industry news
Activision Bigs Get Big Bonuses
Posted by Leigh Alexander at 9:20 AM on July 2, 2008
Activision had a banner fiscal year, reporting a record $US 2.90 billion in revenue in March 2008. Generally such victories are credited to a company's executive steerage, and for meeting (or, in this case, exceeding) their benchmarks, it's common for execs to get bonuses. So how much does Activision chairman and CEO Bobby Kotick get?
An SEC filing revealed all:
The company's board just approved a $US 3,079,798 bonus for Kotick, and co-chairman Brian Kelly took home $US 2,996,556. They had to earn those bonuses, of course, by completing certain benchmarks for the company - Kotick and Kelly were allowed to pass on two of those, though, because they would have been "impractical and inadvisable" in light of Activision's pending combination with Vivendi.
The ones they were allowed to skip were "weighted", by the board, against the other ones, and Kotick and Kelly were found to have "exceeded target" as far as acquiring assets (yeah, scoring Blizzard is not a bad get) and developing the company's business franchises - franchises strong enough that they recently wrapped their best fourth quarter ever even without releasing new titles during that quarter.

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fire ze missiles
Posted 10:22 AM 2/7/08
@Meohfumado: It's not very different (if at all) in any other country.
fire ze missiles
PrivateJ0ker
Posted 10:19 AM 2/7/08
They obviously deserve it. The executives have to make some of the most difficult and important decisions for the company. Could developers "take over Blizzard"? No. The corporate executives are obviously talented at financially constructing their companies infrastructure and portfolio of businesses. Its a fact. If anything they should be paid more. 3 Billion in ONE month? Thats exceptional. Execs that don't deserve it, get paid even more.
Big win for the big executives! HURRAY!!
PrivateJ0ker
Lancehead
Posted 10:18 AM 2/7/08
@HenryJonesJr: Because success is directly proportional to effort, right? Nevermind economic and social condiotions. Those things don't exist. As long as you put in the effort you'll be making 3 million dollars no sweat.
Lancehead
Krondonian
Posted 10:18 AM 2/7/08
@sat0pi: I doubt if anyone is critising them for getting paid well. They got to the top of the company, and they'll reap the rewards.
It's when the rewards are excessive that people get pissed off. I'd call £1.5 million excessive.
Krondonian
sat0pi
Posted 10:16 AM 2/7/08
People whine about CEOs because they make more money than they do... But they don't realize the amount of work (most) CEOs do because they don't see them.
I run my own business and I can guarantee you that I spend more time and effort working than the people I pay to work for me. That's why I get the benefits of that hard work.
sat0pi
FishyJoe
Posted 10:10 AM 2/7/08
For those crying about the workers, they likely have earn a lot of stock options. Those stock options making them very rich since ATVI has appreciated greatly under the current management.
FishyJoe
Spacehog85
Posted 10:06 AM 2/7/08
@HenryJonesJr:
Idiot
Spacehog85
d1gw33d
Posted 10:04 AM 2/7/08
If you think CEO's and executives have no impact on the businesses they over see you're retarded... period.
Get a real job and learn something about business and you'll understand that instead of showing up to work every day expecting to get paid because you came in on time.
d1gw33d
EnigmaNemesis
Posted 10:04 AM 2/7/08
@HenryJonesJr:
ROFLMAO ... someone pinch me.
EnigmaNemesis
Krondonian
Posted 10:01 AM 2/7/08
@HenryJonesJr: Do you really believe it's that simple?
Krondonian
EnigmaNemesis
Posted 9:59 AM 2/7/08
@saxifridge:
So true!
EnigmaNemesis
Jtn
Posted 9:59 AM 2/7/08
This is why it is always better to be a fat lazy CEO than a hard-working employee.
Jtn
EnigmaNemesis
Posted 9:59 AM 2/7/08
And they scream cheaper consoles.
Damn hacks!
EnigmaNemesis
HenryJonesJr
Posted 9:59 AM 2/7/08
Waah, waah, waah. Like any of you would turn down a 3 million dollar bonus if it were offered you. Seriously. Instead of bitching and moaning about it, why not be inspired by it as an example of what's possible. If you're not making that kind of money (and don't live in a third world country) you only have yourself to blame.
HenryJonesJr
saxifridge
Posted 9:57 AM 2/7/08
Ugh, and I bet a lot of their employees struggle to put gas in their tanks every week.
saxifridge
TheSonicGamer
Posted 9:56 AM 2/7/08
"Exceeded target"
Yeah, if you count nearly ruining the Guitar Hero franchise and naming your company Activision Blizzard.
