Zygna: Give back your stock or see the door.
polycounter lvl 18
Report: Zynga Demands Stock Back From Employees, Threatens to Fire Them
http://kotaku.com/5858425/report-zynga-demands-stock-back-from-employees-threatens-to-fire-them
What a way to put a bad taste unto all startups. Why be underpaid with a new company and take stock options only for them to go "whoops" when they want to go public.
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The part that is sketchy is that those stock options would be offered to employees in lieu of salary. They're basically telling you that you're getting a pay cut.
Sounds like a very viable fear, worth firing people over... if you don't want no one to work for you.
I think they're actually more afraid of not getting more money for themselves when their stock goes public.
It seems like there's tons of college grads or unemployed people desperate to get their foot in the door or back in the door as the case may be.
Yup my girlfriend was one of about 10 applicants that got through to an interview stage (I don't know how many applied in total) at Leeds and I think there were another set for the south of england too, all for a volunteer job. There'll be lots of applicants for any job I imagine, paid or unpaid.
If she's still in school it's not so bad as an internship type of deal to get some experience.
As a graduate though working for free can't be fun... and I think it sets a bad precedent. At what point is the cutoff between getting paid for work and not getting paid for work? 1 month of experience? 6 months? a year?
I wish your girlfriend luck in finding something better.
EDIT:
Oh, wait a minute! I just "got it". They "pay" their new hires with "stock options"... /sigh
Thanks. Yeah shes a graduate but going into the volunteering/charity sector, so I guess you've got to do a helluva lot of free work before being able to get paid for it. Still, even if it's unpaid it's better than her cafe job which was cut down to 6 hours a week, spread over 3 days =/
Never mind... apparently it might: I think this explains it somehow, but I'm too tired from studying to figure it out now, going to sleep now...
For the record I am not at all associated with Zynga.
Stock options are nice, as they freeze the buying price of the stock from the date they are issued. But you don't get access to them until they become vested, usually in fractions over the years. If you leave before they are vested, you get nothing. If you leave and you have 2/5 vested, you have the option of buying that stock at the price you were issued the options.
Once they are vested they are yours and cannot be taken away [i think] but usually there is a clause stating you need to exercise them by a certain date.
If the company is public and you want to sell immediately for more than the cost, no money usually needs to come out of your pocket, the buying and selling happens simultaneously, so you only have to worry about the profit.
If the company isn't public, you have to buy the stock and sit on it, which can be expensive.
Another nice trick with options is that they are considered 'long term' stock even though you buy and sell them immediately, as it's based off the issued date, unlike regular stock. this locks in a much lower tax rate on it than 'short term'.
shitty thing for zynga to do. they should buy back the options if they want them that badly.
http://www.cbsnews.com/8301-505124_162-57322667/zynga-to-employees-drop-those-stock-shares/
It's very easy to jump on a story like this and draw the worst conclusion. Be it what it is, I have to say the bad thing in this is Zynga's handling of this news. They don't seem to be explaining details to the media which is leading to a lot of speculation.
From what I've read it sounds like Zynga wants to take back a portion of stock options from employees who are allegedly under performing. They are being given an ultimatum.
Choice 1:
Give some options back, keep your job, and cash in on your remaining options when the company goes public.
Choice 2:
Get fired and don't get anything.
What's happening is kind of like this:
A parent says to their child, "If you go with me to the market, I'll buy you a treat". While they are at the market, the child starts misbehaving so the parent says, "You're being bad, so I wont buy you a treat". However justified the parent feels, they are still breaking their initial promise.
In this case I don't think the employees actually bought shares. They only have options. So, no money transactions took place.
they gave out stock options as 'potential money' in lieu of salary, which means the company assigned value to the options which, in a perfect world, they would pay.
In response from your article
http://www.cbsnews.com/8301-505124_162-57322667/zynga-to-employees-drop-those-stock-shares/
We don't know what is meant for performance problems. It may be just a smokescreen excuse. Or it may have validity. However, given some of the experiences others have shared from some companies. I would not be surprised its the quote above as what actually is the case.
I guess the moral is. Have the stock options written explicitly into your contract.
Yup seen the exact same thing.
don't take stock options as payment when your boss is a twat?
Not that good example, because you forget the whole "You will get these stock options in the future, however you will need to work for less money because of it." So the workers work for years with the future promise, which then gets taken away from them. Thats not right.
It's the method de jur for companies these days looking to get rid of somebody they don't like (or, who is too expensive and who is going to be replaced with an underpaid, overworked rookie to make the shareholders happier). There's no real way to fight it, because it's entirely he-said-she-said if done right.
You can contest it, with a good lawyer, but the amount of money you'll spend in the long run means you probably didn't actually need a job anyway. And what're you going to do if you somehow win? Go back in and sit down at your desk at a company you just sued the shit out of, where management already made up crap trying to fire you? Yeah, right.
Oh ...and here's the smoking gun that tells me "underperformance" is a bullshit cover story:
I hope Zynga gets exactly what they have coming to them over this.
On the subject of performance, I do agree that rating someone's performance is subject to a managers opinion. I personally dislike performance reviews for this reason.
I agree this isn't right. It's all about the fine print. The word up for interpretation is "promise". Who knows what this means without seeing the contract.
IMO, taking stock options as compensation for a portion of pay is never a good idea. It's like gambling.
I know what this sort of things feels like, I had a similar thing happen to me when I worked at THQ. I was on a project where we were 'promised' a large bonus based on percentage of sales. About 2 months before ship, they went back on their word and removed the bonus plan.
Yea I read the whole story the other day in the papers in Manhattan, the return the stocks and get fired quote even pissed me off an I am not even employed their.
It's like uh oh they will actually get paid what they are really worth! oh noes:poly122: