Give back our stock? Interesting phrasing. It's their stock. Give back our stock. Phrased like the employees took something that wasn't rightfully theirs.
Zynga to employees: Give back our stock or you'll be fired
321–330 of 383 posts
Re: Zynga to employees: Give back our stock or you'll be fired
#322Earlier 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…
> However after two years, and a few splits, I have 128 shares.
You're not a "4 shares employee" you're a "% of the company employee". The 4 shares are worth some percentage of the company and after all those splits they're still worth that same percentage. Splits usually happen to get the cost of the overalls hares down but a $1m holding in some stock is still worth $1m after the split.
>But the fact is that you are a 4 share employee being paid 3000% of what you were hired at.
So what! This is the point of accepting stock as compensation. They worked below what they were worth for the hope that they would win the lottery. They did win the lottery and now the company wants a redo.
Re: Zynga to employees: Give back our stock or you'll be fired
#323Earlier quoted context omitted.
The employees that get their shares stolen can sue for extortion, which is exactly how I and most people would describe this situation. Unfortunately the law generally favors those with more money and resources.
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.
All your posts here make you sound like a really ignorant person, in regards to the subject at hand. The best thing for you would probably be to stop posting and start reading instead.
Re: Zynga to employees: Give back our stock or you'll be fired
#324Earlier 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…
>You are acting as if they are being asked to give away something that they own
They are. They own those stock options, with the provision that they stay out the life of the vesting period. They are now being prevented from holding up their side of the contract. They would gladly stay through the vesting period if allowed to.
Re: Zynga to employees: Give back our stock or you'll be fired
#325Earlier quoted context omitted.
If we're talking about what should be illegal, I find it hard to argue that it shouldn't be. If you hire someone on the promise that they'll get a bonus at 5 years, and purposely fire them at 4 years, 11 months solely to avoid paying them the bonus, that should be illegal. In any reasonable interpretation of the contract, that isn't good-faith upholding of the contract--- you promised them something at certain milest…
I disagree, what you describe is shady, but also pretty unrealistic. Normally there's a vesting schedule with only a 1 year cliff, and then chunks vest yearly. That's essentially pro-rata.
No it isn't. A big corp I worked at in the US had a 1/7th per year vesting period. Then the dot com bubble came and they gave everyone 4-year cliff options. That is, no vesting until after 4 years. They absolutely could have fired people 3 years and 11 months in (and almost certainly did).
Re: Zynga to employees: Give back our stock or you'll be fired
#326Earlier quoted context omitted.
I disagree, what you describe is shady, but also pretty unrealistic. Normally there's a vesting schedule with only a 1 year cliff, and then chunks vest yearly. That's essentially pro-rata.
The standard is to have a 1 year cliff (i.e. 25% of equity vest at 1 year), and then monthly vesting of the remainder (1/36 per month for the next 36 months). NOT yearly vesting after the first year. The exception is M&A earn out or vesting for key hires, which is often yearly, and sometimes even crazier; 1/2/3/4 where it's 10% the first year, 20% the second, 30% the third, and 40% the fourth.
Oops, sorry, yeah, you're right - it is normally monthly.
That latter vesting is pretty crazy - with each year, each point is usually getting nonlinearly more valuable as well.
Re: Zynga to employees: Give back our stock or you'll be fired
#327Earlier quoted context omitted.
I disagree, what you describe is shady, but also pretty unrealistic. Normally there's a vesting schedule with only a 1 year cliff, and then chunks vest yearly. That's essentially pro-rata.
No it isn't. A big corp I worked at in the US had a 1/7th per year vesting period. Then the dot com bubble came and they gave everyone 4-year cliff options. That is, no vesting until after 4 years. They absolutely could have fired people 3 years and 11 months in (and almost certainly did).
Sorry, I was talking about the typical valley vesting schedule, I'm sure they run the gamut in the wider corporate world.
Re: Zynga to employees: Give back our stock or you'll be fired
#328Earlier quoted context omitted.
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. Peopl…
>It may not be human, but they're ran by humans
Wasn't there a report some years back that showed most CEO's were sociopaths?
Re: Zynga to employees: Give back our stock or you'll be fired
#329Earlier quoted context omitted.
I disagree, what you describe is shady, but also pretty unrealistic. Normally there's a vesting schedule with only a 1 year cliff, and then chunks vest yearly. That's essentially pro-rata.
what you describe is shady Not only is it shady it is a legal term and that term is called bad faith, if you can prove the party acted in bad faith, which if what is being reported about, return it or get fired, then that one is pretty locked up, then they are in violation of the spirit of contract. Faith is one of the foundations of contract law. If you are found to have not honored the faith portion of the contract…
I'm aware of bad faith.
I think the fact that it continuously vests after a cliff, that it's clear in basically every options grant that you don't receive unvested options upon termination, and because employment contracts repeatedly emphasize that employment is completely at-will makes it pretty clear that you shouldn't count your unvested option chickens before they hatch, and hard to prove that you could reasonably expect to vest all options. The employees that have been there for multiple years will have already vested a big percentage of their stock regardless of what happens.
I think Zynga is repulsive, and will hopefully get punished hard on many fronts for this, but I'm not convinced that what they're doing is strictly illegal. I'm convinced they'll get sued, though.
Re: Zynga to employees: Give back our stock or you'll be fired
#330This is really, really sleazy. The bottom line here is "You don't get to be a part of the IPO windfall." Given that the employees that are getting stung like this have accepted the risk of working at a startup, and likely have accepted lower salaries in exchange for the promise of stock options, this is morally equivalent to theft of services. Stock as a compensation structure only works when people use it in good fa…
Actually, given the instability of a startup, they should be paying more than market rate right out of the gate. They tried to do this by using stock options but enough crooks have found ways around it that I expect the labor market to adjust to this.