Zynga CEO to earn $1 as other execs chase big bonuses
The social game developer alters its compensation plan to help retain top executives -- a problem for Zynga since it went public in late 2011.
Mark Pincus requested the board lower his annual salary to $1, Zynga noted yesterday in a regulatory filing, and he won't receive any cash bonus or equity awards this year. By comparison, Pincus was paid a salary of $300,000 in 2011 and his overall compensation that year totaled $1.68 million. Zynga hasn't yet revealed salaries for 2012.
Zynga has been struggling since it . The company's shares closed that day below its IPO price of $10 and have not recovered. Zynga now is worth only a third its initial value. The company is closely tied to Facebook, and there have long been worries about its dependence on the social networking site. As fewer Facebook users play Zynga games and pay for digital goods in the games, Zynga's revenue has fallen.
In addition, the company has lost a steady stream of executives over the past year, something that contributed to the revised compensation terms. A couple of the most recent departures include, who jumped ship to become CEO at an enterprise cloud storage company.
the former CEO of Zynga acquisition OMGPOP, also has left. Zynga acquired OMGPOP just as the company's game Draw Something was nearing the peak of its popularity. After some steady growth, Draw Something's user numbers dropped significantly.
Zynga said its SEC filing:
The company's 2013 executive compensation program is designed to focus on two primary objectives: first, retaining and motivating our talented, entrepreneurial executive leadership team; and second, aligning our executive pay structure with company performance-based incentives. We believe that by focusing on both retention and performance, the compensation packages align with our strategy to build value for our stockholders.
Excluding Pincus, Zynga's top executives will receive annual salaries of $425,000 or $500,000, depending on the position. They will also be also eligible for bonuses and performance awards that could significantly boost their total compensation.
The cash bonuses are subject to Zynga achieving certain goals related to expanding the company's games on mobile and Web, developing and increasing the Zynga network, and achieving certain financial performance. Each executive can earn no bonus or up to 200 percent of the target bonus. They also can receive stock grants, the company said, though the stock grants vest over four years.
Meanwhile, Zynga said today that it has elected John Doerr of VC firm Kleiner Perkins Caufield & Byers to its board.