21 ms·

Mark Pincus memo to Zynga employees

• tzs 15y ago
  That didn't really say anything. Perhaps someone could find another company that has threatened firings unless employees give back options, and Pincus can copy their CEO's memo to employees.
  • sixtofour 15y ago
    "That didn't really say anything." Actually it did. He mentioned that "leveling up" is part of the culture, which I read as a passive/aggressive way for him to both mention and justify the clawbacks. "Those people just weren't able to level up."
    • VladRussian 15y ago
      a nice spin to get support of the majority of the employees against the supposedly unfair overcompensated "old guard" minority. Playing on the low instincts of people seems to be an art mastered by Pinkus.
      • sounds 15y ago
        Yes, but it probably will backfire now, with all the publicity. One Pinkus fail: acknowledging the bad press. He should take a page from politicians: deny, no comment, and deny. Most of "the guys" will listen to the moderate voices, and will probably only join a suit if it's class-action.
    • jsavimbi 15y ago
      As an aside, I think that you would have to look at the individual cases and determine what the circumstances were for each as from what I'm reading it wasn't a blanket clawback. In the case of someone hired but who wasn't really as qualified as they represented themselves to during the interview process, then it would be understandable if they were summarily fired. No options, no nothing. Same would go for an individual who retired while still at the office. They're a cancer and you can't keep them around. I cannot see these types of people being reassigned. Oddly enough, some of those people are actually kept around, but that's another story. But in the case of someone who was promoted to a level of responsibility beyond their capabilities, after working at the company for some time, I could see management clawing back those options and benefits given to them in addition to the ones they were originally at the time of their initial employment. However, and if I'm understanding what is being written about Mr. Pincus, going after those options deemed excessive which were granted to early employees for the sole purpose of not having them participate in an equitable share of the profits of a stock sale, well, that's fraud. And Mr. Pincus had better hope that only a very minimal paper trail exists of those employee agreements. Very minimal.
  • damoncali 15y ago
    It said volumes. In effect, "we don't care what we said, we believe so strongly in a meritocracy that we are going to go back on our word. You work for me at my whim." Must be a horrible place to work.
    • einhverfr 15y ago
      It said to me: "We believe so strongly in 'meretrocracy' that we have gone from pretending to be 'meritorious' to being 'meretricious.'" Ok, I made up meretrocacy. It's derived from the L. 'meretrix' meaning 'prostitute.' Meretricious however is in the dictionary, and even my spellcheck!
    • rhizome 15y ago
      And the big takeaway from that is that merit at Zynga is not measured by whether you fail to live up to your promises.
      • damoncali 15y ago
        Seems to me that in a meritocracy, if executives give away stock in excess of what is required, they are the ones who have performed poorly.
        • rhizome 15y ago
          It's kind of the Big Lie in all this hoopla.
• _delirium 15y ago
  I'm glad to hear that anyone at Zynga is meritocratically given a chance to lead, rather than it being based on how early someone got in. Looking forward to hearing more about the process that will be used to determine whether Pincus should stay on and retain his shares, or whether he should be replaced with a different leader.
  • sbashyal 15y ago
    Early employees were given certain number of stock options based on what Zynga was valued at that time. They should not take it back now, period. They can implement any policy going forward but it's taking the stock options from early employees is a problem. Early employee should not be treated as stepping stones and the "meritocracy" ploy is just that.
    • danssig 15y ago
      I think the parent was saying he would love to see Pincus' own rules applied to Pincus.
• grandalf 15y ago
  edit: why downvote this? I've just expressed confusion that a cooperative outcome could not be reached. While it's reasonable that Pincus wants to find some way to obtain more shares other than buying them, sending an email like this could not be beneficial to morale. If it is truly in the best interest of Pincus and Zynga to obtain the shares, then it's also in the best interest of the targeted employees to give up the shares in exchange for something else with equal or greater expected value. Since the hubbub around this reflects poorly on the firm as a whole, the employees refusing to cooperate are likely shooting themselves in the foot, though it also seems that Pincus has blundered significantly. Pincus at least seems to be acting rationally about the future of Zynga, while the employees (even if they have reason to be annoyed by this) come off as being motivated purely by greed, spite, and short-term considerations.
