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Zynga to employees: Give back our stock or you'll be fired

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Re: Zynga to employees: Give back our stock or you'll be fired

#161

Post by rick888 »

kls wrote: post #100
api wrote: post #53

Earlier quoted context omitted.

I'll do a quick summary. Episode 1: (this is the one that most directly affected me) I was working on a very interesting but somewhat far-off technology. I did some tech talks about it, and put them on Google Video. Was approached by a guy who said he was a wealthy early-stage technology investor. He showed me a lot of stuff that indicated that this was the case, had a lot of real people vouching for him, etc. He mad…

Yep this stuff is a dime a dozen and is a big reason why someone with just an idea is not taken seriously by technical people, those of us who have been around for a while have seen it all. Half want something for nothing and want to take it and run if you actually produce it and screw you out of any profit from your work, history is littered with tech guys getting screwed by idea men / con artist. It's almost like i…

The other problem with idea people is that they haven't risked anything. I've been partnered with a few idea people in the past and if the project isn't finished quickly, they usually move on or want to do something else (and all the hard work you put into it is for nothing).

If a non-tech person can't offer me connections in my app's market or cash for funding, they won't ever be a partner.

I also now have problems with acquaintances giving me simple ideas that I thought of before (or are in the process of implementing) and claiming that they gave me the idea.

Re: Zynga to employees: Give back our stock or you'll be fired

#162

Post by kls »

Androsynth wrote: post #144
kls wrote: post #128

Earlier quoted context omitted.

Right, I am fine with the part that hey we think you are overpaid and we want to renegotiate the option awards that have not been granted, but they are walking a fine line renegotiation the ones that have already been awarded but have not vested. Many companies will award a certain amount of options and those options come with a vesting schedule so for example I get awarded 4 shares that vest in one year. My contract…

Most contracts state that you lose unvested shares upon termination. It doesn't make sense any other way. However the problem with your math (and most others in this thread) is this: lets say Zynga values me at 4 shares, and I get 1 vested per year. However after two years, and a few splits, I have 128 shares. The company hired me to work as a 4 share employee, then it grew like crazy and I became a 128 share employe…

What you are talking about is no dilutional where if they split, you are not diluted and your options do not get diluted, so instead of the 4 you agreed to you get the equivalent after the split. Most contracts are dilutional, where you get 4 regardless of splits, I have never seen a contract (in my dealings) that has been non-dilutional in original form, I have always had to add non-dilutional clauses to my contracts because I have had my ownership eroded through this very mechanism.

Re: Zynga to employees: Give back our stock or you'll be fired

#163

Post by api »

simon wrote: post #87
api wrote: post #53

Earlier quoted context omitted.

I'll do a quick summary. Episode 1: (this is the one that most directly affected me) I was working on a very interesting but somewhat far-off technology. I did some tech talks about it, and put them on Google Video. Was approached by a guy who said he was a wealthy early-stage technology investor. He showed me a lot of stuff that indicated that this was the case, had a lot of real people vouching for him, etc. He mad…

Worked at a place that shall not be named, back before startups were hip and trendy. They had received capital funding from a local collective of business folks. Lots of bad use of the money and telling investors versions of the truth. I remember one time, the big boss was showing an investor around and brought them back to the IT area. I was third man in the company, but first one with no shares, so I was completely…

Investors bear some culpability for this. The criteria that they sometimes use to judge their investments is... umm...

I had an investor once tell me with a straight face that he only invests in founders with a "prominent chin," because that "physiognamy" indicates someone who is an "operator." (Edit: he wasn't talking about me. It was at a conference. He had a beer or two in him. But I think he was serious. The context was serious.)

I am not making this shit up. Said investor who shall not be named operates a venture capital and business consulting firm out of Atlanta, Georgia and New York.

Given the quantities of money involved, I am kind of floored that more rational and scientific methods are not brought to bear on the problem of capital allocation. Don't get me wrong. The best of the best do think at least somewhat rationally about allocating their capital. But there is a ton of dumb money, and in my experience the dumb money tends to chase flashy fast-talking boatloads of bullshit piloted by sociopaths.

Edit: that's also why these guys always make a beeline to IPO. The stock market is the dumbest money around. I'm not saying all IPO-driven companies are sleaze-fests... but there's something about how they do it. They do everything they can to create the immediate impression of success in order to push for IPO as fast as possible, cash out, and leave. Groupon is probably the poster child right now.

Re: Zynga to employees: Give back our stock or you'll be fired

#164

Post by rayiner »

hugh3 wrote: post #92
davorak wrote: post #49

Earlier quoted context omitted.

