The real news is not that they're taking back stock, it's that their initial stock plan was so screwed up that they have to do it.
I thought that myself. "Wait, shouldn't they know they've been giving out more stock then they should have??!"
Zynga Chief Seeks to Claw Back Stock
131–136 of 136 posts
Re: Zynga Chief Seeks to Claw Back Stock
#132Anytime you have both vesting schedules and at-will employment, your employer can fire you at any time and you will not get any unvested stock. Startups need to do this all the time when employees are underperforming or a bad fit. Renegotiating so that you can get a portion of that stock and stay employed is perhaps, if this were an isolated incident, a much better deal for the employee than getting fired. Where this…
The oddball thing here is not that people are being let go so that a startup can recapture their unvested stock (as you note, this happens all the time, for reasons both good and bad) but that a company would create what amounts to a "hit list" in order to systematically pressure employees to surrender shares on threat of being fired. The company-wide message to employees is, in effect, "we lured you to join us with…
> [...] maximizing value for other shareholders in the company. But at what price?
Re: Zynga Chief Seeks to Claw Back Stock
#133Earlier quoted context omitted.
Can you help me understand the contempt you have for the Zynga games? I don't play, myself, but I do understand that the games exploit (negative? compulsive?) psychology, and they've used unethical business strategies. But who cares? After all, it's unlikely the next Vonnegut is going to spend his time playing MafiaWars instead of writing "Slaughterhouse Five" or anything. I am reminded of the aphorism, "Time you've…
Do you know any writers? Because the ones I know mostly have a terrible problem with procrastination, avoidance, etc. Fulfilling a compulsion is not actually enjoyable. So unlike most game-makers, I don't see them as creating fun.
I've never really played any of these games, do they not involve at least some level of skill or strategy?
What makes them worse than say, world of warcraft?
Re: Zynga Chief Seeks to Claw Back Stock
#134Earlier quoted context omitted.
Founders only need to exit once. There is surprisingly little incentive for a founder to avoid screwing over employees.
> There is surprisingly little incentive for a founder to avoid screwing over employees. Other than being treated like toxic waste by every prospective VC and business partner until the end of time.
I think there are certain business cultures that might celebrate this kind of approach as an innovative scheme for maximizing profits, where there is a philosophy that anything that makes one rich must be a good thing.
If nothing else this sort of approach might get one a well paid consulting gig in maximizing the throughput of a child labour force or something similar?
Re: Zynga Chief Seeks to Claw Back Stock
#135Earlier quoted context omitted.
I just remember there being a famous story of Mark Cuban buying out of the money puts on Yahoo stock after the acquisition of Broadcast.com. Obviously a different scenario, but always reminded of this whenever IPO lockup talk comes up.
Cuban used a synthetic hedge. "After we sold Broadcast.com, I hedged my stock with synthetic indexes, in case the market cratered in the six months before I could hedge my actual Yahoo shares. It cost me $20 million, but I protected what I had." http://www.fastcompany.com/magazine/63/fasttalk.html So he effectively hedged out his dot-com-bubble risk, not his yahoo-is-relatively-speaking-a-turd risk.
>> So he effectively hedged out his dot-com-bubble risk, not his yahoo-is-relatively-speaking-a-turd risk.
Re: Zynga Chief Seeks to Claw Back Stock
#136Earlier quoted context omitted.
As an investor what this tells me is the CEO has no personal integrity, and I begin to doubt the veracity of his IPO filings.
You shouldn't believe them anyway, because they are selling you something.
You're probably right about that. Still, I prefer not to do business with people lacking integrity. There are a lot of different ways to get swindled.