Zynga CEO Displeased with WSJ Report

November 11, 2011 -

An internal memo obtained by Fortune's Term Sheet reveals that Zynga CEO Mark Pincus is very displeased with a Wall Street Journal report that says the company bullied employee stock holders because they gave them too much stock initially and wanted to add more value to its upcoming initial public offering. Zynga CEO Mark Pincus issued a statement saying that the WSJ story portrays his company in a "false and skewed light."

"The Wall Street Journal posted a story last night...which paints our meritocracy in a false and skewed light," Pincus wrote in the memo. "The story is based on hearsay and innuendo, which is disappointing but is to be expected as we move towards becoming a public company. We have nothing to hide in our past and present policies and I am proud of the ethical and fair way that we've built this company."

As Zynga expanded, Pincus offered new employees stock options instead of higher salaries. This is normal practice for start-ups, but the article, which is based on the accounts of two anonymous sources, claims that Pincus is now demanding the stock back ahead of the company's IPO.

Another story on Fortune's Term Sheet (written by Dan Primack) takes issue with the Wall Street Journal's conclusions. According to Primack, Zynga does not terminate under-performing employees, but re-assigns them to positions elsewhere in the company that might better suit their abilities. Part of this process apparently involves transferring some or all of their unvested stock options to the replacement - vested options are not affected.

"Zynga is a non-unionized startup, where the CEO is well within his rights to simply fire an under-performing employee (and recover unvested options)," Primack wrote. "In fact, that's what happens at most companies. The difference at Zynga is that Pincus seems intent on retaining talent, even if that talent either didn't live up to initial expectations or didn't adequately match up to the changing needs of a fast-growing company. What Zynga did may sound bad on newspaper, but is little more than morally-acceptable business as unusual."

It is rumored that Zynga will launch its IPO after the Thanksgiving holiday.

Source: Gi.biz, C|Net. Thanks to Kamendae for the original story.

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Re: Zynga CEO Displeased with WSJ Report

Ethical and fair are two words that are not to be used in connection with Zynga.

 
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Andrew EisenHence the "Uh, yeah. Obviously."09/02/2014 - 12:53am
SleakerI think Nintendo has proven over the last 2 years that it doesn't.09/02/2014 - 12:31am
Andrew EisenSleaker - Uh, yeah. Obviously.09/01/2014 - 8:20pm
Sleaker@AE - exclusives do not a console business make.09/01/2014 - 8:03pm
Papa MidnightI find it disappointing that, despite the presence of a snopes article and multiple articles countering it, people are still spreading a fake news story about a "SWATter" being sentenced to X (because the number seems to keep changing) years in prison.09/01/2014 - 5:08pm
Papa MidnightAnd resulting in PC gaming continuing to be held back by developer habits09/01/2014 - 5:07pm
Papa MidnightI find it disappointing that the current gen of consoles is representative of 2009-2010 in PC gaming, and will be the bar by which games are released over the next 8 years - resulting in more years of poor PC ports (if they're ever ported)09/01/2014 - 5:06pm
Andrew EisenMeanwhile, 6 of Wii U's top 12 are exclusive: Mario 3D World, Nintendo Land, Pikmin 3, Mario Kart 8, Wonderful 101, and ZombiU. (Wind Waker HD is on the list too but I didn't count it.)09/01/2014 - 4:36pm
Andrew EisenLikewise, only two of Xbox One's top 12 are exclusive: Dead Rising 3 and Ryse: Son of Rome (if you ignore a PC release later this year).09/01/2014 - 4:34pm
Andrew EisenNot to disrespect the current gen of consoles but I find it telling that of the "12 Best Games For The PS4" (per Kotaku), only two are exclusive to the system: Infamous: Second Son and Resogun.09/01/2014 - 4:30pm
MaskedPixelantehttp://www.joystiq.com/2014/09/01/beyond-two-souls-ps4-trophies-emerge-directors-cut-reported/ MMM MMM, nothing quire like reheated last gen games to make you appreciate the 400 bucks you spent on a new console.09/01/2014 - 4:24pm
Andrew EisenThat's actually a super depressing thought, that a bunch of retweeters are taking that pic as an illustration of the actual issue instead of an example of a complete misunderstanding of it.09/01/2014 - 4:20pm
Andrew EisenObviously, the picture was created by someone who doesn't understand what the issue actually is (or, possibly, someone trying to satire said misunderstanding).09/01/2014 - 4:10pm
Papa MidnightPeople fear and attack what they do not understand.09/01/2014 - 4:04pm
Papa MidnightWell, let's not forget. Someone held their hand in a peace sign a few weeks ago and people started claiming it was a gang sign. Or a police chief displayed the hand signal of their fraternity and was accused of the same.09/01/2014 - 4:04pm
SleakerEither people don't understand that what the picture is saying is true, or the picture was created out of a misunderstanding of what sexism is.09/01/2014 - 3:52pm
Sleaker@AE ok yah that's where the kind of confusion I'm getting. Your tweet can be taken to mean two different things.09/01/2014 - 3:51pm
Andrew EisenSleaker - No. No, not even remotely. The pic attached to my tweet was not made by me; it's not a statement I'm making. It's an illustration of the complete misunderstanding of the issue my tweet is referring to.09/01/2014 - 3:13pm
Papa MidnightIn other news, Netflix states why it paid Comcast: http://money.cnn.com/2014/08/29/technology/netflix-comcast/index.html?hpt=hp_t209/01/2014 - 3:10pm
Papa MidnightAndrew Eisen: Sites like Tumblr make things seem much bigger than they are. A vocal extreme minority start complaining and things go as they do.09/01/2014 - 3:09pm
 

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