Don Mattrick, the head of Microsoft Corp'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 $50 million in coming years, the company said in a regulatory filing on Wednesday.
In his first year, Mattrick will receive a base salary of $1 million, a sign-on cash bonus of $5 million and a 2013 bonus of $2 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 $25 million, or about 9 million restricted stock units that will vest over the next three years. These shares are currently valued at over $30.5 million.
Zynga stock has soared 11% 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% of his 9 million restricted stock units, valued by the company at about $11.3 million based on the June 26 price. This takes his salary in his first year to a total of $19.3 million.
Zynga is also giving Mattrick an inducement grant of 1,785,714 restricted stock units with a target value of $5 million and an option to buy 7,357,143 shares with a target value of $10 million that will vest at the end of his third, fourth and fifth term of employment.
Mattrick is expected to make about $14.3 million in his second term and about $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 $7 million in 2014. In following years, the company's board can award him new stock grants, but will try to keep the target value at $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 it's "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 Inc . 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.
Zynga shares closed nearly 5% higher at $3.42 on the Nasdaq on Wednesday.
