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.

Posted in

Comments

Re: Zynga CEO Displeased with WSJ Report

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

Forgot your password?
Username :
Password :

Shout box

You're not permitted to post shouts.
james_fudgeI'll be watching the Facebook page09/01/2015 - 10:14am
james_fudgethe site maybe up right now, but we're not updating until we're at the new location.09/01/2015 - 10:13am
james_fudgehttps://www.facebook.com/gamepolitics09/01/2015 - 10:12am
Mattsworknamehttps://www.youtube.com/watch?v=T-Vx4_prmvo09/01/2015 - 3:18am
MattsworknameTotal bisquit talkes about why teh Deus X pre order systems is garbage.09/01/2015 - 3:18am
MechaTama31Infophile: Kind of like how you're criticizing these theoretical reactions before you've even read any? ;)09/01/2015 - 12:44am
PHX CorpI'll probaly Start the stream around 8PM Eastern08/31/2015 - 10:09pm
PHX CorpOk, see you guys Tomorrow on the GP Facebook Page, I'll be steaming either the first 2 megaman games(Through Megaman Legacy Collection) or Rare Replay as the first game on My twitch.tv page tomorrow While we wait for GP to Come back up later this week08/31/2015 - 10:01pm
james_fudgeAlso check out our Facebook page and chat there! https://www.facebook.com/gamepolitics08/31/2015 - 9:53pm
james_fudgeSee you all on the other side! Find me on Twitter :)08/31/2015 - 9:51pm
james_fudgeAllright, i'll mention this on the GP facebook page08/31/2015 - 9:49pm
PHX Corpand now it's ready to go for everyone08/31/2015 - 9:35pm
PHX Corpok, done http://www.twitch.tv/trustygemtwitch I have to put on one more finishing touch and it is ready to go08/31/2015 - 9:19pm
Andrew EisenFeel free to leave us suggestions on Facebook or Twitter too. We're going to be busy but we'll try our best to keep an eye on 'em.08/31/2015 - 8:59pm
Andrew EisenIt's an interesting idea though. If we do anything, we probably won't know until after the site goes offline so keep an eye on GP social media for announcements.08/31/2015 - 8:59pm
Andrew EisenYeah, we could use my Twitch chat box too. There's always IRC but we don't currently have a GamePolitics channel.08/31/2015 - 8:57pm
Goth_SkunkThough I think the limit is 9 at a time in the hangout, so anyone who can't get in would be stuck out in the 'on air' portion.08/31/2015 - 8:57pm
Andrew EisenFor the show, I'd like the chat open to anyone who wants to watch.08/31/2015 - 8:55pm
PHX CorpI could Set Up a Temporary chatroom on My twitch.TV page while GP is busy updating the site(since I'll be Fighting Megaman Legacy Collection on Xbox one)08/31/2015 - 8:54pm
Goth_SkunkI don't see a problem with inviting viewers. It's not like I'm advocating this to be an open forum, just something specific to GP members.08/31/2015 - 8:53pm

Be Heard - Contact Your Politician