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Comment by grandalf | Hacker News Reader

edit: why downvote this? I've just expressed confusion that a cooperative outcome could not be reached.

While it's reasonable that Pincus wants to find some way to obtain more shares other than buying them, sending an email like this could not be beneficial to morale.

If it is truly in the best interest of Pincus and Zynga to obtain the shares, then it's also in the best interest of the targeted employees to give up the shares in exchange for something else with equal or greater expected value.

Since the hubbub around this reflects poorly on the firm as a whole, the employees refusing to cooperate are likely shooting themselves in the foot, though it also seems that Pincus has blundered significantly.

Pincus at least seems to be acting rationally about the future of Zynga, while the employees (even if they have reason to be annoyed by this) come off as being motivated purely by greed, spite, and short-term considerations.

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You're being downvoted because you either misunderstand the issue, or are deliberately misrepresenting it.

This is not a matter of exchanging unvested stocks for something of greater or equal value. This is a matter of Pincus telling a number of employees to give up their stocks, in exchange for nothing, or be fired. That's likely illegal.

Your solution to this is that they should roll over and accept this blatant breach of their contracts, giving up the one financial incentive they ever had for joining a startup, why? To preserve harmony? For the greater good of the company?

That, sir, is why I and others downvoted you.

It's not rolling over if the sacrifice is needed for the company to succeed. If Zynga can't continue to grow then maybe everyone's shares will turn out to be worthless. That's where the greed factors in.

What do you call a company that can't grow without reneging on contracts with its own employees? Hint: the word is typically an ethnic slur.

FYI, to renege is actually medieval latin, but I digress.

i think he was alluding to the phrase "indian giver"

Well the origin of the term came because when Indians gave a gift they expected something equivalent in return or their gift back, i.e. it was bartering rather than gifting (OK, the source is Wikipedia so this is probably specious).

So Pincus is genuinely an Indian giver if the options are only being clawed back from people who underperformed. Of course there would be documentation predating the clawback threat which identifies such underperformance.

I was thinking more along the lines of "gyp" (sorry).

there are a surprising number of racial epithets for the same concept (or perhaps not so surprising). "welsh" comes to mind too, though i was in my 20s when i realised it had racist origins and was not just a homonym.

"Indian giver" isn't an ethnic slur. It's actually attacking the people who came over, promised the native americans land and then took it back when they found out it was valuable.

The answer is to create more stock that they can use for options. This is unfavorable because it means Pincus would need to sacrifice by diluting his own shares. So instead he forces others to sacrifice by diluting theirs or be fired.

Would this leave him in an equivalent position with respect to future fundraising, control, etc?

>while the employees ... come off as being motivated purely by greed, spite, and short-term considerations.

man, how joining an early stage startup many years ago at the comparably lower salary, yet with comparably large option grant makes the person to come off as "being motivated by short-term considerations"?

Well, if the stock is needed now by Pincus to grow the company and he's hamstrung without it, then by not agreeing to a reasonable deal the employees are threatening the future of the company and their own future wealth just out of greed. What difference does being worth $200M on paper vs $100M on paper make? It only matters to someone who isn't thinking rationally about Pincus's options and the fundraising realities of the company.

Being an early employee should not entitle a person to sabotage the company's future just b/c the founder made a mistake, whether that mistake was being too generous with option grants, forgetting to change a password, revealing a secret about one's personal life, etc. Sabotage is sabotage. Creating the hubbub is essentially an attempt to blackmail Pincus and the company's current investors into complying.

If, by your reasoning, the company is paramount, then all parties should pitch in. Founders, investors, all employees.

Why should these employees be responsible for saving the company from a mess caused by the executive team and investors?

Pincus is the probably the largest shareholder and is already independently wealthy. Maybe he should give some shares back.

What difference does being worth $200M on paper vs $100M on paper make?

Continuing with that "logic", Pincus is apparently worth $2 billion. So if he chips in $1.9 billion of his own assets, maybe he'd have a leg to stand on.

Creating the hubbub is essentially an attempt to blackmail Pincus and the company's current investors into complying.

Blackmailing the company into...abiding by the terms they originally agreed to. Appalling.

Did the company originally agree to keep those employees around through the vesting period? If any of them were critical to the company's success then nobody would be asking them to give up anything.

So essentially what you are saying is, that someone can hire with a promise and a contract that they will paid less now, but be compensate through stock later. Under the premise that the employee will have to do all the work required for the company's success, give his full. The company expects the employee, to take the risk of loosing money through lesser monthly salary and loosing out money on stocks(which happens if the company doesn't do well), but yet not sacrifice even a atom worth work in effort.

And yet when the company is successful, now the company feels it has rights to dump the employee and deny all the compensation for work, risk and lesser monthly pay.

And all this for what? Because you suddenly realize that somebody whom you had promised to pay is getting big money. And you feel out of your own self elitist attitude that he doesn't deserve it, then you decide to dump him so that you can pocket money instead.

Seems like classic tissue example to me. People being used and thrown. Promised, money so that you can work hard to make the company successful. And then when the company is done squeezing the last drop of juice out of you making money. Dumping you, as they no longer need you.

What in the fuck are you talking about?

This sounds like it would be equivalent to being awarded a pay rise at work at the start of the year and then the following year having your employer ask you to refund the extra pay that you received over the last year due to the rise.

Would that also be classed as sabotaging the company to refuse?

I understand your logic, but you are missing the point.

No one is claiming that this isn't good for the company - they are claiming it is unethical (at least) and bad for the employees.

Stock options are an important part of the compensation package at start-up companies.

If Pincus said to a group of employees: "Ok, we've paid a salary but now we have decided we want that money back. Give it to us or we will fire you" would your argument be the same? If not, what is the difference? The extra money would be good for the company, too, right?

If this is truly the case then Pincus is so incompetent as to be dangerous. The market has correctly identified it for culling and it should die.

Honestly, with the bizarre position you've taken over this issue one would have to imagine you are one of the people who stands to gain from this. You're lamenting the failing of a company that is on par with ambulance chasers and patents trolls? You're claiming the employees are greedy when a billionaire tries to extort them for the shares he promised them?

>Pincus at least seems to be acting rationally about the future of Zynga, while the employees (even if they have reason to be annoyed by this) come off as being motivated purely by greed, spite, and short-term considerations.

Talk about spin! If Pincus is so stupid that he accidentally gave away huge percentages of the company to janitors, cooks and cleaning ladies then the rational thing to do is get out before more of his incompetence bankrupts the place. Why give back money to a sinking ship?

Further, it's bizarre that you take his "argument" at face value instead of the more obvious "he's just clawing back stock before the IPO" argument that everyone else sees (it's not like this would be his first unethical action).

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