  • VladRussian 15y ago
    >while the employees ... come off as being motivated purely by greed, spite, and short-term considerations. man, how joining an early stage startup many years ago at the comparably lower salary, yet with comparably large option grant makes the person to come off as "being motivated by short-term considerations"?
    • grandalf 15y ago
      Well, if the stock is needed now by Pincus to grow the company and he's hamstrung without it, then by not agreeing to a reasonable deal the employees are threatening the future of the company and their own future wealth just out of greed. What difference does being worth $200M on paper vs $100M on paper make? It only matters to someone who isn't thinking rationally about Pincus's options and the fundraising realities of the company. Being an early employee should not entitle a person to sabotage the company's future just b/c the founder made a mistake, whether that mistake was being too generous with option grants, forgetting to change a password, revealing a secret about one's personal life, etc. Sabotage is sabotage. Creating the hubbub is essentially an attempt to blackmail Pincus and the company's current investors into complying.
      • 15y ago
• zerostar07 15y ago
  This sounds surreal. It's like the Godfather telling his family how ethical they all are. Cosa nostra ethics of course ... what happened to the good old "every dirty trick in the book" days?
  • VladRussian 15y ago
    > what happened to the good old "every dirty trick in the book" days? he's got to the end of the book, and this is him writing new chapters to the book :)
• earl 15y ago
  These employees were given options for some combination of performance and risk / opportunity cost from taking an early job in an unproven startup. For Pinkus to renegotiate with only the former in mind while ignoring the latter is bs. These employees need lawyers. But such self-dealing is what you would expect from someone like Mark; I can't understand how anyone believes someone involved in lead-gen scams the way Zynga was retains any ability to claim to be ethical, and particularly to be "proud of the ethical and fair way that we've built this company."
  • gm 15y ago
    Funny... How's the conversation with the lawyer going to go? "Ok, so you're employed at-will. You are only talking about losing your unvested shares. Your employer has the option to fire you and prevent you from vesting anymore shares, yet he is keeping you on board and wishes to renegotiate the matter of your remaining unvested shares.. Do I have that right?" "Yes. I want to remain employed, and I want to vest all my unvested shares" "You realize your employer can perfectly legally just fire you and you will not vest any shares at all, right?" "Yes, but I want to get all the shares I'm entitled to" "I realize that, bu you realize your employer can perfectly legally just fire you and you will not vest any shares at all, right?" "Yes, I guess they can." "You don't need a lawyer, you have no claim here at all, there is nothing I could do. The underlying assumption of your employer is that you have not been doing a good job. I'm pretty sure they have a paper trail to support their case. You will have to contest that, but first you need to get fired, otherwise there is no harm done. But once that happens the onus will be on you to prove that you were fired for an illegal reason, and that is a very high standard to meet. Very high." "Hmm, ok" "Now, let's see what 'at-will employment' means: 'The employer is free to discharge individuals "for good cause, or bad cause, or no cause at all," and the employee is equally free to quit, strike, or otherwise cease work.'" "Oh shit." "Maybe you better negotiate for your remaining unvested shares. Some shares are better than no shares. You could be getting fired right now for all I know. You could bring me in to help you negotiate, but if I were them and my employee brought in a lawyer to negotiate, I would fire him on the spot rather than play a game I don't need to play." "Damn."
    • 15y ago
• bgentry 15y ago
  This is an official memo to Zynga employees and Pincus can't even take the time to use proper grammar and capitalization?
  • tibbon 15y ago
    I've encountered more than one C-level person having absolutely terrible communication skills.
    • ry0ohki 15y ago
      I think it may be a sign of leadership. Don't waste unnecessary time with real grammar or words
      • deleted 15y ago
        [deleted]
      • rhizome 15y ago
        I think that may be true, but only as a conceit among C-levels.
  • wyclif 15y ago
    Yes, after my repulsion at the idea of Zynga clawing back early stock options, my second thought is that I can't respect a founder who writes to employees in lowercase and doesn't know how to use an apostrophe.
    • cookiecaper 15y ago
      I don't know if it's so bad. In textual communication, we don't have inflection, body language, or many of the other elements that can imbue a face-to-face conversation with certain meanings or tones. One way to convey a friendly tone can be the employment of loose-yet-intelligible grammar, spelling, and punctuation in your messages; it assumes a certain degree of familiarity and can dissuade notions of stiffness and reinforce notions of laxity. In some situations, the formality of exact punctuation and grammar can be unsettling. Perhaps discussion of something as business-like as stock options is not the time to drop the formality, but it isn't necessarily a sign of disrespect; in fact, it could be the opposite.
