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David, It just so happens that I use your company's product. Given your comment, should I expect that you'll renege on your commitments to your customers when

David, It just so happens that I use your company's product. Given your comment, should I expect that you'll renege on your commitments to your customers when it becomes inconvenient for you?

davidu 12y ago
Of course not. But I prevented sales from signing a 5-year contract last quarter because I didn't want to be committed to the terms of a specific deal for 5 years. The most we'll do is 3 years just so that I don't get put into a position of supporting a customer who is no longer a customer we want to serve. But we have let customers break contracts over small things in the past. Contracts are only as good as the people behind them, and we think we're good people. It happens. We always strive to do what's right for our customers. Also -- I've never done what Marc did, I'm just saying I can sympathize with the desire and that I think most of the press took a very slanted view of it, because it's the easy way to view the situation. My point was that I think the reality is more nuanced. I don't know Marc. Maybe he's an asshole. Maybe he's a great guy. Or maybe he thought this was a way to keep people on the team in a way that made sense to him.
- GabrielF00 12y ago
  I'm having trouble seeing this as nuanced. As I understand it from the WSJ article, Zynga signed a contract with some employees, giving them X number of RSUs. Later, before these RSUs vested, they threatened the employees with termination unless they gave back some of those RSUs. Coercing someone via threat into modifying a contract is, literally, a Darth Vader tactic ("I am altering the deal. Pray I don't alter it any further.") I understand that, from Pincus' perspective (1) these employees didn't turn out to be as critical to the company as their initial grant might have suggested, and (2) the equity was needed for other purposes. However, that's the risk that Pincus took in signing these contracts in the first place. My understanding is that when you sign a contract with someone you are required to act in good faith to see that all parties receive the benefits agreed upon in the contract. Threatening to fire someone unless they give up a benefit is not acting in good faith.
  - davidu 12y ago
    But the reality is that this happens all the time, and people just fire the employee. He was trying to reconcile the "need" to fire the person for being compensated above their actual performance vs. wanting to simply renegotiate the compensation in light of their performance. And worth pointing out, every article highlights it only applied to UNVESTED stock... whatever they already vested was theirs. My point is that it is nuanced. He was retroactive in the sense that he wanted to re-offer them their UNVESTED stock, but he never requested anything already vested. And there are lots of reasons why this would happen. Historically the choices have been "fire" or "suck it up" and he looked for a third. I just don't think it's as heinous as people have made it out to be. It feels really insensitive and almost gordon gecko'esque, and maybe it was, I'm just pointing out there could be more considerate points of view that recognize the challenge of having an overpaid employee who isn't performing, but you don't quite want to fire. If you fire them, maybe they can't afford to exercise their options and are left with absolutely nothing. In that scenario, simply renegotiating unvested options and letting them continue to be employed so they aren't forced to exercise is SO MUCH BETTER for that employee.

David, It just so happens that I use your company's product. Given your comment, should I expect that you'll renege on your commitments to your customers when it becomes inconvenient for you?

davidu 12y ago

Of course not. But I prevented sales from signing a 5-year contract last quarter because I didn't want to be committed to the terms of a specific deal for 5 years. The most we'll do is 3 years just so that I don't get put into a position of supporting a customer who is no longer a customer we want to serve. But we have let customers break contracts over small things in the past. Contracts are only as good as the people behind them, and we think we're good people. It happens. We always strive to do what's right for our customers. Also -- I've never done what Marc did, I'm just saying I can sympathize with the desire and that I think most of the press took a very slanted view of it, because it's the easy way to view the situation. My point was that I think the reality is more nuanced. I don't know Marc. Maybe he's an asshole. Maybe he's a great guy. Or maybe he thought this was a way to keep people on the team in a way that made sense to him.

GabrielF00 12y ago
I'm having trouble seeing this as nuanced. As I understand it from the WSJ article, Zynga signed a contract with some employees, giving them X number of RSUs. Later, before these RSUs vested, they threatened the employees with termination unless they gave back some of those RSUs. Coercing someone via threat into modifying a contract is, literally, a Darth Vader tactic ("I am altering the deal. Pray I don't alter it any further.") I understand that, from Pincus' perspective (1) these employees didn't turn out to be as critical to the company as their initial grant might have suggested, and (2) the equity was needed for other purposes. However, that's the risk that Pincus took in signing these contracts in the first place. My understanding is that when you sign a contract with someone you are required to act in good faith to see that all parties receive the benefits agreed upon in the contract. Threatening to fire someone unless they give up a benefit is not acting in good faith.
- davidu 12y ago
  But the reality is that this happens all the time, and people just fire the employee. He was trying to reconcile the "need" to fire the person for being compensated above their actual performance vs. wanting to simply renegotiate the compensation in light of their performance. And worth pointing out, every article highlights it only applied to UNVESTED stock... whatever they already vested was theirs. My point is that it is nuanced. He was retroactive in the sense that he wanted to re-offer them their UNVESTED stock, but he never requested anything already vested. And there are lots of reasons why this would happen. Historically the choices have been "fire" or "suck it up" and he looked for a third. I just don't think it's as heinous as people have made it out to be. It feels really insensitive and almost gordon gecko'esque, and maybe it was, I'm just pointing out there could be more considerate points of view that recognize the challenge of having an overpaid employee who isn't performing, but you don't quite want to fire. If you fire them, maybe they can't afford to exercise their options and are left with absolutely nothing. In that scenario, simply renegotiating unvested options and letting them continue to be employed so they aren't forced to exercise is SO MUCH BETTER for that employee.