Zynga announced today that its founder Mark Pincus is converting his high-voting shares in the mobile game company to Class A common stock. As a result, Pincus’s overall voting rights at Zynga will drop from about 70 percent to approximately 10 percent.
Although Pincus will still serve on Zynga’s board of directors as the non-executive chairman, but this will reduce his power in the company. He told GamesBeat that this move will simplify Zynga’s stock, removing its old multiclass structure to one where one stock equals one vote.
“The company is in a strong place,” Pincus told GamesBeat, explaining that this decision is a vote of confidence in Zynga’s current leadership, including chief executive officer Frank Gibeau. Zynga released its earnings today for the first quarter of 2018, showing $182.6 million in mobile revenue 13 percent year-over-year growth.
Under the old multiclass stock structure, Class B (seven votes per share) and C (70 votes per share) stocks had more power than Class A (one vote per share) stocks. Pincus owned all Class C stocks and most Class B ones. Now that he is converting his shares to Class A, Zynga will use a single class structure. Now all shares will be worth one vote.
“From an operational standpoint, not much changes at all,” Gibeau told GamesBeat, noting that this change was Pincus’s idea.
Pincus founded Zynga in 2007, which found success on Facebook with games like FarmVille. Pincus stepped down as CEO in 2013, but he returned to the role in 2015 as the company transitioned from Facebook games to the mobile space. Gibeau took over as CEO in March 2016.