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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MaskedPixelantehttp://www.joystiq.com/2014/07/12/segas-plans-for-wii-u-virtual-console-are-non-existent/ Hope you didn't buy any Sega games off the original VC, since Sega has no plans on bringing them to the Wii U Virtual Console.07/12/2014 - 5:39pm
MechaTama31I think there are a significant number of jobs people will do for food that they will not do for an ipad.07/12/2014 - 8:39am
Infophilelabour (primarily among mothers and teens) and some show increased labour. Maybe it's a cultural thing in play that results in different outcomes in different societies.07/12/2014 - 6:53am
InfophileYou also need to take into account just how crappy it would be to only have the basics to live. But with competing forces at play like this, it's impossible to argue to an answer. We have to look to tests of it, and results are mixed. Some show decreased07/12/2014 - 6:51am
MechaTama31to be done, and some people really need jobs.07/11/2014 - 5:41pm
MechaTama31Info, I think you don't really understand just how crappy a lot of the jobs are that provide the "basics" that you assume will just continue to be produced under such a system. There's very little pride or prestige to be had from such jobs, but they need07/11/2014 - 5:40pm
Andrew EisenMaskedPixelante - That's probably because it's now available on the Wii U eShop for $8.07/11/2014 - 5:18pm
InfophileThat's not how human psychology works. It's all about "Keeping up with the Joneses." When everyone around you has a new fancy smartphone and is talking about that cool HBO series, do you want to be the one left out?07/11/2014 - 4:05pm
Matthew WilsonThe issue is most people would settle for the basics and not work. That is why we would need very heavy automation to make a system like that work. Almost all labor intensive tasks would have to be done by robot.07/11/2014 - 2:32pm
InfophileOf course, that's a gross oversimplification. The idea, have a basic safety net that pays for what's needed to live. If people can find a job and are willing to work, they get more money which can be spent on comfort and perks.07/11/2014 - 11:33am
InfophileIt's quite possible to get an economy to work with a basic minimum standard of living. You just need perks for the people who do work. Everyone gets food and a home. Everyone who works also gets an iPhone.07/11/2014 - 11:32am
MaskedPixelanteIn the continuing adventures of "Stuff I figured would be overpriced on eBay but isn't", 15 bucks for a copy of Mario and Luigi: Superstar Saga.07/11/2014 - 10:04am
SleakerI didn't gather the same conclusion.. Seems like they are focusing on devices & services still, just not calling it 'devices and services'07/11/2014 - 8:57am
PHX CorpMicrosoft CEO readies big shakeup, drops devices and services focus http://www.theverge.com/2014/7/10/5887143/satya-nadella-microsoft-ceo-employee-email07/11/2014 - 8:45am
MechaTama31declared that everybody should have them. Somebody still has to produce them.07/11/2014 - 7:44am
MechaTama31I do mean the developers/governmet. And money is not the only thing of value. I am including the food, housing, etc that everybody is supposed to get for free under this system. In the real world, those things don't exist merely because an authority has07/11/2014 - 7:43am
InfophileAs automation gets better and better, the number of jobs absolutely required keeps diminishing. How many people these days do you think are actually needed to keep everyone alive? Most people just make our lives more convenient and entertaining.07/11/2014 - 4:43am
Matthew Wilsonthat kind of system only works when most people (around 70 to 80 percent ) do not need to work.07/11/2014 - 1:21am
TechnogeekConjured up by who, though? If by the players, then it's not really "on a whim" since they're kind of putting work into it. If you mean the developers/government, then hello and welcome to monetary sovereignty.07/11/2014 - 12:34am
MechaTama31I'm just saying, when everything of value can be conjured up at a whim, that's not an economy. That's a fantasy.07/11/2014 - 12:15am
 

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