Give Our Stock Back or Be Fired: Inside Zynga's Highly Controversial Gambit

by Knowlton Thomas

Mark Pincus is already reputably infamous for doing anything possible to achieve "success." And yet, somehow, this latest-to-surface gambit of his still surprises me.

A new report released by the Wall Street Journal reveals that the Zynga CEO and his clan of top executives determined many months ago that they messed up. How? According to industry sources, they felt that they had issued too much stock to early employees. They made a mistake in their eyes… and instead of learning from it for the future, they decided to reverse their errors in a rather forceful manner.

The execs made a list of employees whose contributions failed to justify their potential cash windfall when Zynga went public using what could only be a highly subjective method. And then these employees became unexpectedly faced with a ludicrous ultimatum: give their unvested stock back to the company…

…or be fired.

Naturally, they were pissed. Two hired lawyers, which resulted in some stock being given back, but not all (one of these employees left Zynga, the other remained). Mark justified the extremely controversial move by suggesting it was for the better of the company because it allowed Zynga to lure more top talent into the startup with more promise of stock—but now that this is public, the whole idea deflates: who's going to accept stock from a company that threatens to fire you if you don't give it back?

It is anticipated that Zynga will go public in the coming month and will aim to raise approximately $1 billion in its IPO.

Toronto, Ontario, Canada

Zynga is the world’s largest social game developer. More than 215 million monthly active users play its games. Zynga’s games include FarmVille, Treasure Isle, Zynga Poker, Mafia Wars, YoVille, Café World, FishVille, PetVille and FrontierVille. Zynga games are available on Facebook, MySpace and the iPhone. Through, Zynga players have raised more than $3 million for world social causes.... more

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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes and author of Tempest Bound. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys hiking, tennis, and martial arts. more

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