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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.'"
Is the mafia running this company or something?
.... 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.
Wow, let that be a lesson to anyone taking the promise
of stock and options when a company is willing to "give
just about anything" to succeed.
-AI
For me, it is far better to grasp the Universe as it really is than to persist in delusion
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
I can't imagine how an action like this can be legal in terms of anyone wanting to take it to court - surely the employee would win hands down, but I can't also see how it would be beneficial in the long run. Srely if you took your employer to court like this (and assuming you won) and went back to work - surely the culture there after that must be very antagonistic. Wouldn't the employer then be looking for any excuse and going through all the hoops to have that person leave the company anyhow.
The only way I can imagine to pursue this would be to take them to court, win (I assume quite easily) and then start looking for another job as the workplace has become hostile - which sort of leads to where they are going in the first place... "Give it back or you are fired" OR "Ha, I won, now I need to find other work...". It just seems to be a half dozen here and six there.
Moved to http://soylentnews.org/. You are invited to join us too!
Why not simply water down the stocks like they did with Facebook's Chief "Financial" Officer?
Were they really upset about that guy? Sounded like he did top-notch work from the Wikipedia references.
PocketPermissions Android Permission Guide
Next thing you know, their employees would be asked to pay back portions of their salaries that management thought are undeserved.
They're going to make some of their employees very disgruntled. Their company depends on keeping a bunch of servers running. Am I the only one who sees the potential reliability problem here?
-- Support a free market in the field of government
Given that it is Zynga the employer may hire you based on that fact that you did sue them.
Fight Spammers!
From TFA, the small minority of employees asked to return the stocks are executives, not engineers, architects or the creative folk.... Most executives don't deserve what they get paid in USA. Most of them just lunch off of the productivity and manipulate for their personal gain. There's a term for that in the nature. It is called a parasite.
He is doing the right thing. So let's not be quick in judging him. ok ?
Totally true, they have a very strange history, from their funding coming from the Russian mafia, to the events of today.
The place itself is supposedly a real grid to work in, so it is likely all these employees deserve their options. However, management always holds the power in situations like this, and more importantly, the investors that control management. If they are indeed controlled by the Russian mafia, isn't it better that these programmers give up their stock options rather than lose fingers?
... that you keep the stock they gave you ... because it's yours damn it.
If you are fired because of it ... a 2 step process kicks in:
1. You put your personal belongings ( which looks like a set of backup tapes ) in a box and walk out holding your head high and ...
2. You hire Gloria Alred and claim the CEO sexually abused you. During the discovery part of the court preceedings, instruct the Zynga attorneys to enter their credit card number to receive a .pdf version of the paperwork they requested.
It's a win-win-win-win.
If they gave it it is no longer theirs. Those shares belong to the employers
Microsoft, for example, just made the granted options worthless for many years.
Help stamp out iliturcy.
Agreed, f*ck Zynga. Boycott, anyone?
what do they do again?
It pays to be obvious, especially if you have a reputation for being subtle.
FarmVille, etc. I already boycott based on lack of interest in the product.
just wait for the dude in the parking garage and break his legs with a tire iron while screaming, "Here's your f'ing shares, you bastid!"
I have been
Live life to the fullest, you only get one chance at it.
Having been through this very scenario, you'd all be wise to go back and read your stock option grants very carefully because odds are very good that the fine print says that the company can 'buy' any unvested options back for the strike price, meaning you don't get squat. At a certain advertising company (that I'm perfectly happy to name - fastclick, taken over by valueclick), the acquiring company turned around and revoked the unvested options of every non-executive employee at the acquired company. They turned that around and offered a much less lucrative deal to anyone that stayed, then promptly drove the company into the ground - or should I say, continued the process of driving the company into the ground.
IMO, the kind of people who would do something like this tend to be in the process of making their own bed. This'll come back to haunt Zynga, one way or another. The whole point of offering equity is because early employees are taking a huge risk, precisely because the potential upside is large. To have the efforts of those employees drive the value of the company up to the point that the company then turns around and says that their equity grant is now too large is just so much bullshit. Back when those shares were next to worthless and the early employees were putting in the long hours to make something from nothing, would the CEO have been so comfortable coming to those employees and telling them that they were only worth some fraction of what they had previously been offered? I highly doubt it.