The fact that it is unvested shares changes little. The employees where lead to believe that if they meant a certain milestones they would receive stock. Now the milestones have been changed. The employees must now also meet new criteria for productivity to receive stock. They signed up for one deal and are now being served another.

Except the possibility always existed that they could get fired and not get that stock. The only thing that has changed is that Zynga is now saying that they're willing to fire you just so you don't get that stock. Deeply unethical, and terrible for employee relations, and not at all in the interests of the company, but probably legal.

Even in right to work states, there's all sorts of reasons a company can't fire you, it's just the burden is on you to prove them. Pedagogical example is that your boss can't fire you just because you wouldn't sleep with him. If they fire you claiming it was just for performance, but you have evidence of circumstances that makes it clear it was because you wouldn't sleep with him, then you've got a problem.

Firing someone to screw them out of contractual rights you both agreed to is problematic. And even if the company claims it was performance-based, which they will have to, the CEO's statements basically give the other side all the evidence they need to refute that.

Re: Zynga to employees: Give back our stock or you'll be fired

#165

Post by Androsynth »

wavephorm wrote: post #160
Androsynth wrote: post #149

Earlier quoted context omitted.

Bullshit, this is a free market economy. If I feel you are overpaid for what you contribute, I can fire you. This is not extortion, they are readjusting their compensation to the market-going rates. Whether it is moral or whether it will hurt them in the future are different questions.

They aren't being fired for being overpaid, they're being threatened with termination unless they surrender their equity in a privately owned company. Definiton of extortion (from wikipedia): Extortion (also called shakedown, outwresting, and exaction) is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion. What…

That is an inaccurate view of the situation. Unvested shares are not equity.

You are acting as if they are being asked to give away something that they own; they are being asked to give up future compensation.

I put this in another comment: "However the problem with your math (and most others in this thread) is this: lets say Zynga values me at 4 shares, and I get 1 vested per year. However after two years, and a few splits, I have 128 shares.

The company hired me to work as a 4 share employee, then it grew like crazy and I became a 128 share employee. This is normal in tech nowadays, most people take it for granted that you just get lucky and accept your windfall. But the fact is that you are a 4 share employee being paid 3000% of what you were hired at."

I know this goes against the way it's always been in the tech industry, but it is not extortion.

Re: Zynga to employees: Give back our stock or you'll be fired

#166

Post by nickpinkston »

lbarrow wrote: post #91
nickpinkston wrote: post #14

Scumbag Zynga? Make money pressuring users to pay for virtual goods. Pressure employees to give stock for virtual jobs...

This isn't reddit.

Yes, this is SPARTA!

No seriously, I was just making the point as a joke that we shouldn't be surprised that a company like Zynga, who makes money through admittedly slimy means, wouldn't have the same attitude towards everything else too. I think the ScumBag meme is apt.

Re: Zynga to employees: Give back our stock or you'll be fired

#168

Post by fapi1974 »

api wrote: post #110
ohyes wrote: post #97

Earlier quoted context omitted.

> Do they actually teach this s--t in business school? What the hell? I had a friend when I was much younger who got into some shady stuff including drug trafficking, and he told me a lot of stories. None of them approached what I experienced in the "legitimate" business world. I have to ponder that if one made a habit of screwing people over in the drug trafficking and/or shady business, the individual might end up…

Yeah. An armed society is a polite society.

Hey - if you're interested, I could use your story! Check this out: http://news.ycombinator.com/item?id=3220610

Ping me on email!

Re: Zynga to employees: Give back our stock or you'll be fired

#169

Post by benmathes »

ethically: equity compensation for a lower-than-market-rate salary is effectively an investment by the employee. They give up potential funds for equity. This includes unvested equity in the investment since, in the beginning, it's _all_ unvested.

If you take back some of that equity with no commensurate repayment, then fuck you.

Re: Zynga to employees: Give back our stock or you'll be fired

#170

Post by fab13n »

ChuckMcM wrote: post #139
fab13n wrote: post #121

Earlier quoted context omitted.

Indeed, they will only have one IPO. But the PR backlash can seriously affect it, if it's made clear to everyone that the execs are crooks, and that they'll never be able to hire talents again.

The poster child here is Groupon (GRPN) and while the poor choices of their executives did negatively affect the IPO they are still (11/9) trading above their IPO price of $20 ($24.50 when I glanced).

I don't think that Groupon execs are widely perceived as crooks, whereas Zynga's ones are more than hard to defend here.

Moreover, Zynga execs' move was likely intended to increase the total worth of their shares; if they manage to claw 20% more shares, but destroy 30% of each share's value, they've hurt themselves even in the short term (figures made up for illustration, obviously).

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