Mr. Burns said it best. These CEO's are taking money that rightfully belong to developers, and yet, if I were to have them killed, I'd be the one to go to jail. That's democracy for you!
TheSonicGamer
CecilTheDarkKnight
Posted 9:53 AM 2/7/08
3 mil bonus for "oh let me pick up guitar hero because it'll do good". While everyone else gets jack shit and gets worked to death and are treated like shit. GG game companies!!
CecilTheDarkKnight
Absent Blue
Posted 9:53 AM 2/7/08
I'd rather hear about what Infinity Ward and Neversoft got, if anything. If those two devs don't see a bonus that puts six million to shame then justice hath not been serv'd.
Hearing someone get 3 mil as a bonus just sounds ridiculous...
Absent Blue
Meohfumado
Posted 9:52 AM 2/7/08
@Gypse-scum: Well...technically they don't give themselves the bonus...the boards do.
But who sits on the board? People who have been, or aspire to become CEO's themselves. Think about that.
If you had a vote which would decide what the "average pay" for your future/former/current position would be...knowing full well that it will affect your current payscale....is that not a serious conflict-of-interest?
Meohfumado
Gypse-scum
Posted 9:50 AM 2/7/08
@odnet: that's not true at all commies are the second best villain of all time. after nazi's of course
Gypse-scum
Gypse-scum
Posted 9:49 AM 2/7/08
because those executives do so much work they totally deserve to give them selves a HUGE bonus.
Gypse-scum
trelantana
Posted 9:48 AM 2/7/08
...This sort of thing should be illegal.
trelantana
ciabb64
Posted 9:47 AM 2/7/08
@Thalandor46: The problem is that the guys at the top of the company don't really work any harder than the thousands of workers who work for them. Probably work less. Yet at the end of the year have a nice £1.5 million bonus of profit made by the developers they own. Not saying the CEO's dont deserve to be paid but these "bonuses" are a bit extreme.
ciabb64
Nutchos
Posted 9:46 AM 2/7/08
@Thalandor46:
The $6 billion is a revenue figure, meaning that's before applying all costs.
Nutchos
Pezdispenser
Posted 9:44 AM 2/7/08
@odnet:
Stalin VS Martians, 'nuff said.
Pezdispenser
pylon_trooper
Posted 9:42 AM 2/7/08
They've come a long way since Hyperblade and Interstate '76. Hey Stampede, howsabout a decent sequel? None of this '82 stuff, or whatever it was.
pylon_trooper
Meohfumado
Posted 9:41 AM 2/7/08
@odnet: I'm not advocating communism, just pointing out a serious problem with American capitalism, which if you've studied your Smith & Mill is nothing like true capitalism and the free market. CEO pay is an epidemic, and these benchmarks they are held to actually encourage CEO's to slash costs (aka employee pay and benefits) and outsource work so that they can garner greater bonuses that they don't need because they are already overpaid for the amount of work they do.
Meohfumado
Thalandor46
Posted 9:38 AM 2/7/08
I don't know anything about business, and I'm not entirely sure what constitutes revenue, but if the company made nearly 3 billion, and the execs got 6 million...I dunno, just doesn't seem like that big of a deal to me. They're the top of the company, it makes sense that they'd get that kind of money, and in terms of percentage of the whole, there's plenty left to go around.
Thalandor46
Polterg3ist
Posted 9:38 AM 2/7/08
That's craptacular.
Polterg3ist
toefer
Posted 9:37 AM 2/7/08
I'm not doubting this guy's business skills, but he seemingly knows nothing about video games (referring to GH:WT as "the first time you'll have multiple instruments" and the great response "It's called Rock Band, I think."). While not positive, I think he bought his way into Activision. Awesome guy.
toefer
MrSmiff
Posted 9:37 AM 2/7/08
@odnet: I'm sure Stalin would take issue with that.
"In Communist Russia, game plays you!"
MrSmiff
Krondonian
Posted 9:37 AM 2/7/08
Wowza. £1.5 million? That's crazy money. You could buy a whole load of indie developers for that amount. They could probably buy Atari!
Krondonian
lumpi
Posted 9:34 AM 2/7/08
Yea, Capitalist games rock. We all love our rushed movie-licensed games for PS3, PS2, XBOX, XBOX360, Wii, PC, N-Gage, iPhone, PSP and Nintendo DS. You can feel all the love that went into making them.
lumpi
GOD
Posted 9:33 AM 2/7/08
They have all that money, but are they truly happy?
