Zynga CEO wants workers to give back stock

[garbon]

http://news.yahoo.com/report-zynga-ceo-wants-workers-back-stock-155029401.html

Zynga CEO Mark Pincus is pushing some of the online game company's early employees to give back stock they own ahead of the company's initial public offering of stock, according to a published report Thursday.

The Wall Street Journal said that Pincus, who gave out stock freely to keep top talent early on, developed "giver's remorse."

That's because some of the early employees didn't contribute as much to the company as those hired later. But because they got in early, they got more shares.

Zynga's games include "FarmVille," ''Zynga Poker" and "CityVille" and are mostly played on Facebook. The company has filed for an IPO but has not yet said how much it plans to raise. Zynga is among several technology companies that either had IPOs recently or are planning to soon. Groupon Inc. had its IPO last week, and Facebook is likely to have one next year.

Getting into a hot startup early on and reaping the rewards after a sale or IPO is a big part of Silicon Valley culture. The promise of a big payout is what gets a lot of people working long hours with little compensation early in a startup's life.

But the Journal said Pincus wanted people to keep contributing to the company even when it got big rather than just "rest and vest" — that is, wait to cash in.

The Journal cited unnamed people with knowledge of the matter. Reached by The Associated Press, Zynga declined to comment because it is in a federally mandated quiet period ahead of its IPO, which is expected this year. The company, which is based in San Francisco, has about 3,000 employees.

Lynne C. Hermle, a Silicon Valley employment lawyer who does not represent Zynga, said the practice happens at other companies, too.

"I have not seen it publicized but it does happen," she said, citing attorney-client privilege for not naming the companies. "Sometimes it's a negotiation and sometimes it's a fight."

Whether Zynga could get into legal trouble over the issue could depend on whether the stock options it wants back are vested or unvested. The Journal said that in Zynga's case, demands to return stock only applied to shares that have not yet vested. If an employee leaves a company before stock options vest, they lose it. Vested shares, meanwhile, have a fixed value and can be sold.

Hermle, partner at the San Francisco law firm Orrick, Herrington & Sutcliffe LLP, said there "aren't any legal implications with respect to unvested options."

"Certainly nothing that prevents an employer from saying to an executive 'you are making much too much money, accept a lower amount or we'll have to let you go,'" she said.

[Admiral Yi]

Hermle, partner at the San Francisco law firm Orrick, Herrington & Sutcliffe LLP, said there "aren't any legal implications with respect to unvested options."

"Certainly nothing that prevents an employer from saying to an executive 'you are making much too much money, accept a lower amount or we'll have to let you go,'" she said.

[/quote]

That's pretty greasy.

[Razgovory]

I thought you would approve, Yi.

[Admiral Yi]

I thought you would approve, Yi.

I thought you would post something retarded, Raz.

[Razgovory]

If they pay the workers less, don't you get whatever product they sell for cheaper?  It's it good for you, the consumer?

[Admiral Yi]

If they pay the workers less, don't you get whatever product they sell for cheaper?  It's it good for you, the consumer?

It's it good for me, the consumer, in the short run.  In the long run it's it not good for the labor market in Silicon Valley, which as the article states is built on good faith promises of deferred compensation.

[Razgovory]

If they pay the workers less, don't you get whatever product they sell for cheaper?  It's it good for you, the consumer?

It's it good for me, the consumer, in the short run.  In the long run it's it not good for the labor market in Silicon Valley, which as the article states is built on good faith promises of deferred compensation.

Do you have a problem with cutting salaries for union members or pensions of government employees?

[Admiral Yi]

Do you have a problem with cutting salaries for union members or pensions of government employees?

I have problems with cutting pensions of retired government employees.  I have very little problem with cutting salaries or future pensions of anyone, as long as it's not a breach of contract.

[Razgovory]

What about pensions for Union members?

[Admiral Yi]

What about pensions for Union members?

Same as the above.

[Razgovory]

What about pensions for Union members?

Same as the above.

What about some sort of deferred compensation for the two above groups?

[Admiral Yi]

What about some sort of deferred compensation for the two above groups?

I think it's wrong to offer *anyone* deferred compensation contingent on continued employment and then threaten to fire them, voiding the deferred compensation, if they don't give it up.

[Razgovory]

Okay, you're off the hook.  For now.

[DGuller]

Yi actually make sense in this thread.  

[Camerus]

Does "constructive dismissal" exist in the US?