Zynga To Employees: Surrender Pre-IPO Shares Or You're Fired 554
ardmhacha writes "Zynga seem to think they were overly generous handing out stock to early employees. Fearing a 'Google Chef' situation they are leaning on some employees to hand back their unvested stock or face termination. From the article: 'Zynga's demand for the return of shares could expose the company to employment litigation—and, were the practice to catch on and spread, would erode a central pillar of Silicon Valley culture, in which start-ups with limited cash and a risk of failure dangle the possibility of stock riches in order to lure talent.'"
Mafia (Score:5, Funny)
Re:Mafia (Score:5, Insightful)
I don't see how this is all that different from the way most large American corporations operate these days.
Re:Mafia (Score:5, Insightful)
I think demanding already paid compensation to be returned is very different from the way most American corporations operate. I've never heard of it before. It's mind boggling, and if I were said employee, I'd definitely quit on the spot.
Re:Mafia (Score:5, Informative)
Quitting is a bad move. Getting fired is much, much better for your lawsuit.
Dont' quit, but don't agree either. (Score:5, Interesting)
If you quit, you can't collect unemployment. If you refuse, then they have to decide to fire you ... and either way, you've still go the shares.
Also, this could be interpreted as constructive dismissal, in which case you can tear up that non-compete you signed, since they have broken the terms first.
Re:Dont' quit, but don't agree either. (Score:5, Interesting)
Unvested shares aren't actually money in your wallet if you quit the company or get fired. They're only worth something after they vest, and the agreement at companies such as these is that they don't vest if you've left the company before the vest date (whether you've been fired or quit).
Re:Dont' quit, but don't agree either. (Score:5, Interesting)
I'm willing to bet that almost any jurisdiction in the United States would find someone getting fired to prevent the vesting of shares would be an act of fraud on the part of the employer.
The contract is: work for us, don't quit or get fired for cause, and if we are a success you'll have shares and maybe get rich. Their 'cause' is 'we might have to pay up'. FRAUD!
The smarter employees should be starting a class action lawsuit right now, and burn that company to the ground and pillage the corpse for whatever they can get.
Re:Dont' quit, but don't agree either. (Score:5, Informative)
It's not the first time for this in silicon valley. Vulcan ventures fired Leo laporte when he refused to turn over shares when they sold TechTv to comcast. I think Laporte had vested shares at least but it's not unheard of for a VC to fire a bunch of people before their vesting date.
Re:Dont' quit, but don't agree either. (Score:5, Insightful)
Getting revenge can be quite satisfying if your shares are going to be worthless no matter what you do anyway.
Re:Dont' quit, but don't agree either. (Score:5, Informative)
In CA, you can get unemployment even if you quit, get fired for stealing, etc.
False. You can get it if you quit, but you have to have a very good reason for quitting and you have to take steps to rectify the issue first.
http://www.edd.ca.gov/uibdg/Voluntary_Quit_VQ_5.htm [ca.gov]
You cannot collect at all if you are terminated for willful theft.
http://www.edd.ca.gov/uibdg/Misconduct_MC_140.htm [ca.gov]
Two employees at my porn store (former employees, that is,) are collecting. On our dime.
You either do not know the whole story, or are withholding relevant information.
Re:Dont' quit, but don't agree either. (Score:5, Informative)
Re:Dont' quit, but don't agree either. (Score:5, Informative)
You're either none too bright, a paid shill
Or Khyber.
This is the correct answer. Khyber constantly posts these BS stories--here, on lulz.net, forums for pot growers, and everywhere else he hangs out. Don't forget that he claims that his other job besides porn store clerk is research director for the LED company he advertises in his .sig.
Re:Dont' quit, but don't agree either. (Score:5, Funny)
In CA, you cannot collect unemployment benefits if you were dismissed for gross misconduct. Such misconduct includes stealing from your employer. Don't let facts get in the way of telling a good story however. Hyperbole and misdirection are important literary devices.
Re:Dont' quit, but don't agree either. (Score:4, Funny)
Hyperbole and misdirection are important literary devices.
...and porn. Don't forget the porn.
Re:Dont' quit, but don't agree either. (Score:5, Interesting)
>either way, you've still go the shares.
You only get to keep vested shares.
These are unvested shares at issue. If you quit, or are fired, you lose them. If you are fired because you would not give back the shares, you might have a case to get them back, or a settlement of some sort.
Yep, courts tend to take a pretty dim view of the "we agreed you get X if you are working for us, please give up X or we will fire you" gambit: it's almost bad faith by definition.
