Zynga Lures Mattrick Away From Xbox

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July 5 (Bloomberg) -- Bloomberg Contributing Editor Paul Kedrosky discusses the appointment and compensation package of former Microsoft entertainment head Don Mattrick as Zynga's CEO with Jon Erlichman on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

"bloomberg west." i'm jon erlichman.

We are hearing more about what zynga is paying their new ceo who left microsoft for the social game maker.

Getting more than $50 million in total compensation.

That includes $1 million salary, 5 million dollars signing bonus and nearly 9 million restricted shares vesting over the next three years and more than $7 million in additional restricted shares and options.

Zynga shares have spiked more than 20%, meaning the stock package is now worth about $72 million.

Millions to lower him away from microsoft.

What does it ultimately mean for the future of both xbox and zynga's turnaround efforts?

We have bloomberg and your bidding editor from san diego.

That is a big package, paul.

I kind of feel badly i turned it down now.

[laughter] the thing that is interesting, i give them credit trying to structure something that is sort of a permanent package -- it was an attempt to compensate what was deemed to be a lot of microsoft shares leaving behind and i think according to one of the story faisal, a sliding scale of declining compensation over the per three years.

But nevertheless the point stands what has been a very troubled company, as is a really sizable pay package on scant evidence of the -- of exactly the opportunities to turn the company around, other than he is sitting on a very sizable balance sheet of cash, so there's an opportunity to potentially be acquired or be an acquirer, i suppose.

Other than that, this is still a really dodgy step and i am surprised that the market -- of the market optimism.

I am glad you looked at the possible outcomes.

We talked a lot about don mattrick, who he is, when he comes to the table and what experience he might not have, but what will determine success?

If we look out 12 months and he encompasses this and this, he is a winner?

How should we look at this?

I think he should declare victory now.

He is up 20%. get it over with right away.

But i think of the stock heard -- holds current level, it is a victory.

If you look at who is really behind all of this -- we talked about this a little bit back when this became johndorr's that project, a significant shareholder at kleiner perkins.

If they would like to see stock over $10. i think the implicit message is this stock has to get back to the point it delivers material returns, requiring a share price back above one dollars and realistically $12. a victory from the standpoint of investors probably helped architect in a major way this move, a share price a year from now $10, which would be a remarkable run.

Unlikely but what people are looking for.

Quickly, on the other side.

Microsoft and the future of xbox and losing somebody like don.

What does it mean?

This microsoft rearranging the deck chairs -- it is just a very, very said they'd of affairs.

It is not obvious to me what the outcome is for xbox.

It does not give me any optimism the company has a sense of what it wants to do with a really its key asset.

It is very disappointing for microsoft.

Paul, thanks a lot.

This text has been automatically generated. It may not be 100% accurate.


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