Zynga Law Chief Exits With $5.4 Million After Take-Two Purchase

Zynga Inc., a mobile gaming developer that completed its sale to Take-Two Interactive Software Inc. last month, will lose its top lawyer July 1.

Phuong Phillips, a former lead mergers and acquisitions lawyer at Tesla Inc., will exit along with three other company executives after its merger with Take-Two closed May 23, Zynga said in a securities filing.

Phillips is poised to receive $5.4 million in total “golden parachute” compensation stemming from its Zynga takeover, Take-Two disclosed in an April 5 securities filing.

Take-Two, advised by Willkie Farr & Gallagher, announced in January its $12.7 billion cash-and-stock acquisition of Zynga, an attractive takeover target in the hot mobile gaming market. Zynga makes mobile games like FarmVille and Words With Friends.

The transaction was unveiled shortly before Microsoft Corp. said it would buy video game giant Activision Blizzard Inc. in a nearly $69 billion deal.

Wilson Sonsini Goodrich & Rosati, where Phillips was once a corporate associate, served as outside counsel to Zynga on its sale to Take-Two.

Phillips, who San Francisco-based Zynga hired in 2017 to be its chief legal officer, didn’t respond to a request for comment.

Daniel Emerson, Take-Two’s legal chief since 2014, confirmed via email that he remains the top lawyer for the company following its merger with Zynga. The Zynga and Take-Two legal groups are in the process of integrating, he said.

An investor sued Take-Two in Delaware’s Chancery Court in April over alleged conflicts of interest related to its purchase of Zynga.

In May, IBM Corp. filed a patent infringement lawsuit against Zynga in a Delaware federal court. IBM accuses Zynga and its Chartboost unit of profiting from the unauthorized use of its technology for data processing and optimized advertising.

Severance Payout

The severance payout to Phillips is split between $876,240 in cash—comprised of her $485,000 base salary at Zynga; a $363,750 bonus; and $27,490 in health insurance premiums—and almost $4.5 million in equity awards.

Phillips earned almost $3.9 million in total compensation last year, an increase from the roughly $2.8 million and $2.7 million pay packages that she received in 2020 and 2019, respectively, Zynga noted in an April disclosure.

Phillips also sold off more than $904,000 in Zynga stock in 2021, per securities filings.

During her tenure at Zynga, Phillips was one of the few women legal leaders in the technology sector, a role that saw her become an advocate for diversity and equity as the company assembled in-house legal help.

Zynga and Phillips last year announced a $100,000 donation to Girls Who Code Inc., a New York-based nonprofit founded by former Davis Polk & Wardwell associate Reshma Saujani, to help support women working in Big Tech.

Tesla to SolarCity

Phillips spent almost eight years at Wilson Sonsini prior to going in-house in 2011 at SolarCity Corp. She rose to become deputy general counsel and head of corporate securities at SolarCity, a solar power provider that merged with Tesla in 2016.

Tesla chief Elon Musk, a billionaire who served as SolarCity’s chairman and largest shareholder, beat a shareholder lawsuit in April over the terms of that deal.

At Tesla, Phillips spent nearly a year as an associate general counsel, a role that saw her work on the electric vehicle maker’s integration with SolarCity. She succeeded Devang Shah—Zynga’s top lawyer from 2013 to 2017—the following year. Shah is now legal chief for ContextLogic Inc., an e-commerce platform known as Wish that went public in 2020.

Emerson, a former corporate partner at Blank Rome, has held a variety of in-house legal roles at Take-Two since he joined the company in 2005. He earned nearly $3.4 million in total compensation during fiscal 2021, Take-Two disclosed in its most recent annual proxy statement filed last year.

Zynga Departures

Zynga’s legal group, which last year brought on former Orrick, Herrington & Sutcliffe senior litigation associate Lacey Bangle as a senior litigation counsel, has recently seen other lawyers aside from Phillips depart.

Krystal Bowen, a former deputy general counsel and head of privacy, product and intellectual property at Zynga, in January became chief privacy officer for Block Inc., a payments company formerly known as Square Inc.

John Stratford, a senior products counsel at Zynga, left in April to take a similar role at Roblox Corp., an online video game developer that hired a new general counsel in 2020 ahead of going public last year.