Report: Zynga Alters Stock Structure To Give CEO More Voting Power
Social games giant Zynga is changing its stock structure around to give CEO Mark Pincus 70 times more voting power than any other shareholder in the initial public offering.
Zynga's board of directors approved a new three-tier approach for the stock structure, increasing Pincus' shares to 70 votes, up from his original 10, according to documents
acquired by financial website Bloomberg.
In comparison, pre-IPO investors will get seven votes for each share, up from the original single vote they were originally allowed. All other public investors will still receive the standard one vote per share.
Lise Buyer, a principal at IPO advisory firm Class V Group, told Bloomberg that the move by Zynga may be in aid of keeping too large a share of the voting power from shareholding staff members.
"Zynga has invented something new," she said, noting that having three tiers of stock is "unprecedented" for the average technology company.
Zynga filed an S-1 with the SEC
indicating its desire to issue an initial public stock offering "as soon as is practicable" back in July, with the company estimating aggregate initial sales of $1 billion in class A common stock.