Happened to me once: I just printed the memo and put in on my cube wall; got a few lawyers/mangers dropping by to "explain why I needed to sign." I sweetly said no: they said "ok" and got out of the room fast: they were smart enough to figure that concocting a paper trail to fire a well-rated employee, given a memo like that, was somewhere between "bad" and a felony.
Re:Mafia (Score:5, Insightful)
Re:Mafia (Score:5, Insightful)
I wouldn't. I'd tell my lawyer to prepare his largest vault and stand my ground. There are times when suing is the right course of action.
There are times when *threatening to sue* is the proper course of action. There are fewer cases where filing a complaint (i.e. initializing a lawsuit) is a proper course of action. It is much, much rarer for suing and going to trial to be the proper course of action.
Lawsuits take years, cost major time and money--usually even if you win, though then it is a net gain--and the outcome is not assured. Settlement is usually (though not always) the rational choice, unless the other side is being irrational or is poorly advised.
Re:Mafia (Score:5, Insightful)
There are times when *threatening to sue* is the proper course of action. There are fewer cases where filing a complaint (i.e. initializing a lawsuit) is a proper course of action. It is much, much rarer for suing and going to trial to be the proper course of action.
Probably don't "threaten to sue" in such a situation; get your lawyer to write some warning letters, first of all.
People casually threaten to sue all the time and aren't serious about it -- make sure they know you've done your homework and are serious about pursuing what course you need to best defend yourself from unjust treatment.
Re:Mafia (Score:5, Insightful)
Re:Mafia (Score:4, Informative)
Yes; I meant threaten to sue with the help of an attorney.
Re:Mafia (Score:5, Interesting)
This particular tactic is definitely new, but the entire culture of sociopathic behavior is nothing new to large American corporations. This one has simply found a new way to be total assholes.
Given that they're in California, which is a very employee-friendly state (one of the few I believe where non-competes are unenforceable), hopefully they'll lose their shirts after some newly-fired employees sue their sorry asses.
Re:Mafia (Score:5, Insightful)
Re:Mafia (Score:5, Insightful)
Mod Parent up +5 Sad Truth.
just issue new shares and dilute current shares; while giving management and investors a number to keep their percentages the same.
Similarly, mark Zynga clueless for trying something so boneheaded when the parent's tried and true method accomplishes the same thing, but in a way that has been, sadly, accepted by the establishment for years.
Re:Mafia (Score:5, Interesting)
Perhaps this would make a good ask /. submission. How do you avoid getting screwed over the old fashioned way. And this way as well. I'm sure there will be plenty of IANAL, and consult your attorney answers but there have to be some who have successfully negotiated this maze...... And the more you know when going to an attorney the better off you are in either a) judging their competence and/or b) saving a bit of cash by doing some upfront research so you're asking questions that are relevant.
Re:Mafia (Score:5, Insightful)
Re:Mafia (Score:4, Insightful)
I feel like I have hedged against getting too screwed by one simple method: making sure I get at least 90% of "my market value" in salary. Stock is a nice bonus when it works out, I worked at one place that did a "standard employee purchase plan" that worked very well for me, almost like a 15% bonus every 6 months. But, the high risk, "potentially very wealthy" deals have always turned to their most likely result in the end: zero value.
Re:Mafia (Score:5, Informative)
Eh, Barring employees from talking about wages is a violation of The national labor relations act [wikipedia.org]. I'd cry tears of joy if I had it on paper someone was firing me for that reason, because winning the resulting lawsuit would be basically guaranteed.
Re:Mafia (Score:4, Interesting)
Eh, Barring employees from talking about wages is a violation of The national labor relations act. I'd cry tears of joy if I had it on paper someone was firing me for that reason, because winning the resulting lawsuit would be basically guaranteed.
TRUE! But, do be aware that the NLRB has ruled that companies can restrict/prohibit said discussions in work areas and during work time. But in the bathroom, lunchroom, or any other "non-work" area (not sure if it also has to be during non-work hours in said places), you're good to go.
Re:Mafia (Score:5, Informative)
Sadly, it happens. Usually it's in the form of reducing retirement benefits after employees have already put the time in.
Re:Mafia (Score:5, Interesting)
Sadly, it happens. Usually it's in the form of reducing retirement benefits after employees have already put the time in.
I worked at a company that would fire employees who got close to the point at which they were "vested" in their retirement plan. At one point they had to scramble around and fire a poor guy who had been there almost ten years; they discovered he had enough vacation time to put him over the vesting period (which then was ten years).
That was when I - and several others - started looking for new jobs.
Re:Mafia (Score:5, Insightful)
Re:Mafia (Score:5, Insightful)
Every time an article like this is posted on Slashdot, I keep wondering why the hell people don't organize.. It seems to me that American IT-workers are in sore need of a proper union. Behaviour like that would lead to a world of hurt for the company over here, yet Americans just lie down and take it like some kind of slaves.