Sadly, this kind of attitude has become increasingly pervasive in this industry over the last decade. The startup culture developed because employees felt a real sense of ownership of what they built, in large part because they were actually rewarded for their efforts. With the rise of companies financed almost from day one by aggressive venture capitalists, that ethic has disappeared. Now, it is all about VC's preserving as much of the value for themselves as they think they can get away with, at the expense of the folks doing the actual work.
I am starting to think that Corporate America is completely lawless! I read the referencing article which used the phrase "givers remorse" I would say that as an employee if I forwent any cash salary in exchange for shares or options then it was a payment and not a gift. I would think just the threat of "surrender your hard earned options and shares or get fired" would have to be illegal, I wouldn't think they would even have to fire anyone just threaten. Surely there is a government body in the US that can and should step in here?
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?
what a disgusting company
I hope this gets Zynga sued into oblivion. I always despised that skeevy company and am offended that they've become so large by peddling garbage games via Facebook. Simply clicking on one of their icons feels like the digital equivalent of sticking your dick in broken glass covered in hot sauce.
-Billco, Fnarg.com
http://finance.fortune.cnn.com/2011/11/10/zynga-stock-scandal/
That place sure doesn't sound like anywhere I'd want to work, let alone keep any money in their stock.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
"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.
It's EXECUTIVES who awarded each other obscene levels of options. These options would DILUTE the shares that deserving rank-and-file employees should have. The CEO is playing hardball and threatening to toss the execs who pulled this.
"...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."
Do they really think they will be able to attract top talent with the promise of holding on to some stock for awhile, but having it taken back before they can actually sell it? I seriously doubt any future employees will want even one UNvested share of stock.
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.'"
I think what will happen is Employees will use this case as an example to negotiate better terms. For example... automatic full vesting of all grants/options, if the employee is fired for any reason not on a short list and verified by an independent third party auditor.
Most of the articles/commenters have used very imprecise language about the nature of what Zynga is asking their employees to give up.
When you join a tech startup you are granted the option to buy some number of shares of the company's stock at a certain price (which, when you join very early, is incredibly low compared to what it will be when the company is sold/goes public). To prevent people from taking the job for a day, buying all their shares, and leaving, the options become available ("vest") on a schedule such that you are able to buy some additional percentage of your shares every additional month you work there. Additionally, in most agreements, your options stop vesting (obviously) but also evaporate within a few months after you leave a company (so you can buy the vested shares or just get nothing).
Note that they're still just options until you actually exercise them (buy them for the low option price).
It sounds like the Zynga employees are being asked to forfeit unvested shares - not only have the employees not yet paid to own these shares, they haven't even worked at the company long enough for those shares to be available for purchase (that's what an unvested share is). This is not like Zynga taking money or any other assets from their employees - they're just modifying an agreement that's part of their compensation. It's most closely equivalent to having been promised an incredibly large bonus in the future and then them telling you that you'll be fired if you don't agree to accept a lesser bonus.
It's strange that they're threatening people with their jobs here considering that there are probably much less dramatic ways to accomplish this same thing. For one thing, most stock option agreements are granted at the board's pleasure - if the board wants to cut you off at any time, they can. In that sense, there's nothing illegal (I am not a lawyer) about reducing the number of shares in someone's option agreement.
Don't get me wrong - this is a dick move that's congruent with Zynga's less-than-stellar history of ethics. As someone who works for a tech startup, I'm scared that something similar would happen to me/lucky that I work for good natured people.
If you quit, you can't collect unemployment. If you refuse, then they have to decide to fire you ... and either way, you've still go the shares.
Also, this could be interpreted as constructive dismissal, in which case you can tear up that non-compete you signed, since they have broken the terms first.
I believe the proper reply would be to simply refer them to the reply given in Arkell v Presserdram.
'The tyrant will always find pretext for his tyranny.' - Aesop's Fables
I've been boycotting for two years, where've you been?
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.
fired.
Also space out at the desk for most of the day.
