Drewbot • Zynga Asks Employees to Give Back Stock

Zynga Asks Employees to Give Back Stock

CNET reports. Add this to reasons to run away from your current employer:

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.

Keep in mind, this stock was offered because pay at a startup like Zynga is often below market. To an employee, Pincus’ clawback is the equivalent of an employer asking for part of your last year’s salary back because the company needs the cash. Oh, and they’re justifying the penalty by blaming your past performance. And no, they say, this spotlight on your poor work in the past has nothing to do with our IPO plans or dwindling hard cash. Nothing at all.

My favorite part of the story, though, is this bit:

Although Zynga’s decision might be met with some criticism, the firm’s executives reportedly justified their strategy by saying it was best for the company. With the unvested shares, the executives believed they could attract more top talent with the promise of stock.

Heh. I’d be more surprised, but this Ponzi-esque model is essentially what Farmville does with Facebook advertising so it’s pretty par for the course.