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Zynga To Employees: Surrender Pre-IPO Shares Or You're Fired
ardmhacha writes "Zynga seem to think they were overly generous handing out stock to early employees. Fearing a 'Google Chef' situation they are leaning on some employees to hand back their unvested stock or face termination. From the article: 'Zynga's demand for the return of shares could expose the company to employment litigation—and, were the practice to catch on and spread, would erode a central pillar of Silicon Valley culture, in which start-ups with limited cash and a risk of failure dangle the possibility of stock riches in order to lure talent.'"
.... be fired and get rich (and maybe an employer that respects me), than to be forced to sell the valuable stocks that I personally contributed success to.
In truth, those with pre-IPO stocks are the foundation of the success for the company; what we are seeing is absolute disrespect to those who are responsible for the success.
I don't see how this is all that different from the way most large American corporations operate these days.
Fearing a Google Chef situation?
What... a competent professional working at the company over a long period of time demonstrating a high level of skill, overseeing, directing and training many others, and earning the respect of his colleagues?
Is this kind of thing bad now?
Coming from a company with stellar ethics like Zynga, what do you expect?
Unfortunately, these slimeballs are smart enough to figure out ways to screw their employees, their customers, and in fact anyone with a dollar in their pocket.
Too bad for the honest hard working startups that are prepared to do the hard yards and get their just rewards. This will definitely have ripples of distrust that permeate deeply.
Science advances one funeral at a time- Max Planck
You take them to court and as part of the settlement/compensation you get vesting of your unvested options because you cannot return to a hostile work environment.
Next thing you know, their employees would be asked to pay back portions of their salaries that management thought are undeserved.
I think demanding already paid compensation to be returned is very different from the way most American corporations operate. I've never heard of it before. It's mind boggling, and if I were said employee, I'd definitely quit on the spot.
I wouldn't. I'd tell my lawyer to prepare his largest vault and stand my ground. There are times when suing is the right course of action.
Then you're blind.
And if you interpret this as a defense or implicit approval of the behavior of most large American corporations, then you're deaf.
Distinguishing: A lost art of great value.
The enemies of Democracy are
He is doing the right thing. So let's not be quick in judging him. ok ?
Then he shouldn't have promised that to them. It's classic renege on a contract. Doesn't matter if they're parasitic executives or not.
Clearly not. The Mafia might be a criminal enterprise, but they have always understood that without your word, you're nothing.
Typically they just issue new shares and dilute current shares; while giving management and investors a number to keep their percentages the same. This is a far more insidious way to screw over the little guy that the old way.
So let's not be quick in judging him. ok ?
a quick googling of "zynga ethics" will allow you to make a quick judgement of what we're dealing with here. Pincus is setting new standards in rapacious business practices. This is nothing to shrug off, somehow this guy needs to be spanked.
look sig is kool
Have they gone public yet? If not, it strikes me that having outstanding legal suits against them would likely taint their public offering, to the extent that whoever is underwriting their IPO would force them (zynga) to clear up the matter. SInce time would not be on zynga's side, they would have to settle on favorable terms for the ex-employees. There would be a lot of attempts at intimidation, but any employee with the balls to avoid folding would come out OK.
FarmVille, etc. I already boycott based on lack of interest in the product.
Mod Parent up +5 Sad Truth.
just issue new shares and dilute current shares; while giving management and investors a number to keep their percentages the same.
Similarly, mark Zynga clueless for trying something so boneheaded when the parent's tried and true method accomplishes the same thing, but in a way that has been, sadly, accepted by the establishment for years.
"Son, in life or business, always remember, you dance with the person you brought".
This is a basic point of honor - you keep to the commitments you made.
More expensive than you thought it would be? Tough, honor it.
Harder than you thought? Tough, honor it.
See something else that's better? Tough, honor it.
Yes, I know, business isn't about honor, it's about profit. I simply feel there is no profit in being dishonorable, no matter how much money you can make. No Sir, "Greed is good" in not in my orison. You know the good companies in your life. Go look at their mission statement. Top one is "To serve our customers/community". You also know who the bad companies are. Look at their mission statements. The honest ones list "Increase shareholder value" as first. The dishonest ones say "To serve our customers/community". In the end, it isn't about what someone says, it's what they do. Actions don't lie. Words can.
That is why I will listen closely to what someone says, but I pay more attention to what they do.
In a perfect world, someone would whisper this in Sony's, RIAA's, MPAA's, ASCAP, AT&T's, and many others ears:
"Honor is a lasting value.
Try it.
For a change."
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
I wouldn't. I'd tell my lawyer to prepare his largest vault and stand my ground. There are times when suing is the right course of action.