Zinga will still attract talent, but the contracts will have thicker prose about termination and vesting conditions, so it will be much harder to pull this stunt a second time. But perhaps at this stage of growth they are beyond that.
I watched Politics, Strategy, and Game Theory last night, which talks about Grim Trigger and the conditions under which, in iterated prisoner's dilemma, you care more about the future than defecting in the present moment.
It's a competent lecture with no great pizzazz.
Here's a fairly nice piece by an undergraduate I stumbled upon brushing up on Grim Trigger: Debunking the Prisoner(slashcode fuckup)s Dilemma on Robert Axelrod(slashcode fuckup)s Emergence of Cooperation among Egoists and why cooperation is a lot more common than the shallow analysis would have you believe.
I really wonder what payoff matrix he constructed to author that blog under no fixed identity. I found a Tweet referencing the site by the apparent author with one or two clues about his circumstance.
The punishment for Zynga in future iterations are employment contracts with a lot less room to wiggle if they screw up future hires. The reward in the present iteration is yanking back a substantial chunk of the entire company.
If the quiet vestors really aren't showing up and pulling their weight, it doesn't seem great to let them get away with that either. I don't think Zynga's presumption is that they can't fight this, but more like "the effort involved will be a shock to their lazy asses" so they are likely to settle without going ten rounds.
Too bad for the honest hard working startups that are prepared to do the hard yards and get their just rewards.
Hmmph, at least somebody in the tech industry is working to prevent future bubbles by discouraging rampant startups and the idiots who invest money in them.
Zynga are the heroes of the ninety-nine percent.
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.
Well, I don't "boycott" them, but don't use them on FB.. But the free iPhone games can be fun (I only play one regularly).. They even *VAGUELY* nag me to buy the non-free one, but it's basically at a "continue" button I would press anyway. (I mean, I think they SORT of add another step in finishing my turn than absolutely necessary, but the game at least _seems_ to be talking to the server at that point anyway..)
I got mod points. I didn't even realize it for days. I thought that little badge/medal thingy was just a new piece of design by Slashdot. Had no clue why it was there.
In British English, the proper conjugation is to treat companies and other organizations as plural. A google search for the submitter, ardmhacha, gives results which are all related to Ireland. Thus he was writing correctly.
The only people your Farmville crops are feeding are the employees at Zynga
Coder's Stone: The programming language quick ref for iPad
I think it is, the star thing is showing up for me, but I have no mod points. It seems to just be an interface to bring up the "top 10" lists.
<xml><I><am><so><damn>Web 2.0</damn></so></am></I></xml>
I once got a job offer several years ago that included stock options, because the salary was below market. The catch was the offer merely said "stock options" and gave no terms whatsoever. WTF! That's like saying they would give me a salary compensation without saying how much. I explained to the recruiter that was trying to hire me that I had to interpret the options part of the offer as "1 share per year, vested in 10 years". He said it would be a lot more than that. I asked him how much more. But he only said that they were still working out the details with the lawyers. So I declined the offer. They later went out of business, so I guess they must have had trouble doing a lot of things right.
If you get an offer with stock options, you need to know exactly what the terms are. And technically, you should understand the risks, including the risk of the company going under. And to do that properly you need to look at the business plan and financials. You almost certainly won't get to see the latter unless the offer is for CFO or CEO. If you're sure the company will succeed, then you at least need to know the terms to know how much you could get out of it, and the risks they will cheat you.
now we need to go OSS in diesel cars
If the discovery in the lawsuit would require information they are supposed to be quiet about for the IPO, that would suspend the IPO.
now we need to go OSS in diesel cars
Up until 2006 or so, I used to get mod points regularly, every week.
Then suddenly I stopped getting mod points. That was about 5 YEARS ago.
*Nothing* for 5 YEARS.
Then, suddenly, yesterday, I got some again.
