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Bobby Kotick Still Insanely Grateful At Continued Existence And Business Practices Of Mark Pincus

In case earlier stories about the Facebook game maker didn’t turn Mark Pincus into enough of a moustache-twirling villain from a silent movie, this Wall Street Journal story should finish the job adeptly.

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.

Or on the other hand, maybe Pincus was doing his guys a solid by, uh, taking away their options.

But this isn’t Major League Baseball, where the Boston Red Sox are stuck paying Carl Crawford $20 million per year even if he proves no better than a backup. It’s a non-unionized startup, where 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. 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.

Yeah, I don’t think so.

 

  • Carson Wilson

    Is that even legal? I mean, if it’s a benefit I can see it being removed (i.e. discontinuing service) but it’s a tangible “thing” that they gave – how can the blackmail (give it to us of you’re fire!) it out of you?

    Wouldn’t it be akin to – pay us back, in cash, the raise we gave you last year or you’re fired.

    The mind boggles.

  • Polynices

    Let’s see, lose my stock options and have to keep working for these assholes OR keep the options and don’t have to put up with them any longer? Wow, tough choice! I’m thinking Pincus was doing those folks a favor.

    [EDIT: Oh, duh, right, should have figured that one out, thanks Xaldin]

  • Xaldin

    Ah no actually they’d lose the options anyways. They targeted those who weren’t vested yet. So essentially it was “lose that benefit and be employed or lose that benefit and be unemployed”. Really asshole move honestly. I’d certainly have gotten a lawyer the minute that started. Sad part is in America there’s a good chance they’d win the lawsuit eventually as workers really don’t have many rights if they aren’t in a union.

  • Greg Walters

    This is how you get unions. Because this is why we can’t have nice things.

    • Malkyne

      Greg, it ain’t gonna happen.

      For us to have unions, the senior programmers would have to lead the charge, since they’re in the positions that are hardest to fill.

      However, when you piss off your senior programmers, they just walk.  There are plenty of programming jobs, and they can always make more money somewhere else (especially outside of the game industry).

      In the end, everybody pays the price for the evil companies, because we end up with an unrelenting, industry-wide senior programmer shortage.

      • Greg Walters

        Except that eventually abuses get bad enough that the goons unionize and the ‘talent’ agents up – which is essentially the same thing. Proactive negotiation tactics which hedge against abuses.

        It’ll take awhile and it’ll take the ‘star’ programmers being screwed en masse with little recourse but it’ll eventually happen as long as our Galtian overlords continue to obsessively continue with the Guilded Age playbook. Gotta keep those Parasites in check don’t cha know.

    • Some Dumbass

      Michigan and foreign auto makers: this is how UAW and other unions break things. By forcing companies to subsidize the costs of retired (no longer giving input into the system) labor. Angry diatribe!

      Sometimes unions work, often times they run into a wall in terms of execution… because the person buying their services in whatever manner will simply use non-unionized services instead. Newsflash: non-unionized labor tends to be cheaper when buying shit. No labor rights also tends to be cheaper, so it happens. Over here in the states, it is a question of how many rights does banking and corporatism have (a fuckton), and how many rights do labor have (nothing much.)

      Having more labor rights is always a plus (if done right, and if you are a game developer), but having unions carry the workload of labor rights bargaining in classic AFL-CIO/UAW fashion is not so nice. Because it costs both workers and employers in the end. Unionizing can be a really Dumbass thing to do, sometimes.

  • Naladini

    Its interesting, because if you offer up suggestions about how maybe, just maybe, a few folks are taking in just a bit too much income (see #OccupyWallStreet), you can be written off as un-american, against the rags-to-riches tale of our great history.

    However, if the executive management team of an organization takes income suppression steps against rank and file employees, its apparently ok, because people working specific jobs should have specific ranges of income. Somehow, its fair to deprive those who may surpass that range. (Unless they’re at the very top of the chain.)

    The moral of the story, at least the one I read: Lawyer up, and you’ve got a chance to keep the job and some of the options.  Anything else, and you lose it all.

    I hate to see that as the moral of the story.

  • Factory

      “Ah no actually they’d lose the options anyways.”
    Don’t know how it works in the US, but for my stock options they are held by a third party until they vest. The company doesn’t have any legal way to revoke them.

    • Xaldin

      Yeah that would be the fair way to do it. Which is to say it isn’t how its done in startups in America. 