Re:Mafia (Score:4, Interesting)
Ha! Yeah! A union would fix that right up!
Back in the real world, my mom was a union employee of a railroad. At the high point of her career, she had the job title of Wire Chief and was basically in charge of their communications system (which included a phone switch in her office - not a PBX, but a 5ESS). When she'd worked there approximately forever, they closed her office and gave her a choice of moving to Minnesota or the local railyards. She hates winter and decided to stay. Well, her new role was sucky and only got suckier as she grew closer to retirement. She had a lot of seniority with the company but almost no seniority at the railyards, the yard employees resented an office worker occupying one of "their" jobs, and management gave her boss orders to make her quit before she retired.
At first, her main job duty was to stand next to the tracks and write down the numbers off the sides of train cars as they rolled past. By the end, they had her mopping the outhouses the train crews used. She made a game of the the situation:
Boss: So, how's the outhouse cleaning going for you? (with a nasty smile)
Mom: Oh, I love it! I hated being stuck in that old office and now I get to spend time outside!
Boss: [seethe]
But back to the original point: her union didn't do jack to help her. Nothing. Nada. She was a paying member for nearly three decades and the "proper" union provided her no assistance whatsoever.
And that's why I have nothing but disgust for American-style unions. Maybe they're legitimate and useful where you live, but as far as I can tell the ones we have are utterly useless.
Re:Mafia (Score:5, Informative)
The problem is that this is about yet-unvested stock - so if an employee quits, or is terminated for cause, he'll never get to vest them and loses them all. So company, basically, demands that employee surrenders a part of his unvested stock in exchange for being given an opportunity to vest the remainder.
That said, I've never heard of that ever happening, large corporations or no. Certainly not from anyone I know at Microsoft or Google. You can kinda understand why, too - it's morally equivalent to promising a certain payment upfront, and then reneging on it. The effect of doing so, especially in a way as public as this, will severely affect company's ability to attract talent. I mean, I know that I would never, ever consider working for Zynga after this news, and I bet many people would agree on that. I don't know what the hell they were thinking with this. Unless, of course, they plan on switching to 100% H1-B for rank and file (and even then the ones that are actually good would still skip on such an offer).
Oh, it happens (Score:5, Interesting)
Re: (Score:3, Insightful)
Then you're blind.
And if you interpret this as a defense or implicit approval of the behavior of most large American corporations, then you're deaf.
Distinguishing: A lost art of great value.
Re:Mafia (Score:5, Funny)
If you think most large American corporations are run by honest people who actually value their employees and wouldn't even think of defrauding them to improve their bottom line (and executive compensation) if they could get away with it cleanly, then you're an idiot.
If someone had asked me "Hey Chris, if you could put words in Grishnakh's mouth, what would you have them say in order to perfectly exemplify your point?" I would have replied with something almost exactly like what you just wrote. It's uncanny.
Even though I flat out told you it was not the case, you still took my statement that most companies are not equally abusive to their employees as this to mean that they are wonderful places that love and support their employees without fail.
You've literally declared your inability to distinguish between anyone who isn't completely trustworthy, unable to even think of defrauding their employees. Well, guess what? In reality, nobody is completely trustworthy, and there are many degrees of untrustworthiness. There are many degrees of contempt for employees. By thinking only in absolutes, you've failed to notice when something is the same in kind but exceptional in degree. This is catastrophic to problem solving, which in the real world requires targeted efforts and nuanced understanding.
Distinguishing: It matters. It seems to be an increasingly lost skill. I guess because "A is not X and B is not X therefore A = B" is nice and easy "logic". But I think it is ruining our discourse and ability to realistically address our problems in this country.
Re:Mafia (Score:5, Funny)
You've literally declared your inability to distinguish between anyone who isn't completely trustworthy, unable to even think of defrauding their employees. Well, guess what? In reality, nobody is completely trustworthy, and there are many degrees of untrustworthiness. There are many degrees of contempt for employees. By thinking only in absolutes, you've failed to notice when something is the same in kind but exceptional in degree. This is catastrophic to problem solving, which in the real world requires targeted efforts and nuanced understanding.
Dude - Grishnakh's an orc. They're not really known for their subtleties in thought.
There are more discreet ways to do this (Score:3)
Re:Mafia (Score:5, Informative)
Yes. Their management is well known for doing all kinds of borderline illegal stuff. Seriously, look up stories about how they got started.
Re:Mafia (Score:5, Interesting)
Yes. Their management is well known for doing all kinds of borderline illegal stuff. Seriously, look up stories about how they got started.
