Zynga has announced that the company’s COO John Schappert has stepped down from the company and its board of directors, effective immediately.
The announcement was made this afternoon in a filing with the Securities & Exchange Commission.
In a statement, Pincus said: “We can confirm that John Schappert has left Zynga and its Board of Directors effective immediately. John has made significant contributions to the games industry throughout his career and we appreciate all that he has done for Zynga. John leaves as a friend of the company and we wish him all the best.”
As part of a high-level restructuring, David Ko, Zynga’s chief mobile officer, and Steve Chiang, its EVP of games, had started reporting directly to Pincus, rather than to Schappert.
The company may have made the moves to shore up investor confidence in the company as it scrambles to recover from a disastrous second quarter and 2012 outlook. But still, the changes are sudden given that Schappert was one of Zynga’s priciest — and most prized — recruits from Electronic Arts.
In 2011, Schappert’s total compensation package equaled to $42.8 million. As part of his offer agreement, he received a $10 million signing bonus and $10 million of stock grants that were to vest over multiple years.
In the filing with the SEC, Zynga said that Schappert’s resignation was not in connection with any disagreement with the company on any matter relating to the company’s operations, policies or practices. Last week, the company carefully framed the changes as a way for the company to quickly move to a multiplatform opportunity by having executives with both mobile and Web expertise reporting directly to Pincus.
However, it was unclear what that left for Schappert to manage, and if he continued to have the support of the company.
While Schappert may leave as a friend, it’s unclear whether he will feel the same about Zynga, but the financial cushion he lands on may make his sudden unemployment more manageable.
According to his employment in a SEC filing, the offer letter provides that, in the event Mr. Schappert is terminated without cause, he “will be entitled to receive an amount equal to his annual base salary and will immediately vest with respect to the portion of the ZCUs that would have vested from the date of separation through March 15, 2013.”
Prior to the announcement, the company’s stock fell six cents, or 2 percent, to $2.95 a share, which is roughly 70 percent below its public offering.