Zynga stock options: give some of them back or get fired and lose them all
Zynga, creators of Facebook games FarmVille and CityVille, are taking a cue from their MafiaWars games and strong-arming some employees to give back stock options or be fired and lose them all.
Could Don Corleone do it better? Entice talent with dreams of the big payoff, ride their 80 hour work weeks to success, then kick them to the curb if they don't give up half the options you promised them. And employees can only be given options, they can't somehow take them, so the executives who now claim employees don't deserve their options have to take much of the blame.
In California, employees work "at will" and can be fired at any time for any reason. When fired, your un-vested options go back to the company. If Zynga CEO Mark Pincus had fired the employees he considers under-performing before the big IPO push started, no one could say a thing. But seeing dollar signs in your eyes for a potential $20 Billion IPO, then kicking people to the curb, makes for some horrendous publicity.
The employees of Zynga should stand up to this bullying and theft. Any terminations that occur due to vesting are unethical and immoral. They should strike and demand the board of directors, as their proxies, hold management accountable to honor the equity rights already in place. This is a despicable, underhanded maneuver.
Matthew Nelson on wsj.com
I'd argue that the "down sizing" of options though is something that should be done when the role is downsized, not months/years later when the CEO is having buyer's remorse. That's, I suspect, what feels slimy to people. Especially if the demotion is politically motivated, which happens a lot at the executive level.
melindybyerley on cnn.com
I wonder if the market will consider Zynga's IPO less valuable because of this executive decision and the bad publicity. That would hurt the employees a second time.