Not just borderline. I don't know about this mafia control stuff, but I remember their direct pixel for pixel use or art assets from...was it Age of Empires?
Re:Mafia (Score:5, Insightful)
Clearly not. The Mafia might be a criminal enterprise, but they have always understood that without your word, you're nothing.
Re: (Score:3)
Does a criminal environment, with its, er, vigorous, competition and possibility of advancement through killing people? Or does the rule of law, where smirking and saying "We did nothing illegal" won't get you shot by the people you've just stiffed?
Re:Mafia (Score:5, Interesting)
There's a related study about how succesful managers in modern corporations are closer to pyschopaths than average.
http://www.medkb.com/Uwe/Forum.aspx/alternative/43595/Question-Authority [medkb.com]
Re:Mafia (Score:5, Interesting)
There used to be a common misperception that the age of expansion of the American West was lawless with murdering, theft, and rape a daily occurance. People were actually quite civilized, often more so than today. You were very likely to be shot dead for acting like an a*hole, especially to a lady. A vigilante hanging of people that wouldn't conform to the norms of society was often performed during a Sunday picnic, so the children would have an up close and personal experience of what would happen if they made poor choices in life.
In my past life, I quite often found that when my drug-dealing friends said that they would do something, it happened. Even if they got shot to make it happen. I got screwed over so many times by the preacher's kids, and other scumbags like them, it wasn't funny. It almost got to where a suit and tie meant someone was out to rob me/lie to me/screw me over. "Real" people backed up their word with their life.
I think the biggest lesson I've learned in life is that when people are held accountable for their actions with the valid threat and rapid application of violence, they act the most "civilized". It's almost like dealing with small children, sometimes the closest way to get a lesson to their brain is through their butt. It seems like every "civilization" that removes or reduces the threat of violent consequence to members for their actions, doesn't last long. They go down in flames of revolution, political corruption, and general anarchy. They look much like we do today.
Re:Mafia (Score:5, Insightful)
"People were actually quite civilized, often more so than today."
"A vigilante hanging of people that wouldn't conform to the norms of society was often performed during a Sunday picnic, so the children would have an up close and personal experience....."
How very civilized.
Re:Mafia (Score:4, Insightful)
Yup, I guess that's why many European societies which have much tighter gun controls and lower levels of firearm ownership than the US are so much less polite.
Oh, wait...
Re:Mafia (Score:4, Funny)
They shill an addictive product to millions of suckers legally. No I think they're big tobacco or Eli Lily.
Or Red Bull (And yes I'm drinking one right now)
I would rather.... (Score:5, Insightful)
.... be fired and get rich (and maybe an employer that respects me), than to be forced to sell the valuable stocks that I personally contributed success to.
In truth, those with pre-IPO stocks are the foundation of the success for the company; what we are seeing is absolute disrespect to those who are responsible for the success.
Re:I would rather.... (Score:5, Insightful)
From a legal perspective, it seems stupid to approach people and ask them to to surrender their shares. Firing them straight up if they are truly "MIA" as Pincus claims would be justifiable. There's nothing wrong with letting go an employee who doesn't meet expectations. Asking them to surrender their shares, THEN firing them makes your motivations clear.
This simply confirms that Zynga is a company with no morals.
Re:I would rather.... (Score:4, Interesting)
I am no lawyer but this sounds like a break in promissary estople. Basically, if someone gives you advice and you make a decision based on that advice and it causes financial harm on yourself you can sue to recover the losses.
They were promised IPO shares and to top it off they acted on it by buying them and taking employment. Now they get to lose them after they took their advice and financial harm because I doubt they would buy them back + they could have worked for someone else who *would* give them pre-IPO.
To top if off you are fired that is a financial loss too, but you were fired because you took a promise of IPOs which you were denied.
A lawyer would be drooling on this. CEOs are assholes and are known to do these things and sleep well at night and not care. The CEO could devalue everyone elses share to $0, but keep his high of course using accounting tricks. That is legal and a better thing to do if you want to be evil and steal. I hate to break it but no company has morals and only look at you as mathmatical functions that bring in money. Your sole existence is to make someone richer in corporation and they only care about money. I hate laywers but here this is good as it would force employers to fullfil their bargins they made when the CEO was a little guy and needed help.
Re: (Score:3)
Re:I would rather.... (Score:5, Interesting)
Re:I would rather.... (Score:5, Informative)
Disclaimer: IANAL. You lose unvested shares if you're fired or if you quit. You can still buy vested shares at the original strike price for up to, I believe, thirty days after termination.
