Zynga’s new boss to get pay package worth some US$50 million

PUBLISHED : Thursday, 04 July, 2013, 10:21am
UPDATED : Thursday, 04 July, 2013, 10:21am

Don Mattrick, the head of Microsoft’s Xbox business who will replace Zynga Inc founder Mark Pincus as chief executive next week, will get a hefty, largely stock-based compensation package of about USUS$50 million in coming years, the company said in a regulatory filing.

In his first year, Mattrick will receive a base salary of US$1 million (HK$7.8 million), a sign-on cash bonus of US$5 million (HK$38.8 million) and a this year bonus of US$2 million (HK$15.5 million), or the average bonus of Zynga’s other executives, the company said.

To compensate for shares he lost in leaving Microsoft, Mattrick will receive a make-whole grant of US$25 million (HK$193.8 million), or about 9 million restricted stock units that will vest over the next three years. These shares are currently valued at over US$30.5 million.

Zynga stock has soared 11 per cent since the company announced on Monday that Mattrick was coming on board as chief executive.

At the end of his first year, Mattrick will get 45.32 per cent of his 9 million restricted stock units, valued by the company at about US$11.3 million based on the June 26 price. This takes his salary in his first year to a total of US$19.3 million.

Zynga is also giving Mattrick an inducement grant of 1,785,714 restricted stock units with a target value of US$5 million and an option to buy 7,357,143 shares with a target value of US$10 million that will vest at the end of his third, fourth and fifth term of employment.

Mattrick is expected to make about US$14.3 million in his second term and about US$8.4 million in his third term as chief executive.

If the company is pleased with Mattrick’s performance, he is eligible for grants of new stock with a target value of US$7 million next year. In following years, the company’s board can award him new stock grants, but will try to keep the target value at US$7 million.

Credited with building Microsoft’s Xbox business into a gaming powerhouse, Mattrick officially takes over on Monday as chief executive at Zynga, known for its “Farmville” games.

Mattrick’s new role leading a company that publishes social media-based titles and smartphone games will be a marked departure from his long career in the world of big-budget, packaged console games.

Mattrick headed successful franchises such as “FIFA” during his 15 years at video game publisher Electronic Arts. He joined Microsoft in 2007.

At Microsoft, Mattrick helped turn the Xbox business into a profitable venture after years of operating losses, eventually propelling the device into the top selling console in the United States.