4 ms·

Schappert successfully dumped (at least) $3.9 million in stock earlier this year. Last week he was stripped of responsibility for overseeing new games. Sounds

Schappert successfully dumped (at least) $3.9 million in stock earlier this year. Last week he was stripped of responsibility for overseeing new games. Sounds like as good a time as any to leave. http://venturebeat.com/2012/08/01/zynga-more-lawuits-coo-demoted/ http://venturebeat.com/2012/08/01/zynga-more-lawuits-coo-dem...

ChuckMcM 14y ago
Yup, probably got to keep half of it after taxes, and of course once you're no longer an insider it becomes easier to sell any remaining holdings without triggering SEC rules. I think he is still named in a couple of the class action suits though, so its not like he will have a lot of free time. I am morbidly curious about how lawyer's fees are handled. Normally if you're being sued in connection with something you did for the company, the company hires a lawyer to represent you, but how does that work if you're not working the company any more?
- cluda01 14y ago
  Logically it would seem that the company would provide counsel because at the time of the alleged incident you were conducting business for the company. This is all laymen speculation of course. Any lawyers around?
- jfoutz 14y ago
  Odds are good he held the stock for more than a year and a day.
  - ChuckMcM 14y ago
    Well this reference [1] says that Schappert started at Zynga April 21st of 2011, and this reference [2] puts that secondary offering where he sold $3.9 million in stock at March 23rd, 2012. That is about a month shorter than a full year. Am I missing something? [1] http://techcrunch.com/2011/08/21/another-ea-exec-jumps-ship-to-zynga-jeff-karp-joins-as-chief-marketing-and-revenue-officer/ http://techcrunch.com/2011/08/21/another-ea-exec-jumps-ship-... [2] http://venturebeat.com/2012/07/31/first-zynga-stock-sell-off-insider-trading-lawsuit-filed/ http://venturebeat.com/2012/07/31/first-zynga-stock-sell-off...
    - jfoutz 14y ago
      Weird. his last day at EA was april 25. [1] I would guess he got the stock when he accepted the offer from zygna, not his first day. Of course, maybe you're right, and he makes million dollar mistakes like like that all the time. If that's the case, good for zygna for getting rid of him. [1] http://investor.ea.com/secfiling.cfm?filingID=1193125-11-108629&CIK=712515 http://investor.ea.com/secfiling.cfm?filingID=1193125-11-108...
      - jellicle 14y ago
        It's not a mistake to sell the stock as quickly as you can if you anticipate a massive drop in the stock price. Which as an insider, you're in a position to do. Let's see, stock price went from $13 to $3, so yes, he's way ahead, even if he pays more taxes.
        ChuckMcM 14y ago
        True and since the pre-planned sale was at $12 and the current price is $3, assuming the stock scaled the same his $3.9M payday would have been a $975K payday, $480K after taxes. Quite the difference. And of course if you were one of those folks who were forced to give back options [1] before the IPO, you are probably pretty pissed off. [1] http://news.cnet.com/8301-13506_3-57322150-17/zynga-to-employees-give-back-our-stock-or-youll-be-fired/ http://news.cnet.com/8301-13506_3-57322150-17/zynga-to-emplo...
- mnutt 14y ago
  I'm not a lawyer, but the way I've seen it play out is that the company will usually represent the person if they're co-defendants. Unless his interests and the company's diverge at some point, in which case he will want get his own counsel. I have seen the company pay a former employee's separate legal costs, although I don't know how rare that is.
- vampirechicken 14y ago
  Half of it? Is he not in the US? Isn't US capital gains tax 15%? Surely that means he kept 85% after taxes.
  - ChuckMcM 14y ago
    He held it less than a year, it is ordinary income, so 38% to the fed and 11% to the state (49% total) and with that amount of income on the adjusted gross income line he gets no deductions.
    - vampirechicken 14y ago
      If I only got to keep 2 million of my four, I'd cry all the way the bank. Thanks for the correction. I don't do Schedule D stuff anymore, so I'm not hip to the lingo.

ChuckMcM 14y ago

Yup, probably got to keep half of it after taxes, and of course once you're no longer an insider it becomes easier to sell any remaining holdings without triggering SEC rules. I think he is still named in a couple of the class action suits though, so its not like he will have a lot of free time. I am morbidly curious about how lawyer's fees are handled. Normally if you're being sued in connection with something you did for the company, the company hires a lawyer to represent you, but how does that work if you're not working the company any more?

cluda01 14y ago
Logically it would seem that the company would provide counsel because at the time of the alleged incident you were conducting business for the company. This is all laymen speculation of course. Any lawyers around?
jfoutz 14y ago
Odds are good he held the stock for more than a year and a day.
- ChuckMcM 14y ago
  Well this reference [1] says that Schappert started at Zynga April 21st of 2011, and this reference [2] puts that secondary offering where he sold $3.9 million in stock at March 23rd, 2012. That is about a month shorter than a full year. Am I missing something? [1] http://techcrunch.com/2011/08/21/another-ea-exec-jumps-ship-to-zynga-jeff-karp-joins-as-chief-marketing-and-revenue-officer/ http://techcrunch.com/2011/08/21/another-ea-exec-jumps-ship-... [2] http://venturebeat.com/2012/07/31/first-zynga-stock-sell-off-insider-trading-lawsuit-filed/ http://venturebeat.com/2012/07/31/first-zynga-stock-sell-off...
  - jfoutz 14y ago
    Weird. his last day at EA was april 25. [1] I would guess he got the stock when he accepted the offer from zygna, not his first day. Of course, maybe you're right, and he makes million dollar mistakes like like that all the time. If that's the case, good for zygna for getting rid of him. [1] http://investor.ea.com/secfiling.cfm?filingID=1193125-11-108629&CIK=712515 http://investor.ea.com/secfiling.cfm?filingID=1193125-11-108...
    - jellicle 14y ago
      It's not a mistake to sell the stock as quickly as you can if you anticipate a massive drop in the stock price. Which as an insider, you're in a position to do. Let's see, stock price went from $13 to $3, so yes, he's way ahead, even if he pays more taxes.
      - ChuckMcM 14y ago
        True and since the pre-planned sale was at $12 and the current price is $3, assuming the stock scaled the same his $3.9M payday would have been a $975K payday, $480K after taxes. Quite the difference. And of course if you were one of those folks who were forced to give back options [1] before the IPO, you are probably pretty pissed off. [1] http://news.cnet.com/8301-13506_3-57322150-17/zynga-to-employees-give-back-our-stock-or-youll-be-fired/ http://news.cnet.com/8301-13506_3-57322150-17/zynga-to-emplo...
mnutt 14y ago
I'm not a lawyer, but the way I've seen it play out is that the company will usually represent the person if they're co-defendants. Unless his interests and the company's diverge at some point, in which case he will want get his own counsel. I have seen the company pay a former employee's separate legal costs, although I don't know how rare that is.
vampirechicken 14y ago
Half of it? Is he not in the US? Isn't US capital gains tax 15%? Surely that means he kept 85% after taxes.
- ChuckMcM 14y ago
  He held it less than a year, it is ordinary income, so 38% to the fed and 11% to the state (49% total) and with that amount of income on the adjusted gross income line he gets no deductions.
  - vampirechicken 14y ago
    If I only got to keep 2 million of my four, I'd cry all the way the bank. Thanks for the correction. I don't do Schedule D stuff anymore, so I'm not hip to the lingo.