Zynga CEO Denies Bullying Tactics Over Stock Options

Andy Chalk

One Flag, One Fleet, One Cat
Nov 12, 2002
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Zynga CEO Denies Bullying Tactics Over Stock Options


Zynga CEO Mark Pincus says reports that he's trying to bully employees into giving back stock options are nothing but "hearsay and innuendo."

Back in the early days of Zynga, before it became a casual gaming monster, employees were often given stock options in lieu of higher salaries that the company couldn't afford. It's a fairly common practice among start-ups and can be incredibly lucrative for employees who sign up early with companies that make it big. But Pincus developed "giver's remorse," according to the Wall Street Journal (via USA Today [http://www.usatoday.com/tech/news/story/2011-11-10/zynga-ipo-stock/51158068/1]) because some long-time employees ended up with more shares than newer hires even though they actually contributed less to the overall success of the company, and how he's trying to strong-arm them into giving those stock options back.

But in an internal memo obtained by Fortune [http://finance.fortune.cnn.com/2011/11/10/exclusive-mark-pincus-memo-to-zynga-employees/], Pincus denied that was the case and said the story paints the company in a "false and skewed light." The allegations are "disappointing but... expected as we move towards becoming a public company."

"We have nothing to hide in our past and present policies and I am proud of the ethical and fair way that we've built this company. As many of you have heard me say -- we're building a house that we want to live in," he wrote. "Being a meritocracy is one of our core values and it's on our walls. We believe that every employee deserves the same opportunity to lead. It's not about where or when you enter Zynga i'ts how far you can grow. This is what our culture of leveling up is all about and it's one of our coolest features."

It's not exactly a surprise to see a CEO defend his company against unflattering commentary, but in this case it appears that there's a real basis for it. In a follow-up article [http://finance.fortune.cnn.com/2011/11/10/zynga-stock-scandal/], Fortune Senior Editor Dan Primack explained that while the Wall Street Journal may have had its facts correct, its conclusions were off-base. Most stock option offerings at Zynga, like at most other companies, vest over a four-year period, he explained, and when an employee leaves a company for whatever reason, unvested options simply disappear.

But Pincus apparently doesn't like to fire people, even those who aren't living up to expectations. Instead, his preference is to move them elsewhere in the company where they will hopefully perform at a higher level and contribute more meaningfully. But because those positions are often lower on the food chain, Pincus wanted to reduce the number of unvested stock options held by these employees to reflect the change in status.

The company could have handled the situation better, Primack wrote, but ultimately it's not nearly as big a deal as it has been made out to be. "The CEO is well within his rights to simply fire an under-performing employee (and recover unvested options). In fact, that's what happens at most companies," Primack wrote. "The difference at Zynga is that Pincus seems intent on retaining talent, even if that talent either didn't live up to initial expectations or didn't adequately match up to the changing needs of a fast-growing company."

"What Zynga did may sound bad on newspaper," he added, "but is little more than morally-acceptable business as usual."

(photo [http://www.flickr.com/photos/zynga_games/4461171338/sizes/m/in/photostream/])


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Feb 13, 2008
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"We have nothing to hide in our past and present policies and I am proud of the ethical and fair way that we've built this company. As many of you have heard me say -- we're building a house that we want to live in," he(Mark Pinkus) wrote.
In a recent video uploaded by TechCrunch, Zynga CEO Mark Pincus reveals that he willingly scammed players of Facebook games to build his company. "I funded the company myself but I did every horrible thing in the book to, just to get revenues right away," says Pinkus. [http://www.escapistmagazine.com/news/view/96024-Zynga-CEO-Admits-to-Being-a-Scammer]


Bull. Fucking. Shit.
 

Frostbite3789

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Jul 12, 2010
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Around the time he described Zynga as ethical an fair, I think I may have coughed an organ up. I'm not sure how to cope with this.

Also, the only innuendo I know is sexual innuendo, so he wanted the stock options back, eh? *wink*
 

Something Amyss

Aswyng and Amyss
Dec 3, 2008
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Andy Chalk said:
"What Zynga did may sound bad on newspaper," he added, "but is little more than morally-acceptable business as usual."
Business has a different set of morals, so while this is sad, it's true.
 

Something Amyss

Aswyng and Amyss
Dec 3, 2008
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Frostbite3789 said:
Around the time he described Zynga as ethical an fair, I think I may have coughed an organ up. I'm not sure how to cope with this.

Also, the only innuendo I know is sexual innuendo, so he wanted the stock options back, eh? *wink*
"Hey baby, I hear it's a bull market."
 

Frostbite3789

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Jul 12, 2010
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Zachary Amaranth said:
Frostbite3789 said:
Around the time he described Zynga as ethical an fair, I think I may have coughed an organ up. I'm not sure how to cope with this.

Also, the only innuendo I know is sexual innuendo, so he wanted the stock options back, eh? *wink*
"Hey baby, I hear it's a bull market."
"I hear prices are on the...rise"
 

Smooth Operator

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Oct 5, 2010
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Well that is exactly what I would say in public too, then round up all the bastards who dare tell the truth and sue them for slander... what, it's just good business.
 
Feb 13, 2008
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DVS BSTrD said:
Well... He's not hiding it.
Ethical and fair? There's 22 separate updates on the multiple scams they have been running.

A typical scam: users are offered in game currency in exchange for filling out an IQ survey. Four simple questions are asked. The answers are irrelevant. When the user gets to the last question they are told their results will be text messaged to them. They are asked to enter in their mobile phone number, and are texted a pin code to enter on the quiz. Once they?ve done that, they?ve just subscribed to a $9.99/month subscription. Tatto Media is the company at the very end of the line on most mobile scams, and they flow it up through Offerpal, SuperRewards and others to the game developers.



As you can see in the image, nothing in the offer says that the user will be billed $10/month forever for a useless service.
Ethical and fair? My hairy ass.
 

KeyMaster45

Gone Gonzo
Jun 16, 2008
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I am proud of the ethical and fair way that we've built this company.

Next I bet he's going to tell us that he's not at all a Warcraft goblin in disguise. I mean look at that face, he's clearly a member of the Steamwheedle Cartel.