What the hell kind of algorithm can lead to a 5 YEAR hiatus in mod point allocation?
seriously? that seems wrong. (also, wrong to keep it.)
look sig is kool
Won't work because you'll never get the females to agree and that is their bread and butter. I have literally had females come in and have their machine built around how well it would run that Zynga crap. Farmville, Mafia Wars, Frontierville, they eat that crap up. It used to drive me nuts when my now ex GF would stay the weekend with me that at 7:AM on the dot she'd play her hour of Farmville. That was as much a part of her morning routine as my morning caffeine and she wasn't happy unless she got it so I kept a spare desktop in the corner just for her so I wouldn't hear the clicking when I was trying to sleep.
As for TFA "Scummy company treats employees like shit and tries to fuck them over" news at 11 and here is Cathy with the weather "Water is wet Bill, back to you".
ACs don't waste your time replying, your posts are never seen by me.
Don't think of it as being cheated. Consider it an accidental charitable gift to the B&M-G Foundation.
Third way, while we're at it: stock buybacks to buy stocks at the same rate the Chairman sells stocks and then stock grants to him to give them back. It's like magic money transfers, only legal. Like a dividend, but to only one stockholder and paid over and over in compensation for a decade of calling in four times a year to say "hey Steve! You're doing GRrrrrEAT!"
Help stamp out iliturcy.
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.
You're right. It's actually spelled 'cunt'.
-- I ignore anonymous replies to my comments and postings.
Zynga has product that people can walk away with in the blink of an eye. After spending how many hours clicking mindlessly on games that do not materially change no matter how long you click on them, you are just a couple of days away from breaking the habit and moving on to the next click fest, or better yet, opening a book and reading something that actually is not brain numbing. Or doing gaming that is actually fun. Games are entertainment, Zynga games aren't entertaining, they depend solely on the addictive nature of the click-reward, it is a real force to be sure, but ultimately the little mini click fest games fail for lack of actual entertainment value.
I had a friend who went to work for IBM in sales, he was tearing it up, making big bucks. They upped his quota retroactively, he had to pay back part of his commissions. Can't have the new kid making more than his boss.
Never let a lack of data get in the way of a good rant.
Just goes to show you shouldn't have bet the farm on Zynga stock
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?
There's a star thing?!
Just when you make it idiotproof, some idiot builds a better idiot.
For every time I was ripped off in a business venture, I'd fill a sock and use it.
Recall when practically everyone was demanding that bank executives give back their bonuses?
This is exactly why I was against forcing them to cancel bonuses that they were due by contract, because I wouldn't want it happening in my industry.
I do think those found to have commited fraud, etc. should be jail/fined, but invalidating legal contracts is a very bad thing for government to do. Basically, it's Bankruptcy.
Reading your post I suddenly noticed that I too have mod points. It's been like 5 years here too. Hm.
It is no longer uncommon to be uncommon.
I've got mod points almost always. I barely use them.
I don't metamoderate, rarely sip from the firehose, yet I often get new modpoints just when my old batch runs out.
Zynga are the heroes of the ninety-nine percent.
No, not really. Zynga is the hero of its owner. And he's definitely in the 1%.
If they were the heroes of the 99%, they'd let their employees reap their share of the profits.
Awesome!
It is no longer uncommon to be uncommon.
When they asked you to pick up the can, they really meant it.
echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
Sure Zynga I'll sell my shares, Just as soon as you pay the price I ask. For threatening me, that price is now DOUBLE!
Yes, a boycott from a bunch of nerds on Slashdot will definitely hit them, it's not like they have a planetload of users.
Oh, wait...
A good one.
The world is made by those who show up for the job.
Low five?
I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
I didn't get mod points for a few years.
I put it down to trolling Taco about his dress sense on a TV interview.
Did you do something similar?
This post contains benzene, nitrosamines, formaldehyde and hydrogen cyanide.
If any of these employees are over 40, then Zynga is in for a world of hurt.
(40+ is a protected class under EEO law)
Isn't this the kind of thing that the SEC has purview over?
If the employees approached the SEC and told them about this unconscionable move against them, couldn't they make it difficult to allow Zynga to IPO until the situation is remedied?
Just wondering as someone not really into either FB or Zynga: what exactly is addicting about their games, as in comparison to other games (on Lin/Mac/Win/Xbox)?
If you're just wasting time, I guess Frozen Bubble is addicting, too. Is it like that?
