The $50 Million Man: Mattrick Gets Hefty Cash and Stock Package From Zynga, Including $19.3 Million in the First Year
Zynga just filed its 8-K regulatory filing that outlines the compensation it took to attract Microsoft Xbox head Don Mattrick to the troubled social online gaming company as its new CEO, replacing founder Mark Pincus.
In total, without figuring in increases in the stock that have already occurred, the longtime gaming exec is getting about $50 million in cash and stock compensation over several years. This all depends on a number of factors. For example, if the shares pop — the stock is already up significantly since his hiring — the package is obviously much more valuable.
While it is a largely stock-based compensation package, Mattrick will also be getting plenty of cash, with a cash and stock kitty totaling $19.3 million in his first year. That includes a $5 million signing bonus in cash, a $1 million annual salary and a pro-rated but guaranteed cash bonus of $2 million. In the period, he will also receive $11.3 million in Zynga stock in a make-whole grant related to the vesting shares he gave up in leaving Microsoft.
Mattrick is also getting an “inducement” grant of 1,785,714 restricted stock units, valued at $5 million, as well as an option to purchase 7,357,143 shares now worth $10 million, which will also vest over several years.
Beginning in 2014, Mattrick will be eligible for a 200 percent to 400 percent yearly cash bonus of his annual base salary, or $2 million to $4 million.
While these cash numbers are large, most of the value of the overall package is based in equity — large stock grants — that will become very valuable if Mattrick can get Zynga back on track. It’s somewhat comparable to how Yahoo has rewarded CEO and former Google exec Marissa Mayer, who has definitely gotten that stock humming since she arrived a year ago.
According to the filing, for example, Mattrick’s make-whole grant is $25 million in total — 8,928,571 Class A RSUs of Zynga — that will vest over his first three years at the company and are valued at a price of $2.80, based on Zynga’s stock price on June 26.
That means 45.32 percent will vest on the one-year anniversary of the start of his employment — this coming Monday — and 45.32 percent on the day prior to the 2015 annual shareholder meeting. The remaining 9.36 percent, or $2.3 million, will vest on the third anniversary of his start of employment.
Along with the make-whole and inducement grants, Mattrick is also eligible for other grants — similar to those given to other execs at Zynga — which are performance-based and are valued at $7 million.
As is standard, Mattrick will get a payment of $60,000 related to legal fee costs associated with his employment agreement with Zynga, as well as severance of twice his annual salary, two times his target bonus, a pro-rated bonus for the fiscal year of the termination and an accelerated vesting of all his grants.
In related news, with Mattrick’s ascension to the board, Zynga said that longtime board member and former Zynga exec Owen Van Natta will be resigning, which will keep the number of directors at nine.
Here’s Zynga’s filing on Mattrick’s money, if you want to read for yourself: