Zynga to Leave San Francisco?

The internet gaming company Zynga has threatened to transfer to Silicon Valley unless San Francisco renounces the tax on employee stock options. Zynga is one of numerous technology companies to request such an action following the city’s offer to exempt Twitter from payroll taxes in an effort to keep the company headquarters in the city.

Last week, a meeting was held between San Francisco Mayor Edwin lee, President of the Board of Supervisors David Chiu, CEO of Zynga Mark Pincus and CFO David Wehner as well as various other company executives. Participants in the meeting reported that Zynga explained that without a similar exemption, they would consider relocating their headquarters to Silicon Valley, and selling the 27,000 square-foot office to a telemarketing operation.

Zynga, famous for games like Farmville, has around 1,200 employees, and is worth $6 billion. Company executives have claimed that the payroll tax provision would be comparable with the net value of its lease on its Townsend Street offices.

Will They Get What They Want?

“They let us know there is no way in the world that they can go public and pay payroll tax on all their employee stock options,” said a city official. “They mostly just dropped that in our laps and suggested we fix it pronto or watch them drive away south.”

In a statement, Zynga said: “We are looking at a variety of options to grow the company in the Bay Area, and as part of that we are in serious discussions with the city. It would be premature to comment on those conversations at this time. We are encouraged that the city is engaging with us on this issue.” Representatives from the company said that the meetings have been “productive and positive” so far.

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