Zynga Inc (NASDAQ:ZNGA) is a company that’s known for creating social games for Facebook and mobile web but perhaps they will become more famous for their CEO who spends far more on security than he should.
According to John Letzing from the Wall Street Journal, Zynga spent $1.37 million to protect the chief executive Marc Pincus and his family. This included the purchase and maintenance of a home security system.
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This wasn’t the only time Zynga’s CEO was involved in some questionable money practices. Last fall when the company was gearing up for their IPO, Pincus, along with other company executives, thought that his company gave too much stock to employees, so he demanded that his employees give back that extra money or face termination. CNET’S Don Resigner summed up their plan:
In order to determine which employees would be asked to give stock back, Pincus and his executives tried to pinpoint workers whose contributions to Zynga–in the execs’ eyes–didn’t necessarily justify the potential cash windfall they could receive when the company went public, the Journal claims. One Journal source said that Zynga executives were especially concerned with not creating a “Google chef” scenario.
That reference relates to Google’s 2004 IPO when one of the company’s chefs, who was hired in the firm’s early days, walked away with $20 million worth of stock after the shares went public.
Pincus gave the ultimatum to the select list of employees. One of those employees left the company and another one hired lawyers in order to reach a settlement agreement that would entitle them some shares.
It’s really not shocking to know that Pincus spends more money than he should on personal security because its pretty clear that his real investment is himself.
I would suggest that he closely monitors the company’s expenses and perhaps spend less money on personal security because he could lose his job or put the company in financial difficulties. It is especially peculiar that so much is spent on his security since the company lost money (GAAP basis) in Q411.
ValueWalk spoke to someone who knows Pincus well before the IPO. The individual described him as one of the most despicable people in Silicon Valley. Perhaps, he does want the extra security!