• mattsoldo 15y ago
  Pure spin: Pinkus is trying to make this story about merit and reward. But really its about not honoring contracts. The stock options given to employees were part of their employment contract with the firm. They were based on imperfect knowledge of future facts on both parties, i.e. taking risks. Zynga attempted to use its power to revise the contract post-hoc. If I have to negotiate a deal of any sort with Zynga in the future, I'll be wary of them honoring it.
• rbranson 15y ago
  Successfully taking risks should be rewarded in any meritocracy. Portraying employees who took a risk by working for the company before they were making money hand over fist as undeserving is wrong.
• deleted 15y ago
  [deleted]
• azov 15y ago
  Huh? This memo doesn't seem to have much substance in it. Is he just brushing it all off basically saying "WSJ is lying, now forget about it all and go back to work" or am I missing something?
  • mkopinsky 15y ago
    Note that he does not dispute the facts, just the fact that it "paints our meritocracy in a false and skewed light". "No officer, I didn't kill him, and anyway, he deserved it!"
  • praptak 15y ago
    This sounded to me much like the Soviet propaganda - what has not been said is more important that what has been. Note that he did not refute any claims by WSJ.
• mahyarm 15y ago
  Mark made the mistake of going half way in trying to accomplish his Machiavellian goal. He should of either left them be or terminated them. Or done it how it's usually done where they dilute and give the new stock to the people they like better. http://www.sebastianmarshall.com/the-failure-to-execute-kobayakawa-hideaki-and-the-fall-of-the-toyotomi http://www.sebastianmarshall.com/the-failure-to-execute-koba...
• trapped123 15y ago
  So all the sleazy policies are ok now as Zynga has been proclaimed to be a meritocracy by Mark Pincus. Nothing to see here folks, please move on!
• dendory 15y ago
  So he's basically confirming the rumor, by saying they are a meritocracy and early comers don't get preference.. Still doesn't address the fact that if true, they got back shares that they gave out.
• fragsworth 15y ago
  The whole situation can be fairly simply explained: a conflict exists between rapidly-growing companies and their early employees. It's kind of a flaw in the way the system works, and it's not really just for pre-IPO companies. A common situation is an early "non-essential" employee receives something like 0.25% of the company, vested over 4 years. Suppose that at the time the employee is hired, this 0.25% is worth $10,000 or so ($4 million valuation). If the company manages to grow 100x in value, the company is now paying a non-essential employee $250,000/year in stock. With at-will employment, the company can legally fire them. The conflict arises because there is no legal incentive for the company to keep this employee at this point. Fortunately, it's not all that bad for the employees as long as they have some vested stock since this problem only arises if the stock value gets too high.
  • grandalf 15y ago
    Couldn't you make the same argument and say there's a similar conflict between rapidly growing companies and their early investors? After all, those investors got the shares at pennies on the dollar. Early employees who have shares are also investors, but they pay with their time and skill. I look at the vesting period as an insurance policy for the firm that an employee who turns out to be extremely valuable won't decide to quit b/c of the ongoing upside. The only incentive the company should have to keep any employee should be that employee's ongoing value to the company. Sure the founder might feel loyal to some of the employees, but his/her job is to allocate resources to pick the best talent, not to wallow in sentimentality. Even a company like Zynga hasn't "made it", there is still a lot more work to do. Firing an employee before he/she is fully vested is akin to canceling an insurance policy. You only do so if you think the insurable event(s) you were worried about are unlikely to occur.
    • fragsworth 15y ago
      To answer your initial question, an early investor is absolutely not in the same situation, because investors do not typically vest their stock over a period of time. They receive it all at once, and there are no future shares that can be withheld from them. Not to be argumentative, but I'm not quite sure how firing an employee before they vest their stock is in any way similar to canceling an insurance policy.
