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Zynga Leans on Some Workers to Surrender Pre-IPO Shares

Published on November 9, 2011
by Justin Scheck and Shayndi Raice

Zynga Inc. Chief Executive Mark Pincus often gave shares rather than high salaries to his top talent as he built his online-game start-up.

But as Zynga grew into a multibillion-dollar company with hot games like “FarmVille” and “Mafia Wars,” Mr. Pincus appears to have developed giver’s remorse.

Early last year, as Mr. Pincus began preparing to take Zynga public, he and several other executives decided the company had doled out too many stock rights to certain people in its early days, say people familiar with the matter. The executives chose an unusual solution: They began demanding that certain employees surrender some shares or be fired.

Those shares matter as Zynga approaches an initial public offering, expected this year, that could value it at close to $20 billion and make holders of large blocks of stock wealthy.

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