Fallout for Zynga might be twofold: 1) it would face almost certain employment litigation, and 2) it will scare off talent from joining other Silicon Valley start-ups, which typically use stock options in favor of cash and salaries to lure top talent.
Considering a situation at Google (Nasdaq: GOOG) in which a cook found his stock worth about $20 million following the IPO, Zynga is looking to balance out payments for those who contributed more in the later stages rather than early on.
But Pincus could at least be a little more sensitive about it. According to one source, Pincus told an early hire -- this is back in early 2010 -- that he had too many uninvested shares and he had to return them or else he'd be fired... and ended up with nothing.
Jeez, at least take the guy out to lunch first, Mark.
Of all the employees granted stock options, only a small portion have been asked to return some shares. For example, Zynga's Chief Tech Officer, Cadir Lee, was kept off the list as Pincus determined he had earned his award.
Since its so rare that an employer would ask for stock grants back, it hasn't really been tested out in court, meaning Zynga might be able to escape much of the litigation associated with a typical employment lawsuit... or it might face more...
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