Did Zynga ask employees to give back stock options?

What if you were hired by a company who offered up, in addition to a good salary, stock options as well? That sounds like a good deal if that company is successful and then later launches a huge public stock offering. According to a new story at the Wall Street Journal, that's exactly what social game publisher Zynga did to bring in new employees.

But then a funny thing happened. The article claims, via unnamed sources, that Zynga's executive team decided in 2010 that the company had actually given too much out in stock options to some employees. The story claims that some Zynga employees were judged not to be as worthy as others, so the Zynga's leadership team went to those employees and basically told them to give up the stock options that the company had originally offered them. If they didn't, Zynga said they would terminate their employment.

As you might expect that didn't sit well with some of those employees. The story claims that two of them tried to fight this decision with lawyers by their side. In the end they gave up some, but not all, of their originally offered stock options. One of those unnamed employees still works at Zynga.

And the moral of this story? If you offer to sell the house, the camper, and the condo on the beach to someone and then decide later to take back the camper, you should expect some backlash.

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14 Comments

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jakem1 said,
The employees could sue for constructive dismissal in the UK.

Zynga didn't have any UK representation until they bought Wonderland Software this year. This doesn't line up with the 2010 timeline of events the article is referring to.

bj55555 said,

With whatever you had vested. You could have had vested zero.

Which is why disreputable companies often fire employees without cause right before their options vest. Ahem.

And yes, it's VERY illegal.

I believe that is wrongful termination if you fire someone over not giving money back that was given to you in the first place... lawsuit in the making

bj55555 said,

At-will companies can fire, you guessed it, at will.


That does not mean they are free to fire you for any reason. Ever heard of extortion?

nubs said,

That does not mean they are free to fire you for any reason. Ever heard of extortion?

Very much depends on where you are. In North Carolina, for example, there is no unlawful termination. Any company can fire you at any time for any reason, except for a few like jury duty.