After an article in the Wall Street Journal suggested Zynga has been demanding that some employees surrendered stock options they were previously granted, Zynga CEO Mark Pincus sent a memo to employees, claiming the article paints the company in a “false and skewed light”.
In the note, obtained by Fortune, Pincus says dismisses WSJ’s claims, calling Zynga a “meritocracy” which has been built in an “ethical and fair way”.
“The wall street journal posted a story last night (copied below) which paints our meritocracy in a false and skewed light. The story is based on hearsay and innuendo which is disappointing but is to be expected as we move towards becoming a public company,” says Pincus in the note.
WSJ’s story claims that Zynga has decided that some employees have too many unvested shares, asking them to return a portion of them back or be fired. Fortune has another take on the story, claiming that Zynga’s management is well within its rights to “punish” employees who haven’t been performing up to the company’s standards by asking them to surrender unvested shares, basically describing the practice as cutting the employee’s pay.
It’s definitely an unusual practice, and one likely to raise controversy, especially before the company’s IPO. After it goes public, Zynga will likely have to implement clear and transparent rules and regulations on how it rewards – and punishes – the “citizens” of its meritocracy.
Zynga’s long-awaited initial public offering is due mid-November, with the company hoping to raise between $1.5 billion and $2 billion, at a valuation close to $20 billion.