Struggling web game maker Zynga gave new CEO Don Mattrick a $US5 million ($5.5 million) signing bonus and stock awards valued at $US40 million ($43.7 million) to lure him away from his previous job overseeing Microsoft's Xbox console for video games.

Mr Mattrick secured his lucrative deal with Zynga just a few weeks after the company laid off more than 500 employees, or nearly one-fifth of its payroll, to save money.

Mr Mattrick's compensation package also includes a $US1 million annual salary and a guaranteed bonus of about $US1 million this year, according to a regulatory filing made late Wednesday. Zynga announced Mr Mattrick would replace company co-founder Mark Pincus as CEO earlier this week, but didn't detail how much its new leader would be paid at that time.

Zynga is counting on Mr Mattrick, 49, to reverse a steady string of losses that has caused the company's stock price to plunge 66 per cent from its initial public offering price of $US10 in late 2011.

The stock closed at $US3.42 Wednesday. That price is nearly 20 per cent higher than where the stock stood before the news broke about Mr Mattrick's defection from Microsoft, a sign that at least some investors think he can revive Zynga.