I know I would be over the fooking moon!
AMEN
GOD
mfwahwah
Posted 9:30 AM 2/7/08
So what about the developer's who made the games o.O I'd be pissed if a company made money like that with my help and gave only those 2 money... and 3 mil each at that >.<
mfwahwah
odnet
Posted 9:28 AM 2/7/08
@Meohfumado: Communist games suck.
odnet
Shindokie
Posted 9:27 AM 2/7/08
Wow that's really horrible. They should be giving bonuses to the developers and the people who actually make the game.
Shindokie
Numlock
Posted 9:27 AM 2/7/08
That kind of makes me sick. It seems like a bit much. I wonder how far the bonus pipeline travels. Or just them two?
Numlock
Meohfumado
Posted 9:26 AM 2/7/08
The rich get richer....
Meanwhile, I bet worker bees are still living paycheck to paycheck.
/sigh
GG American Capitalism
Meohfumado
HT Tenrai
Posted 9:25 AM 2/7/08
I'm sorry, but I do not think an executive has done enough work to deserve that 3 million. That should be broken up and passed along to the workers on staff producing and creating those games.
Fucking CEOs. Seriously.
HT Tenrai
Katorok
Posted 9:23 AM 2/7/08
! That's a lot of cash indeed O.o....
Katorok
MrLahey
Posted 10:47 AM 2/7/08
The gross part about this is that the people who made all those games are surely not being paid for the overtime they put in. Which, I assure you, was a whole fucking lot.
MrLahey
PsycheE
Posted 10:43 AM 2/7/08
Have to think in big bucks level. Its that we don't see millions, but we tend to take off a zero or two in perspective of our greens.
PsycheE
NKato
Posted 10:40 AM 2/7/08
Regardless, were I an exec, I would have preferred a $50,000 bonus over a $3,000,000 bonus. I would have told the board to shove the other $2,950,000 towards paying for better wages in our game development trenches.
Seriously, $3 million is enough to pay a single game programmer his standard yearly wages more than fifty times over.
What an utter waste of money.
NKato
jgw
Posted 10:36 AM 2/7/08
From the bonus condition description (8-k dated 6/19/08), the conditions set include the aforementioned two waived goals (at 15% contribution each), 20% for meeting operating income targets for RedOctane (profit after operating costs aka development), and 50% for meeting EPS targets.
While the 20% for RedOctane operating income has the potential to lead to pay cuts and layoffs in that division to drive down salary expense (as cutting R&D would probably be unwise), the bulk of the compensation was related to meeting EPS targets. With the re-weighting after negating 30%, over 70% of their bonuses were tied to EPS, which is the amount of net profit (after costs, taxes, interest, etc) divided by the weighted total number of shares outstanding. This figure is used across Wall Street to compare how much a company is returning to each of its shareholders, aka how much the company's value increases for each shareholder.
Executive pay is usually tied to meeting these targets. Hitting the numbers increases the value of the stock, which in turn increases stockholders' wealth. True, board members and executives usually hold large amounts of stock and stock options, but ATVI also provides for an employee equity sharing plan, and every employee (or anyone else) has the ability to purchase their company's stock. Giving executives a big bonus is pretty much compulsory for such a strong year (even on an operating or net income measure).
The problem with executive compensation isn't with giving out big bonuses for a good year. You do a good job, you should get paid out for it. The problem with executive pay is, even in a REALLY bad year, their compensation doesn't decline in line with the company's performance.
Btw, $3 million in executive pay is considered well in line for a $10 billion company with such performance.
jgw
Gypse-scum
Posted 10:32 AM 2/7/08
@Meohfumado: i didn't know that
Gypse-scum
IDS3
Posted 10:29 AM 2/7/08
After doing all that work and overtime and getting shat on by other higher ups in the company, I wouldn't be surprised if a few devs and QA employees gave their 2 weeks after hearing this. Knowing companies like those, they'll have a small dept party, while the execs go celebrate their victoly in Vegas!
IDS3
PrivateJ0ker
Posted 10:28 AM 2/7/08
Capitalism is great, and the video game industry is becoming one of the most highly capitalized entertainment industries in the world. We need brave, thoughtful, talented entreprenuerial CEOs to step in and help support and control the finances of these growing entities.
PrivateJ0ker
XRA
Posted 10:28 AM 2/7/08
they're not talented, they are just throwing money around to get what they want.
XRA
Boudabras
Posted 10:28 AM 2/7/08
@saxifridge: QFT! You have no idea...