Whether you'd want to after getting screwed so royally is another matter, but chances are there's still money to be made (recovered may be a better term) if you keep emotion out of it and dump them just after the IPO, especially if you got in early enough and have the options at a favorable strike price. In fact you might not need to wait until they go public; there are plenty of secondary markets for privately-held stocks. The company probably has the right of first refusal in that case, but you still get paid the same amount; they just get to buy the shares back at the agreed-upon price instead of you doing business with the original buyer. This is in effect what Zynga's trying to do, but without actually paying to get the stock back.
Re:I would rather.... (Score:4, Insightful)
It's the unvested shares, so percentage held doesn't enter into it.
Re: (Score:3)
Your premise is basically correct, but the use of the word "advice" was somewhat improper. It's if someone promises you something - for example, if you call a charity and promise to give them $10,000, and they then hire a contractor to build them a new food shelf building, and you then refuse to give them the money, they can sue you under p.e. to force you to follow through with your promise.
Just giving someone advice ("hey, you should think about building a castle in this swamp!") does not mean that someon
Re:I would rather.... (Score:4, Informative)
As an owner of a corporation and one who cares about his employees, I can tell you that you paint a broad brush. "I hate to break it but no company has morals and only look at you as mathmatical functions that bring in money. Your sole existence is to make someone richer in corporation and they only care about money."
Maybe I'm bad at business but I pay my employees well over the going rate and *gasp* care about them. There could come a point where, mathematically, I would have to let some go in order for the company to continue in bad times but I would take no delight in it. At some point the goal is to keep a business running unless you think that it would be better if everyone should get fired if you go bankrupt.
Re:I would rather.... (Score:4, Informative)
Apparently the reason they used this trick instead of diluting the shares is because they didn't want to dilute all the shares (well, maybe they did that too), they wanted to get stock back from a few employees (it seems mainly executives, actually) who were 'non-contributors.'
Still seems like a lame move. When the money flows like it does from an IPO, let it flow to everyone. When you have a billion dollars coming in, paying the lowly janitor a million isn't going to hurt much. Be generous.
Re:I would rather.... (Score:5, Insightful)
Also, the cited reason "we want to avoid a Google Chef situation" - what is wrong with a Chef making $20M off of working at a high-risk low reward company at the early stages? What did Mark Zuckerburg, or Bill Gates for that matter, do that justifies the magnitude of their fortunes? It's all a lottery, Zynga should be happy for their winners, even the ones who don't look like they deserve it. If those lucky people had all turned their backs on Zynga in the early days, Zynga would probably have failed hard - the promise was to share in potential IPO spoils, keep the promise or have your CEO report to the State Penitentiary for fraud.
the firm's executives reportedly justified their strategy by saying it was best for the company. With the unvested shares, the executives believed they could attract more top talent with the promise of stock.
What's best for the company is to conduct business within the law, meet your contractual obligations. If I would start a plumbing business, hire a bunch of journeymen plumbers for stock, then claw back the unvested shares from the low performers because it's "better for the business" to make those shares available to new plumbers who might perform better, what would the judge say to that?
Also, what lowlife idiot would sign up for a promise of stock from a company that has already done this to former employees?
Re:I would rather.... (Score:5, Insightful)
What the CEO who had to work up to 6 whole hours a day in his lavish office with those 2 hour lunches and games of golf shouldn't take the credit. It was his and the upper managements ideas that created the company. Just like all the bank CEOs who work really hard producing things of value we take for granted. They need to be paid for such a hard life and creating all sorts of innovation. Thoughts magically create products and they call come from managers, directors, and CEOs only! Get with the program and when I say work you say minimum wage, you are costing the shareholders money!
Re:I would rather.... (Score:5, Informative)
Re: (Score:3)
No. AFAIK if they don't give ownership of the shares back, they get to see their company ownership grow, even if they are fired.
Re: (Score:3)
From TFA.
Re:I would rather.... (Score:4, Insightful)
Mr. Pincus' employees need to start wearing voice recorders to meetings.
Re:I would rather.... (Score:5, Interesting)
No. AFAIK if they don't give ownership of the shares back, they get to see their company ownership grow, even if they are fired.
That's not how that works. Contracts with unvested stocks always involve, "you must work with the company until such and such date" clauses. They get fired, they lose the stocks.
So yeah, sue the bastards.
Re:I would rather.... (Score:5, Interesting)
In TFA, they stated that employees were told if they were fired they would lose all stocks.
I think we'd have to see how that played out in court. But I think if I promise you something as part of a job contract and then threaten to fire you instead of meeting that contract, then you'd have a fine advantage when it comes to suing my pants off.
Also, I wonder if they expected this to become public? Somehow I doubt it.