There are times when *threatening to sue* is the proper course of action. There are fewer cases where filing a complaint (i.e. initializing a lawsuit) is a proper course of action. It is much, much rarer for suing and going to trial to be the proper course of action.
Lawsuits take years, cost major time and money--usually even if you win, though then it is a net gain--and the outcome is not assured. Settlement is usually (though not always) the rational choice, unless the other side is being irrational or is poorly advised.
-- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
There are times when *threatening to sue* is the proper course of action. There are fewer cases where filing a complaint (i.e. initializing a lawsuit) is a proper course of action. It is much, much rarer for suing and going to trial to be the proper course of action.
Probably don't "threaten to sue" in such a situation; get your lawyer to write some warning letters, first of all.
People casually threaten to sue all the time and aren't serious about it -- make sure they know you've done your homework and are serious about pursuing what course you need to best defend yourself from unjust treatment.
As a Sili Valley engineer, here is what I want to know: Who are the VC's and board members behind Zynga that told the CEO that this was a good idea? I want to avoid any company that those clowns are involved with. This is not how Silicon Valley works. Stock options are part of the compensation. At two companies I worked at, the stock options turned out to be worthless. That happens a lot. When the options turn out to be worth something, you darn well better let me keep them. If you don't do that, there is no way in hell that I will ever work at any company that any of those VC's or other financiers are involved with, fuck you very much. That is the Silicon Valley social contract. The clowns that did this need to be outed and ostracized.
They're cutting the deadwood. It will get ugly, but that's where the execs earn their lavish compensation. Anyone worth their stock will not be touched. This is the most depressed economy since the 1920s. I expect tactics like this to be the norm for at least a decade. What are 25 million unemployed going to do, strike?
Look at history. When this happens bloody revolution is the norm. I hate violence. So I'd hope you're wrong.
These posts express my own personal views, not those of my employer
Don't take a job based on shares. Just assume they're going to make them worthless in the long run. Yeah, it makes it harder to join a startup early on, but it's the funded startups you want to work for, anyway.
I'm not making this up! They seriously said this:
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.
Who in their right mind would trust their upper management to actually deliver?
"Hey! We lured in our initial staff with some stock options, but then we strongarmed it back from them once it looked like it might be worth something. They took the gamble and we got the payoff. Now we would like to offer it to you! No, really, honest - we wouldn't do that to you! Just the people we initially hired. Hey...wait...where are you going?"
Weaselmancer
rediculous.
Threatening to sue has all the weight of someone threatening to beat you up over the internet. People scream "I'M GOING TO SUE" for every single fucking thing nowadays. The proper action would be to retain legal council and make them aware of the situation immediately. They might write a warning letter, but this is much different than you, without representation, telling your company that you're going to sue them.
-1 disagree is not a modifier for a reason. -1 troll, flaimbait, redundant, overrated are NOT acceptable substitutes.
"Another one is where they sell or otherwise break up and restructure the company right before your options vest, making them worthless."
Negotiate that your options vest monthly. Forget waiting a year for vesting, or even six months. Things change too fast now.
I feel like I have hedged against getting too screwed by one simple method: making sure I get at least 90% of "my market value" in salary. Stock is a nice bonus when it works out, I worked at one place that did a "standard employee purchase plan" that worked very well for me, almost like a 15% bonus every 6 months. But, the high risk, "potentially very wealthy" deals have always turned to their most likely result in the end: zero value.
do I get to keep my stock options?
Because, honestly, that seems like the better option here. Not to mention the money I will recoup when I sue you for wrongful termination.
Management at companies like that need to do hard time. 20 years in prison would be nice. That's the only thing that will stop this.
Disclaimer: IANAL. This post is, however, legal advice, and creates an attorney-client relationship.
Getting revenge can be quite satisfying if your shares are going to be worthless no matter what you do anyway.
According to the article they want to take the stock options back so they can use them to attract new employees.
Surely the act of taking them back greatly reduces the attractiveness of any future options Zynga issues?
"People were actually quite civilized, often more so than today."
"A vigilante hanging of people that wouldn't conform to the norms of society was often performed during a Sunday picnic, so the children would have an up close and personal experience....."
How very civilized.
Yup, I guess that's why many European societies which have much tighter gun controls and lower levels of firearm ownership than the US are so much less polite.
Oh, wait...
Why doesn't the gene pool have a life guard?
Every time an article like this is posted on Slashdot, I keep wondering why the hell people don't organize.. It seems to me that American IT-workers are in sore need of a proper union. Behaviour like that would lead to a world of hurt for the company over here, yet Americans just lie down and take it like some kind of slaves.