Social gaming giant Zynga has been given forty-five days to change the composition of its board of directors after the departure of two high-profile board members, Linkedin founder Reid Hoffman and Dreamworks Animation CEO Jeffrey Katzenberg.
The company will appoint two independent directors in the coming months to replace the pair.
As a result of Hoffman and Katzenberg stepping down, Zynga is no longer in compliance with NASDAQ listing rule 5605, which requires that a company’s board of directors be comprised of a majority of independent directors.
The company’s board is led by chairman Mark Pincus, with chief executive Don Mattrick a member alongside Kleiner Perkins Caulfield & Byers general partner L. John Doerr; Electronic Arts co-founder Bing Gordon; Linkedin director Stanley Meresman; Spring Ventures partner Sunil Paul and Shmoop University CEO Ellen Siminoff.
The company received notification from NASDAQ on June 12th, confirming that it no longer complies with the Rule, and has been given until July 27th to submit a plan outlining how it intends to make itself compliant with the rule.
If the NASDAQ accepts Zynga’s plan, it may grant the operator an extension of up to 180 days from the date of the notification, or until December 9th, to regain compliance.
Zynga noted that its board is actively identifying, evaluating and recruiting potential candidates to be appointed directors of the business, and that two independent directors are likely to be added by in the coming months.
Hoffman has long been associated with Zynga, having personally invested in the business and joined the company’s board during its first round of fundraising in March 2008. Katzenberg, who has previously managed film giant the Walt Disney Company, was appointed to the board in April 2011.
Shares in Zynga Inc. (Co.Data) (NASDAQ:ZNGA) closed at $3.10 per share in New York on Friday.