Boudabras
MuppetChrist
Posted 10:26 AM 2/7/08
Are the last ten or so comments some kind of fucking joke? Are they the same guy over and over with new accounts posting some kind of CEO = GOOD meme?
The games industry in general - not just games development, but games retailers as well - is sickening on an ethical level.
MuppetChrist
Gam3r
Posted 10:25 AM 2/7/08
@HenryJonesJr:
You're full of ****, blinded by your own situation. It's not possible for everyone.
Gam3r
QC8472
Posted 10:24 AM 2/7/08
@CecilTheDarkKnight: I couldn't have said better.
QC8472
Gam3r
Posted 10:23 AM 2/7/08
The American Way, give 95% of the nation's wealth to 5% of the population. They blow it on needless luxuries and waste their money, while 95% of us struggle to pay for our gas to get to work. Hell, those at the top in this business don't know much about what the hell they're doing either. Sad.
Gam3r
Aggrotank
Posted 11:17 AM 2/7/08
It's VERY difficult to envision one person's work being worth $3 million. Plus, to echo what people said earlier, you could pay half a team of developers' wages for a year with that money.
But then...if you had the influence to pay yourself millions, wouldn't you do it?
Aggrotank
djlowballer
Posted 11:14 AM 2/7/08
1. Go play the offroad truckers game (Your a winner)if you want to see a communist game.
2. Welcome to life. Nobody who has posted here(myself included) know the stress these CEOs are under. Them messing around could have cost their companies billons, forcing people to be laid off along with other cost cutting measures. Seriously, they make bank because they're accountable for everything.
But this "Pay the programmers in the trenches" crap? If entry and low level programmers wanted more money they would have taken jobs in other industries where base pay can get close to 6 figures. I had offers from some companies and laughed at their figure. You enter into that industry knowing the pay will suck until you ascend to the next level and be somebody. Remember, if the programmer in the trenches messes up, they are fired and replaced. If the CEO messes up, the whole ship can sink.
djlowballer
AdeptVoice
Posted 11:45 AM 2/7/08
The CEO somehow got to the top, passed his benchmarks, made everyone money - let him take some of it home. Who cares. Enough with the money envy. If he did something backhanded then he shouldn't be given a bonus - if it's all legit then more power to him and I hope he enjoys his check.
Uncle Sam is going to take ~40% of it anyway.
AdeptVoice
Proto_Man
Posted 11:40 AM 2/7/08
No surprise, they had a good year, of course the heads of the organization will receive compensation for a job well done. If people want that kind of pay, they should start their own development company, take it big, and approve bonuses like that for themselves. They netted just under $42 million last year, $5 million in bonuses to executives ain't bad. I'd be surprised they didn't pay dividends if it weren't a software company that sinks an arseload into R&D. Does anyone have stats on the number of employees they have? I'm sure if you spread the wealth in the form of bonuses, it wouldn't amount to much per person. Besides, being in charge of a huge company like Activision is a lot of work and stress, for those pains I think it's reasonable to pay the top dogs a nice bonus to keep them going.
Proto_Man
the_funny_thing_is
Posted 11:38 AM 2/7/08
Hey, you guys are all right! We should give all of the money to the developers rather than the executives, just like we should give more money to the people in china making your clothes rather than the stores owners.....
/end_sarcasm
Mass liberalism ftw
the_funny_thing_is
Meohfumado
Posted 11:36 AM 2/7/08
@jgw: Oh...so the CEO's are just getting "industry average" pay and bonuses. I guess that isn't so bad. I'm sure ATVI pays all their employees industry average for their positions....
Meohfumado
changkhan
Posted 12:14 PM 2/7/08
I work at an Activision studio and I'm very happy and grateful for what I make. It's given me a pretty care-free life where I can own a home and raise kids and not really worry that much about money. Would I like more? Sure, who wouldn't? Does it seem obscene when I see higher-ups in the company making millions of dollars in bonuses and stock? Sure, but... that's how business is. If making tens of millions of dollars a year was important to me, I would have gone to business school and tried to become a CEO. But I'd much rather have fun every day at work playing and making games and being creative in that way than stressing out about running a milti-billion dollar a year company where the livelihoods of thousands of employees and their families depend on the decisions I make! :)
changkhan
Pete193
Posted 12:10 PM 2/7/08
thank god some of the early communist whining has been addressed in later posts.
that means i don't have to go on a rant. ok maybe a little bit then...
capitalism and market economy aren't perfect, but there is no viable alternative, just like with democracy.
every time other systems have been tried it leads to absolute disaster. so stfu to the jealous whiners.
go to north korea if want to experience the last dying gasps of communism.
