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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

#171

Post by prostoalex »

kls wrote: post #156
prostoalex wrote: post #135

Earlier quoted context omitted.

Are you in executive/board/founder position? Once again, curious to hear the name of the companies. I glanced at this http://www.linkedin.com/in/kentonsmeltzer from your HN profile, and didn't find any Silicon Valley names, but I'm assuming you might not disclose everything there.

I own my own freelancing company now doing JS web apps and mobile, I am based in the Orlando Florida area, but I am part of a Vally start-up as the CTO. Sorry I have to be vague on that topic right now. That being said, I was an executive at Marriott and was in line for the CTO position before I left, I did rewire the options contract with Marriott and went through several iterations with Legal. I also built 3 start-…

Got it. Yeah, someone with CTO title might bend the rules a little. Otherwise stock and option plans are generally approved by the board. Asking a company to redraw the contact essentially makes it a CEO's call to reconvene the board as it goes outside of standard grant plan - not something that they'd do for a staff employee.

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

#172

Post by api »

cageface wrote: post #129
api wrote: post #12

Earlier quoted context omitted.

Very. It's bad. I kind of got out of startups for that reason. I just couldn't take working with sociopaths anymore. I have some stories. Serious f'ing stories. And no, I'm not just "player hating." A lot of it didn't even involve me. I just couldn't take working in proximity to such sleaze. Tech's had this reputation as a place where fortunes can be made. That's going to attract a lot of ambitious and creative peopl…

I'm not willing to go into specifics, but I will say that I saw worse things in the biotech industry. Having something in the pipeline for human clinical trials really boosts the IPO, even if maybe it doesn't belong there.

I've seen that too, and I've heard some whoppers of stories. Like, stuff that does not even slightly exist.

Pig, meet lipstick.

Like I said in another part of the thread: the stock market is the dumbest money around.

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

#173

Post by johngalt »

slavak wrote: post #153
johngalt wrote: post #122

Zynga is aiming squarely at their feet and firing a cannon. Would you invest in a company where management is obviously looking for a short term cashout at the expense of the future success of the company? The future success is precisely what the investor is buying . It's like buying a car while the seller is actively pulling parts out of it . The results of this will be reduced share values combined with lawsuits ea…

I was also wondering about this. A few people here commented that this is obviously a move by the execs to claw back as much stock as possible for themselves before the IPO in order to ditch it and run. On one level, this sounds realistic. But you have to wonder: Isn't taking this kind of action so close to the IPO just going to put their stock price into free-fall? Did they simply not expect this kind of headlines,…

I've got no doubt the execs still make more overall, but how much more? And is the difference worth their name? We will never really know the answer to this question.

Likely they picked a minority of the employees, and there will be a lot of unfair pressure on them not to "rock the boat" from the rest of the staff. So if the employees take it lying down I don't think much will come of it.

Conversely, if it blows up into a full class action. Then Zynga could be in trouble. You'll have newspapers running statistics like "X% of people who got ripped off are convieniently minorities or women".

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

#174

Post by rayiner »

brk wrote: post #32
utefan001 wrote: post #25

Any lawyers care to explain the legal possibility of keeping the stock after being fired?

IANAL. They are talking about unvested shares. The employees do not own them or have a right to exercise them yet. Every standard contract I've ever seen also includes a clause that shares stop vesting upon employment termination for any reason. So, they are basically saying "give up unvested shares, or else we'll make you give them up by firing you".

Law student about to graduate, but not yet admitted to the bar/not giving legal advice/etc:

The law does draw distinctions based on the circumstances surrounding a termination, even in an at-will state. The employee does not yet own the unvested shares, but they do have a contractual right to them. Terminating someone just to screw them out of a contractual right you agreed to in a contract is going to give someone ammo in a lawsuit.

Given its pre-IPO situation, Zynga is in a bad leverage position in the face of such a lawsuit. They're going to have an incentive to settle just to get the claims to go away. What they probably should have done instead is to terminate the employees for performance up front with a generous severance package and a contractual agreement to not sue the company for improper termination. But they probably couldn't handle these employees leaving right now. They wanted to have their cake and eat it too.

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

#175

Post by nobody3141592 »

ajg1977 wrote: post #105
thezilch wrote: post #59

Earlier quoted context omitted.

IANAL. Considering the employees are going to be challenging California's "at will" employment laws and the fact that the charges against the employees is performance based, how likely is #2 to have a fighting chance?

Just because California is an "at will" state doesn't mean a company cannot be sued for wrongful termination or constructive dismissal.

But it's pretty difficult to prove unless you are a protected minority and the boss shows up in a white robe and says "we are firing all the N.....s" or you fire a secretary after he/she refused to sleep with you AND you got the refusal in writing!

Usually the employee only wins because the company messed up the paperwork.

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

#176

Post by alex_c »

_delirium wrote: post #137
lemming wrote: post #80

Earlier quoted context omitted.

This is utter bullshit. And if it's not, anyone reading HN has better options. Let's stop with the all-employers-are-out-to-screw-you rhetoric because it's clearly not true.

I can believe we get a skewed view of anecdotes at HN, but stories about how employees got screwed out of equity by investors/founders when an exit loomed do seem like the norm around here. People even routinely give the advice that you should treat equity grants as having cash value ~$0 if you aren't a founder or maybe one of the first few key hires, because apart from the risk of the equity becoming worthless if th…

>stories about how employees got screwed out of equity by investors/founders when an exit loomed do seem like the norm around here.

Well, "everything went as planned" doesn't make for a very interesting story.

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

#178

Post by sbov »

ohyes wrote: post #120
lemming wrote: post #80

Earlier quoted context omitted.

This is utter bullshit. And if it's not, anyone reading HN has better options. Let's stop with the all-employers-are-out-to-screw-you rhetoric because it's clearly not true.

I agree. It is a bullshit situation, and you should be mad about it. Employers have a responsibility to maximize the profits of their shareholders/investors. They are not there to be your friend, take care of you, or compensate you beyond the minimum that they have to. Companies that offer bonuses/'benefits' are doing so as an incentive to retain you. The minute the market indicates that they can pull any of those be…

> Employers have a responsibility to maximize the profits of their shareholders/investors.

Somewhat shortsighted statement for this topic, considering the people they're harming here are employees who are... shareholders.

> If it were human, it would be a sociopath.

It may not be human, but they're ran by humans, and legally in many ways Corporations are people. In fact its a meme running in US politics lately. People with a lot of money, and a lot more power than 99.99% of humans. I'm getting sick of reading humans say Corporations, considered people and ran by humans, can do anything in the name of shareholder value, but for some reason, people with less money, power, and connections, have moral values applied to their actions. It's complete bullshit, and if people weren't so brainwashed they couldn't get away with this shit.

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

#180

Post by wavephorm »

Androsynth wrote: post #165
wavephorm wrote: post #160

Earlier quoted context omitted.

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…

Now you're just descending into pedantry. Yes, unvested shares are not technically equity, that doesn't mean they cannot be the basis of extortion.
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