      I had something similar to this happen to me actually. I went to work for a startup but it took a year before my stock options vested, meaning until their vestment if I left for any reason I had nothing. Well they laid me off after 8 months (along with about 70% of the company and the VP I reported to). But this meant I lost all my options along with it. Well essentially I made them pay me what worked out to a month’s salary for them (obviously company didn’t have lot of money or was doing well so more was squeezing blood from a rock) but if they survive and get bought or go public one day I am probably out at least 50-100k from what I’d guess the options would be valued at given their market situation.

  • A Man In Black

    That’s vile.

  • Andrew Eather

    Disgusting. Totally Disgusting… but expected from these asshats.

  • Vetarnias

    Stock options, aren’t they the modern equivalent of paying your employees in company scrip?

  • Bob L

    What an excellent way to demotivate their staff. And all over stuff that’s basically funny money anyway.

    • Some Dumbass

      Let’s see… how much is Zynga worth on the markets right now, in generic terms? Probably a good god damn bit. One will know for certain when their IPO sells. Is their company’s current worth to the market the result of a bubble? Likely, but not guaranteed.  Will going public fuck their shit up even more? Also likely. Is the bubble due to pop? Not any time soon.

  • Management should never over promise, that just shows they don’t have judgement. 
    Right now the programming jobs are real easy to find, so all the guys should just find a new one and quit.  Or even better, form a new company (after the non-compete period) and compete with their former bosses.  This is the age of internet, the entry cost is rather low.

  • Sinij

    Aren’t ‘non-compete’ clauses lose most of their power when you are fired? 

    • Jess Mulligan

      It depends on the state you live/work in.  For example, in California, most non-competes are worthless; courts tend to side with the worker.  But it is a toss-up; you pays your lawyer and takes your chances.

      At one company I worked for, the non-compete specifically noted that, for the company to enforce it, they had to pay me half my salary at the time I left the company for the non-compete period.  Apparently, that made it legal in that state.

      • Xaldin

        Most states now require that for a non compete to be considered enforceable they have to provide marked value to the worker, not just threat of non hire or termination for failure to sign (like my current company tried). 

        Fact interesting note, in some states if you’re already hired and they want a non compete (and from state point of view you’re hired if an offer letter is presented prior to the non compete requirements being disclosed so if you have an offer letter and are filling out paperwork as new hire and they spring the ‘oh and about this non compete’ you can not sign it and they can’t touch you) they cannot resend the offer or fire you for not signing. For it to be enforced after you leave they have to provide a payment considered equitable to the duration, and cannot threaten to withhold any due money (expense reports, vacation paid out etc) during the discussion if it had not been prior worked out.

        For bonus points, if you’re requested to sign a non compete and refuse, in some states if you are given a bad performance review for that year and fired it is considered retaliation in default. So they have to put up with you at least over a year and document LOTs of failure to perform to avoid being hit with the claim that they were retaliating for being unwilling to sign the non compete. So if you know your state’s laws very well you can pretty much wrap your employer up in so much hassle over a non compete that it really isn’t worth the pain except for very top management.

  • Well, one thing’s for certain. Next time Zynga are recruiting, offering stock options isn’t going to work nearly as well in attracting talent…

  • Guest

    Hey Scott, maybe Zynga’s HR director reads your site:
    In
    meetings, according to people familiar with them, Ms. McCreary referred
    to certain people seen as too highly compensated for their contributions
    as “broken toys.” Zynga didn’t make Ms. McCreary available for comment.
    From: http://online.wsj.com/article/SB10001424052970204621904577018373223480802.html#ixzz1djoSaF83

  • Vetarnias

    @abb249055208c7af4d35568e422dfd63:disqus
    I remember that Pincus once commented here on a previous story, so it’s not impossible, regardless of whether Ms. McGreedy herself reads this.

  • Boanerges

    The reason software companies don’t organize, generally, is that, unlike, say, auto makers, software engineering has very little overhead. Add in that unions create overhead (as in you and your bosses are basically paying a middle man to resolve your disputes) and that most software companies aren’t very large and I’m willing to bet most unions won’t touch them.

    The best revenge here is for all the Zynga employees to quit and form their own company (call it Agnyz, just to rub it in) and do their own games. Non-competes are typically limited in scope so you could start your own games brand fairly easily and not run afoul of them.

  • Vetarnias

    As for revenge, here’s one guy who tried. It didn’t go so well:

    http://www.escapistmagazine.com/news/view/114251-Temp-Steals-100k-of-Stuff-from-Zynga