• michaelochurch 15y ago
  Perversely, I enjoyed reading this memo. Mark Pincus is a classic psychopath and it's always educational to observe how people like him attempt to justify themselves. The psychopath's language is usually a caricature (sometimes to the point of absurdity) of going assumptions of the culture in which he's trying to win acceptance. Though they have no values, they are skilled at picking up others' values and using them to make their actions seem acceptable. In Pincus's case, he's taking the noble concept of meritocracy and twisting it into bizarre shapes, refusing to stop even at outright fraud. Oh, and if I understand Mr. Pinkus right, people who work with food don't deserve to make money. Fucker. Judging his attitudes from his writing and actions, he'd be a natural fit for the Tea Party. Since the Tea Party and Zynga are the two malefactors most responsible for insufferable activity on Facebook, this is a natural transition for Mr. Pincus. To the screwed: sorry to hear it, but I guess this is what you get when you work for a company whose name sounds like 4th-grade anatomical slang.
  • protomyth 15y ago
    I was with you until the Tea Party comment. You are completely wrong about the motivations of the people who show up at Tea Party events. The Tea Party definitely in no way resembles the actions of Mr. Pincus. I really wish people would keep politics out of a non-political discussion especially in a way that characterizes people unfairly.
    • michaelochurch 15y ago
      The Tea Partiers are high on this idea that the country consists of "water carriers" and "water drinkers" and that society is essentially zero-sum, with cracking down on the "water drinkers" being the only solution to society's problems. Pincus's bullshit "meritocracy" justification is eerily similar. He's trying to deprive people of equity now that it's worth something, and when people point out that this is scummy, he points his finger and whines, "but they aren't pulling their weight!" That's the similarity I was trying to point out, though maybe I justified it poorly in the grandparent post.
      • 15y ago
• Macsenour 15y ago
  This is the part that scares me: "we want everyone to put zynga first and contribute to the overall success of our company...". I have a life, I want to continue to have a life. That will always be more important than my job.
  • derwiki 15y ago
    This is a little tangential for the overall conversation, but I feel that it's worth bringing up. There are many ways to get fulfillment out of life. For some, it's family, hobby, religion.. for others, work (and being productive at it) provide life fulfillment. My manager directly tells candidates thats he's looking for the latter. To reiterate: it's your business what is the most important thing in your life and it's not really fair to judge others for having different priorities.
    • cookiecaper 15y ago
      It's never appropriate for a company to presume to consume an employee's entire life. It is not OK, even if an employee is (foolishly) willing. Taking advantage of the short-sightedness of others is unethical.
• kylec 15y ago
  It seems his shift key broke halfway through
• mattee 15y ago
  He shouldn't be CEO if he can't write a memo that is free of grammatical errors.
• damoncali 15y ago
  In Pincusland, contracts are to be disregarded because of, um, you know, merit. So what about the merit of the people who gave out all those options? What about them?
• milod 15y ago
  on the lighter side http://didweipoyet.com/ http://didweipoyet.com/
• alexwolfe 15y ago
  Not sure how this memo addresses the complaint of employees being strong armed into relinquishing their stock options. Seems like a very vague and general message that didn't offer any real insite.
• fab13n 15y ago
  Those who have a material proof of the original story are going to get a looooooooooot of shut-up stock options, whether they work in the kitchen or not.
• axefrog 15y ago
  Bottom line -- if Zynga feels that an employee is not pulling their weight, they should let the employee go for that reason alone. Stock should never enter into the equation and the fact that it has shows that Pincus' motivations are not as pure as he'd like people to think.
• Mordor 15y ago
  Well, I hope Mark Pincus resigns and returns his stock options to concede his lack of merit.
• jrockway 15y ago
  Ran out of capital letters there towards the end. That's nice work, Lou.
• epo 15y ago
  It sounds like Pincus may have inadvertantly done everyone a favour in that he will make people be much clearer from now on as to what stock options really mean and what they are really worth. Sounds like trading present salary for future stock value has just got a lot less compelling a proposition.
• rglover 15y ago
  I'm all for a meritocratic culture, but sorry Mark, this has nothing to do with merit. People who believed in you joined your company early and invested in it. Irrespective of their performance, it's not their fault that their bet was right and now that you're on the verge of success, you have to pay up. Deal with it. If you're concerned about their performance, let them go based on that and not an ultimatum to return stock.
• dlevine 15y ago
  I find that the surest sign that a company is not a meritocracy is when the CEO regularly states this. Kind of like how most Communist countries are known as "The People's Republic."