Zynga Extorts Employees of their Stock Options

As reported by C|net on a Wall Street Journal article, Zynga, the company that made its fortune on viral games on Facebook has been compelling its employees to give up their pre-IPO stock options or risk being fired. There’s a word for that that has nothing to do with every day business. It is comforting to some CEOs who find themselves in difficult situations to justify their actions by claiming it is for the good of the company. But this isn’t the same thing as mandatory lay offs, or mandatory salary reductions to avoid lay offs in a time of crisis. Although nobody likes layoffs or salary reductions, there is hope there that those affected can either return or one day, get their salaries restored – that serves the good of the company.  Targeting employees for what was retroactively considered unjustified reward so you can reach your post-Thanksgiving IPO goals is like a visit from the Soprano family offering protection for your continued employment in a down economy. An IPO isn’t required for Zynga to stay in business. It could be they’ve grown impatient and feel compelled to act because they will miss their IPO milestone. That is just wanting something you don’t already have yet, like as of yet unrealized profits. Find another way, Mr Pincus. If the end result of this is that you get sued by these past and current employees and there is a public response that affects your IPO, it is your justified reward.

Leave a Reply