Re:I would rather.... (Score:5, Insightful)
These were not the hallmarks of a large, successful company in the 1950s, 60s or 70s.
There, fixed that for ya. Ever since the "greed is good," "buy the company cheap, break it up into pieces and sell it for a profit," trickle down '80s, corporate morals have been on greased skids to hell. I hope Occupy succeeds in turning this around, if they don't it will only be a more painful correction for everybody when it eventually does come.
Fearing the chef. (Score:5, Insightful)
Fearing a Google Chef situation?
What... a competent professional working at the company over a long period of time demonstrating a high level of skill, overseeing, directing and training many others, and earning the respect of his colleagues?
Is this kind of thing bad now?
Illegal? But surely still lose lose? (Score:5, Interesting)
I can't imagine how an action like this can be legal in terms of anyone wanting to take it to court - surely the employee would win hands down, but I can't also see how it would be beneficial in the long run. Srely if you took your employer to court like this (and assuming you won) and went back to work - surely the culture there after that must be very antagonistic. Wouldn't the employer then be looking for any excuse and going through all the hoops to have that person leave the company anyhow.
The only way I can imagine to pursue this would be to take them to court, win (I assume quite easily) and then start looking for another job as the workplace has become hostile - which sort of leads to where they are going in the first place... "Give it back or you are fired" OR "Ha, I won, now I need to find other work...". It just seems to be a half dozen here and six there.
Re:Illegal? But surely still lose lose? (Score:5, Insightful)
You take them to court and as part of the settlement/compensation you get vesting of your unvested options because you cannot return to a hostile work environment.
Re:Illegal? But surely still lose lose? (Score:4, Interesting)
Different in this case. (Score:4, Funny)
Given that it is Zynga the employer may hire you based on that fact that you did sue them.
Not following the Google Chef reference (Score:3)
Were they really upset about that guy? Sounded like he did top-notch work from the Wikipedia references.
Re:Not following the Google Chef reference (Score:5, Informative)
One of the first financial press conferences before (after?) the google IPO was by their CFO.. Chielf Food Officer, back in February 2005.
Google was proud of announcing the number of eggs they were cooking each day for their employees. Wall Street was pissed by their lack of respect.
http://www.nytimes.com/2005/02/10/technology/10google.html?ex=1266123600&en=60d19019bb842d20&ei=5088&partner=rssnyt [nytimes.com]
Re:Not following the Google Chef reference (Score:5, Interesting)
I think it is class prejudice in the modern world. I don't think there is a problem with the chef in Google, but other executives look at a working class man who risked his career with a start-up and received a very large reward and think that should not be right. To them, working people should stay in their class where they belong and not become multi-millionaires regardless of the risk and hard work they took or did.
It sounds to me like those people who give lottery tickets as a gift and then sue the recipient for a share when the tickets turned out to be big winners - because they say they did not mean to give so much to the recipient.
Truly bizarre and illogical in my view.
Re:Not following the Google Chef reference (Score:4, Interesting)
in an ideal world you'd be compensated equal to your merit and not your hire date.
That's how it worked out in practice if you account for the risk factor. Those people who came to work at Google early on were working for a startup, with all the risks that entailed. It's a risky proposition, considering how many startups fail for each one that succeeds (and the employees of those startups then have to look for a new job, which they may not be able to easily find - and even if they do, may well incur additional relocation expenses etc). But anyone can gamble that way, there's no significant barrier of entry here. So I don't see why I should envy someone who took that gamble when I did not - we had equal chances in that regard, I chose to play safe for a guaranteed small reward, he chose to play risky for a non-guaranteed large reward. Fair's fair.
Dangerous precedent (Score:5, Insightful)
Next thing you know, their employees would be asked to pay back portions of their salaries that management thought are undeserved.
Re:Dangerous precedent (Score:5, Funny)
Imagine boards of directors giving ultimatums like this to underperforming CEOs.
So they want to have employees with a grudge? (Score:3)
They're going to make some of their employees very disgruntled. Their company depends on keeping a bunch of servers running. Am I the only one who sees the potential reliability problem here?
Dont judge without reading TFA carefully (Score:3, Informative)
From TFA, the small minority of employees asked to return the stocks are executives, not engineers, architects or the creative folk.... Most executives don't deserve what they get paid in USA. Most of them just lunch off of the productivity and manipulate for their personal gain. There's a term for that in the nature. It is called a parasite.
He is doing the right thing. So let's not be quick in judging him. ok ?
Re:Dont judge without reading TFA carefully (Score:5, Insightful)
He is doing the right thing. So let's not be quick in judging him. ok ?
