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Report: Zynga issues 'equity grants' to full-time employees

updated 11:35 pm EDT, Thu August 9, 2012

Move aimed at preventing talent mass exodus?

Beleaguered Facebook game developer Zynga, facing lawsuits from bitter investors and Electronic Arts for different reasons, parceled out equity grants to every full-time employee of the company earlier this month. The move, which aims to compensate shareholder employees for recent losses, was made shortly after a dismal and widely-criticized earnings report published on July 25. While awards of options and cash bonuses are common at Zynga, this was the first time that equity grants were given to all full-time staff.

Arvind Bhatia, an analyst at Sterne Agee & Leach said that the grants were "a proactive move to prevent mass exodus." Zynga executives had no comment on the awards. The move is in contrast to last year, when Zynga CEO Mark Pincus came under fire for demanding some employees return unvested equity to the firm because he felt the potential rewards didn't match the employees' contribution to to the company.

The retention moves come after a net loss of $22.8 million for the quarter was announced, a far cry from analysts' expectations. Since the announcement, it was revealed that company executives and large investors cashed out millions of dollars of stock near the beginning of the quarter, launching a pair of class-action suits from investors concerned about insider trading and the lack of financial transparency.

Game giant Electronic Arts has piled on, suing Zynga for copyright violation and "nearly indistinguishable" gameplay between Zynga's The Ville and EA's The Sims Social. Former COO John Schappert resigned yesterday following the removal of his duties during a streamlining of Zynga's business.



By Electronista Staff
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  1. malax

    Fresh-Faced Recruit

    Joined: 08-24-06

    Zynga, the master of "games that aren't really games." The sooner creator of those time-suck click-bait apps goes under the better, but unfortunately that genii isn't going back into the bottle.

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