Zynga's COO quits as stock continues slide
SAN FRANCISCO |
SAN FRANCISCO (Reuters) - Zynga Inc's chief operating officer John Schappert has resigned, the company said in a regulatory filing on Wednesday that was foreshadowed by recent management shakeups at the embattled game publisher.
The resignation from Schappert, a former Electronic Arts executive, did not arise from "any disagreement with the Company on any matter relating to the company's operations, policies or practices," the filing said.
But it came as no surprise to Zynga's followers after the social gaming company behind Facebook-based hits like "FarmVille" said earlier this month that Schappert had already ceded many of his game development responsibilities while Zynga shuffled its top management ranks in the wake of a disastrous second quarter.
Zynga elevated David Ko, its chief mobile officer, and Executive Vice President of Games Steve Chiang, to top positions overseeing game development alongside Chief Executive Officer Mark Pincus. But the company did not immediately name a replacement for Schappert on Wednesday.
"John has made significant contributions to the games industry throughout his career and we appreciate all that he has done for Zynga," Pincus said on Wednesday in a statement. "John leaves as a friend of the company and we wish him all the best."
Zynga reported a net loss for its second quarter in late July and cut its full-year earnings per share forecast, news that sent shares down roughly 40 percent and attracted a wave of shareholder lawsuits accusing the company of misguiding investors.
One of several Internet startups that debuted with fanfare in late 2011, Zynga blamed its poor quarter to sudden changes to Facebook's algorithm - which usually helps boost the popularity of Zynga's social games - and delays in its pipeline of new titles.
In May 2011, Zynga wooed Schappert from competitor Electronic Arts with a cash and stock package worth more than $42.7 million, a swoop that was viewed at the time as a coup for Zynga.
Schappert received $10 million in cash as a signing bonus, as well as another $10 million and 2 million restricted shares that were scheduled to vest over time but have not finished vesting. He accepted a base salary of $300,000 last year.
Schappert was a costly hire, in more ways than one. As part of his hiring process, Zynga also paid a total of $243,869 in legal fees and taxes - as well as Schappert's parking fees at Zynga's office, which were covered by the company to the tune of more than $1,100, Zynga noted in a pre-IPO regulatory filing.
Schappert, a respected gaming industry veteran and former COO at EA, was also mentioned in a lawsuit filed last week by his former employer against Zynga. EA accused Zynga of copying its "The Sims Social" title, alleging that Zynga obtained confidential development information by poaching Schappert on the eve of that game's launch.
Zynga retorted that EA's lawsuit showed "a lack of understanding of basic copyright principles."
Zynga closed on Wednesday at $2.95 and slipped further in after-hours trade. Its stock debuted in December at $10.
(Reporting By Gerry Shih; Editing by Bernard Orr and Carol Bishopric)
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