Then he shouldn't have promised that to them. It's classic renege on a contract. Doesn't matter if they're parasitic executives or not.
Re:Dont judge without reading TFA carefully (Score:5, Insightful)
a quick googling of "zynga ethics" will allow you to make a quick judgement of what we're dealing with here. Pincus is setting new standards in rapacious business practices. This is nothing to shrug off, somehow this guy needs to be spanked.
My father said (Score:5, Insightful)
"Son, in life or business, always remember, you dance with the person you brought".
This is a basic point of honor - you keep to the commitments you made.
More expensive than you thought it would be? Tough, honor it.
Harder than you thought? Tough, honor it.
See something else that's better? Tough, honor it.
Yes, I know, business isn't about honor, it's about profit. I simply feel there is no profit in being dishonorable, no matter how much money you can make. No Sir, "Greed is good" in not in my orison. You know the good companies in your life. Go look at their mission statement. Top one is "To serve our customers/community". You also know who the bad companies are. Look at their mission statements. The honest ones list "Increase shareholder value" as first. The dishonest ones say "To serve our customers/community". In the end, it isn't about what someone says, it's what they do. Actions don't lie. Words can.
That is why I will listen closely to what someone says, but I pay more attention to what they do.
In a perfect world, someone would whisper this in Sony's, RIAA's, MPAA's, ASCAP, AT&T's, and many others ears:
"Honor is a lasting value.
Try it.
For a change."
Clarification of how stock agreements work (Score:4, Informative)
Most of the articles/commenters have used very imprecise language about the nature of what Zynga is asking their employees to give up.
When you join a tech startup you are granted the option to buy some number of shares of the company's stock at a certain price (which, when you join very early, is incredibly low compared to what it will be when the company is sold/goes public). To prevent people from taking the job for a day, buying all their shares, and leaving, the options become available ("vest") on a schedule such that you are able to buy some additional percentage of your shares every additional month you work there. Additionally, in most agreements, your options stop vesting (obviously) but also evaporate within a few months after you leave a company (so you can buy the vested shares or just get nothing).
Note that they're still just options until you actually exercise them (buy them for the low option price).
It sounds like the Zynga employees are being asked to forfeit unvested shares - not only have the employees not yet paid to own these shares, they haven't even worked at the company long enough for those shares to be available for purchase (that's what an unvested share is). This is not like Zynga taking money or any other assets from their employees - they're just modifying an agreement that's part of their compensation. It's most closely equivalent to having been promised an incredibly large bonus in the future and then them telling you that you'll be fired if you don't agree to accept a lesser bonus.
It's strange that they're threatening people with their jobs here considering that there are probably much less dramatic ways to accomplish this same thing. For one thing, most stock option agreements are granted at the board's pleasure - if the board wants to cut you off at any time, they can. In that sense, there's nothing illegal (I am not a lawyer) about reducing the number of shares in someone's option agreement.
Don't get me wrong - this is a dick move that's congruent with Zynga's less-than-stellar history of ethics. As someone who works for a tech startup, I'm scared that something similar would happen to me/lucky that I work for good natured people.
Who are the backers of Zynga? (Score:4, Insightful)
As a Sili Valley engineer, here is what I want to know: Who are the VC's and board members behind Zynga that told the CEO that this was a good idea? I want to avoid any company that those clowns are involved with. This is not how Silicon Valley works. Stock options are part of the compensation. At two companies I worked at, the stock options turned out to be worthless. That happens a lot. When the options turn out to be worth something, you darn well better let me keep them. If you don't do that, there is no way in hell that I will ever work at any company that any of those VC's or other financiers are involved with, fuck you very much. That is the Silicon Valley social contract. The clowns that did this need to be outed and ostracized.
Grim Trigger (Score:4, Informative)
Zinga will still attract talent, but the contracts will have thicker prose about termination and vesting conditions, so it will be much harder to pull this stunt a second time. But perhaps at this stage of growth they are beyond that.
I watched Politics, Strategy, and Game Theory [academicearth.org] last night, which talks about Grim Trigger and the conditions under which, in iterated prisoner's dilemma, you care more about the future than defecting in the present moment.
It's a competent lecture with no great pizzazz.
Here's a fairly nice piece by an undergraduate I stumbled upon brushing up on Grim Trigger: Debunking the Prisoner(slashcode fuckup)s Dilemma [grimtrigge...theory.com] on Robert Axelrod(slashcode fuckup)s Emergence of Cooperation among Egoists and why cooperation is a lot more common than the shallow analysis would have you believe.
I really wonder what payoff matrix he constructed to author that blog under no fixed identity. I found a Tweet referencing the site by the apparent author with one or two clues about his circumstance.