I'm not a lawyer, but I play one on the Internet. Blog
DSL technology is way more than ten years old...
http://en.wikipedia.org/wiki/Digital_subscriber_line
They've been quite vocal lately. (And yes, for the Anonymous Cowards that reply to this post, you're very witty by half.)
Bark less. Wag more.
Certainly not true everywhere. Explicitly allowed in the UK
i already do. I dont even consider it a boycott so much as 'i dont trust that company or their ethics and i dont want anything to do with them or have any access to my information'. Or maybe im just a luddite when it comes to facebook games. Or maybe they are just stupid.
This should comfort potential IPO investors that this company is well run and managed. Plus a round of employee firing, and employee lawsuits ought to really assure them.
I was getting them every other day a few months ago, then switched off again. I think it's because at the time, I was pulling in a couple +5 Insightfuls a week, and now, I pull a few +0 Trolls a month, lol.
You can please all of the people some of the time, and some of the people all of the time, but sometimes you can't please /. mods at all. ;)
I8-D
IANAL, but I've heard that renegotiating salary under threat of termination is in itself illegal. That certainly sounds good, but are there any lawyers that can give us some insight?
I8-D
Just fire the non-perfomers. You get the non-vested stock back anyway; that's what it means to be non-vested.
It's better to vote for what you want and not get it than to vote for what you don't want and get it.
- E. Debs
Never seen it.
I'm going back to play Civilization III again...
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Not sure if this has been posted, but the "Google Chef" they're talking about is Charlie Ayers. Here's a little on him from Wikipedia:
Charlie Ayers is the former executive chef for Google. His work there was widely publicized in the media, and David Vise's corporate history The Google Story contains an entire chapter about him called "Charlie's Place." By the time he left Google in 2006, Ayers and his team of five chefs and 150 employees were serving 4,000 daily lunches and dinners in 10 cafes across the company's headquarters campus in Mountain View, CA. Ayers reportedly earned $26 million (USD) from his Google stock options.
Ayers began his professional career in New Jersey working for Hilton Hotels, at their Meadowlands and Parsippany locations in New Jersey. Later he left Hilton to attend culinary school in Providence, RI at Johnson & Wales University. He cooked at several restaurants in the Providence and Boston areas, before moving to California and serving as a chef for the Grateful Dead.
Following his time working for Google, he started Calafia Café / Calafia Market a Go Go. The first restaurant opened 20 January 2009 in the Palo Alto, CA Town & Country Village shopping center.
http://en.wikipedia.org/wiki/Charlie_Ayers
This guy isn't just a cook, he's the equivalent of either a Vice President or Senior VP in terms of corporate structure. Damn straight he deserves his options.
And I doubt that Zynga has someone like him. They're equating one of their longtime employees to the guy who runs the snack bar in the building.
I am Homer of Borg, resistance is - Ooo Donuts!
Good luck with that golden rule thing...
This reminds me of "the Golden Rule" that I try to live by: "Treat others as you would like to be treated."
The first Methane-breathing alien you encounter and treat as you'd like to be treated and place in a reducing Oxygen atmosphere will likely result in an interstellar war.
http://www.rfreitas.com/Astro/MetalawInterstellarRelations.htm ...or in simple terms: Do unto others as they would have you do unto them".
This leads to things like people with terminal illness being allowed to choose to proactively end their lives, and cryonicists being able to get themselves frozen before their glial cell carcinoma eats all the neuronal connections which encode the information that defines their self, but hey, those are things that should be allowed anyway.
-- Terry
We both have SlashID's starting with 68... Hmmmm... sound like a glitch in the system, then.
It's even worse. They are telling the next guy that they lie to their employees, that dishonesty is the norm at the company, and that to join them you have to be complicit in the lying they did to the previous employees.
Ah, that piece of irritating shit.
Question answered.
Topic no longer of interest.
Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"
Not just 68, but our IDs are like 1500 apart. We likely registered within a few days of each other. *shrug*
Nice to have em back.
It is no longer uncommon to be uncommon.
Hand back the salary I've paid you (plus interest) or you're fired.