Zynga tries to reclaim stock offered to employees
Citing industry sources, The Wall Street Journal reported today that Zynga CEO Mark Pincus, along with his top executives, decided last year as they were preparing for an initial public offering (IPO) that they had given out too much stock to employees. But rather than accept that reality, the executives reportedly tried a different tactic: demand employees give back not-yet-vested stock or face termination.
In order to determine which employees would be asked to give stock back, Pincus and his executives tried to pinpoint workers whose contributions to Zynga--in the execs' eyes--didn't necessarily justify the potential cash windfall they could receive when the company went public, the Journal claims. One Journal source said that Zynga executives were especially concerned with not creating a "Google chef" scenario.
Well, there is another company to never work for.
It is doubly contemptible when you realize just what is really going on here. Why would the executives care about the "Google chef" scenario? If they handed out too much stock and it would reduce the amount of money raised for the company by the IPO by 10%, it is also reducing the value of the executive stock options by 10%. Something tells me the second factor is actually more important then the first in their thinking.
Jay