The punishment for Zynga in future iterations are employment contracts with a lot less room to wiggle if they screw up future hires. The reward in the present iteration is yanking back a substantial chunk of the entire company.
If the quiet vestors really aren't showing up and pulling their weight, it doesn't seem great to let them get away with that either. I don't think Zynga's presumption is that they can't fight this, but more like "the effort involved will be a shock to their lazy asses" so they are likely to settle without going ten rounds.
Are these people serious? Read the article linked (Score:5, Insightful)
I'm not making this up! They seriously said this:
Although Zynga's decision might be met with some criticism, the firm's executives reportedly justified their strategy by saying it was best for the company. With the unvested shares, the executives believed they could attract more top talent with the promise of stock.
Who in their right mind would trust their upper management to actually deliver?
"Hey! We lured in our initial staff with some stock options, but then we strongarmed it back from them once it looked like it might be worth something. They took the gamble and we got the payoff. Now we would like to offer it to you! No, really, honest - we wouldn't do that to you! Just the people we initially hired. Hey...wait...where are you going?"
Be very very careful with stock option offers (Score:4, Informative)
I once got a job offer several years ago that included stock options, because the salary was below market. The catch was the offer merely said "stock options" and gave no terms whatsoever. WTF! That's like saying they would give me a salary compensation without saying how much. I explained to the recruiter that was trying to hire me that I had to interpret the options part of the offer as "1 share per year, vested in 10 years". He said it would be a lot more than that. I asked him how much more. But he only said that they were still working out the details with the lawyers. So I declined the offer. They later went out of business, so I guess they must have had trouble doing a lot of things right.
If you get an offer with stock options, you need to know exactly what the terms are. And technically, you should understand the risks, including the risk of the company going under. And to do that properly you need to look at the business plan and financials. You almost certainly won't get to see the latter unless the offer is for CFO or CEO. If you're sure the company will succeed, then you at least need to know the terms to know how much you could get out of it, and the risks they will cheat you.
If I get fired... (Score:5, Insightful)
do I get to keep my stock options?
Because, honestly, that seems like the better option here. Not to mention the money I will recoup when I sue you for wrongful termination.
They want them back to give to new hires??? (Score:5, Insightful)
According to the article they want to take the stock options back so they can use them to attract new employees.
Surely the act of taking them back greatly reduces the attractiveness of any future options Zynga issues?
Re:Pincus (Score:5, Insightful)
Unfortunately, these slimeballs are smart enough to figure out ways to screw their employees, their customers, and in fact anyone with a dollar in their pocket.
Too bad for the honest hard working startups that are prepared to do the hard yards and get their just rewards. This will definitely have ripples of distrust that permeate deeply.
Re:Pincus (Score:5, Interesting)
Totally true, they have a very strange history, from their funding coming from the Russian mafia, to the events of today.
The place itself is supposedly a real grid to work in, so it is likely all these employees deserve their options. However, management always holds the power in situations like this, and more importantly, the investors that control management. If they are indeed controlled by the Russian mafia, isn't it better that these programmers give up their stock options rather than lose fingers?
Re:Pincus (Score:4, Interesting)
Agreed, f*ck Zynga. Boycott, anyone?
Re:Pincus (Score:4, Funny)
what do they do again?
Re:Pincus (Score:5, Insightful)
FarmVille, etc. I already boycott based on lack of interest in the product.
Re:Pincus (Score:5, Interesting)
Up until 2006 or so, I used to get mod points regularly, every week.
Then suddenly I stopped getting mod points. That was about 5 YEARS ago.
*Nothing* for 5 YEARS.
Then, suddenly, yesterday, I got some again.
What the hell kind of algorithm can lead to a 5 YEAR hiatus in mod point allocation?
Comment removed (Score:4, Interesting)
Re: (Score:3)
The better lesson is probably not to go to work for people who are well known douche-bags. Seriously, if you couldn't see this kind of thing coming when you went to work for Zynga, you really weren't paying attention.
Re:Don't Kid Yourself (Score:4, Insightful)
They're cutting the deadwood. It will get ugly, but that's where the execs earn their lavish compensation. Anyone worth their stock will not be touched. This is the most depressed economy since the 1920s. I expect tactics like this to be the norm for at least a decade. What are 25 million unemployed going to do, strike?
Look at history. When this happens bloody revolution is the norm. I hate violence. So I'd hope you're wrong.
Re:It's Zynga seems, not "Zynga seem"! (Score:4, Informative)
In British English, the proper conjugation is to treat companies and other organizations as plural. A google search for the submitter, ardmhacha, gives results which are all related to Ireland. Thus he was writing correctly.