Zynga Desperately Tries To Keep Employees After Stock Crash

    August 10, 2012
    Zach Walton
    Comments are off for this post.

Things are not looking good for Zynga. Their stocks crashed, COO John Schappert left and they’re being investigated for insider trading. After all this, employees would obviously want out. The company is going to keep them the only way they know how – throwing money at them.

Bloomberg is reporting that Zynga is now handing out equity grants to all of the company’s 2,800 plus employees. The company used to pay pre-IPO employees in restricted stock units, but their value is now almost nonexistent as the company’s stock hovers around $3.

Will the equity grants help keep on the talent that Zynga desperately needs? Analysts on Wall Street seem to think so with Arvind Bhatia, an analyst with Sterne Agee & Leach, saying that the offer is “positive for morale.” Frank B. Glassner, a partner with Meridian Compensation Partners, said that “when people have meaningful equity in a company, they have skin in the game.”

Glasnner also said that offering equity grants to employees will not have any negative effects on the company as far as shareholders are concerned. It’s about the best move that the company can make right now. They need a hit, badly, and the only people who can do that are the developers. Keeping them on board will help Zynga transition into the world of mobile where returns are much higher.

If Zynga is able to get back on top, those equity grants will become very valuable to the employees who stick around. If Zynga doesn’t perform as well as expected, they will be meaningless. The company is asking the employees to gamble on the future of the company that is currently uncertain. It will be interesting to see how many actually stick around.

  • http://www.LAokay.com Steve G

    I don’t know about you, but if I was not paid a salary I wouldn’t stay even if the company gave me stock.

  • Rickey Morris

    Zinga needs to worry about keeping the games from constantly crashing from Shockwave and Java Problems at the same time they worry about Stock crashes. I don’t use it much because of the crash after crash, and everyone I talk to has the same problem to varying degrees. Lots of fun those crashes!

  • http://www.greyolltwit.com/ Grey Olltwit

    More shares in a boat that’s sinking, OH and by the way we don’t have any life jackets or life boats on board but you’ll stick with us won’t you :)

    • http://cass-hacks.com Craig

      I see it more as a case of, “put your money where your [skill set] is”.

      Of course if too few stick around, there’s not much they can do regardless but those that do stick around could stand to make quite a bit of money if they come up with a few hits along the way.

  • http://damescribe.hubpages.com/ Gin

    I am a Zynga player and noticed that memory was always a issue and loading takes me about 5+ page refresh efforts. It’s the amount of memory that gets used and don’t understand why that isn’t a easy issue to resolve. One suggestion I’d recommend is, have the ‘scene’ open in a smaller size and stop having a queue of loading so many large size adverts, etc. Paying attention to the ‘suggestions, problems and issues’ forums probably would greatly help.

  • Sandra Lewis

    Zynga thinks that mobile will make more money? Wonderful! In my opinion, they ought to do it under another name, because I’m one of those customers who has already churned due to real problems with the product line that Zynga believes I imagined. The pool of customers really can get smaller no matter what platform Zynga imagines they can build on.