Pete193
Krondonian
Posted 12:35 PM 2/7/08
@Pete193: Thinking that huge bonuses are unethical does not equate to communism.
Now the people who were saying these executives do nothing, they're wrong. These guys are in charge of a huge company for a reason.
The problem lies with the vast payments given to CEO's. This isn't exclusive to videogames, it happens everywhere.
That doesn't make it right, it doesn't make it ethical. You're right, it's a result of capitalism, and there's no easy way to eliminate that. That doesn't mean we have to like it.
As for the North Korea remark, seriously? Cuba has one of the highest age of mortality rates in the world-- I'd say that was a good thing, it just depends on what your values are. It's never black and white.
Krondonian
the_funny_thing_is
Posted 12:34 PM 2/7/08
@changkhan: Amen. Ironically, the reason he's Republican is probably because he understands the market. I don't claim either side of the political spectrum, but the Republicans definitely have the business part right.
the_funny_thing_is
changkhan
Posted 12:27 PM 2/7/08
And about Bobby Kotick, let me say this (because I think someone else said he "bought his way into the company")... from what I heard, he's really responsible for saving Activision. When he came in, ATVI was doing horribly and he turned it into a successful company - in a little over ten years, he made it the number 1 game publisher in the world. Not bad. And he pioneered the model of buying up smaller developers, but did it in a way that the studios get to stay fairly autonomous and do things the way they used to. I've met him a few times and he seems like a pretty nice guy. The only bad thing I can say about him, I guess, is that he's a Republican (heh...)
changkhan
gewgaw
Posted 1:13 PM 2/7/08
I agree with Krondonian... I think people are losing sight here of the real issue -- it's not so much the $3m bonus for a good year (though that's pretty insane -- at those levels, money just becomes a way to keep score, not pay the bills), it's that if the year had sucked, they'd still be getting a healthy sum.
Capitalism is about investors pooling resources to acheive what each investor could not do individually. Nothing in capitalism says that the single guy in charge should get paid obscene amounts of money for the work the entire company did. If anything, it's a perversion of what shareholders should be getting -- a higher dividend and/or stock price!
How about a stock buyback instead, ATVI?
gewgaw
ostartero
Posted 1:34 PM 2/7/08
@Pete193:
Communism =/= Totalitarianism
The reason most people became afraid of communism was because the Soviet Union was atheistic and a totalitarian state. Not because they got fair wages.
ostartero
Pete193
Posted 2:32 PM 2/7/08
@Krondonian:
@ostartero:
ahhh you reveal your ignorance! now its rant time
Cuba is a miserable totalitarian state where you can be put in jail for having a dissenting opinion, for discussing like we do here.
The average wage in Cuba, for everyone from doctors to labourers, is $20 a month. ***$20 a month***... at least its equal!
you are both complete idiots. sorry but its true. study economics and come back to discuss this in ten years.
pawnage
Pete193
boopadoo
Posted 2:16 PM 2/7/08
If you think that the CEOs made a ton of money, try looking at the the income of those on the board or the investors, who make waaaaaay more than the percentage they gave to the executives, and the only input they provided was reading some article in Wired and calling "their guy."
boopadoo
ReadNLearn
Posted 4:12 PM 2/7/08
Good for Kotick and Kelly!
As an Activision shareholder, I've got to say I've been very pleased with the company performance. As well, I love the Vivendi deal which now gives me a piece of the Blizzard action. Exciting times as a gamer and as a shareholder.
If you don't think these guys deserve what they've received in bonuses, try becoming a shareholder. It opens up a whole new world of insights.
ReadNLearn
Ghede
Posted 4:35 PM 2/7/08
Curse that image! I thought this was a Kotaku Kommenting for Kash post or for short K...otaku Commenting for Cash.
Nice save.
I don't mind this. I don't exactly support it, but I don't mind. The company is doing good, it is sensible the guys running it should get rewarded.
Ghede
Terrorsaur.
Posted 6:30 PM 2/7/08
@NKato:
...
Im sure thats bull. Im sorry but if someone throws 3 million at my face im going to take it. I have a family to take care of after all.
I guess that makes me immoral.
Terrorsaur.
Terrorsaur.
Posted 6:27 PM 2/7/08
@HenryJonesJr:
Ah youthful naivety.
Have you met reality? Shes quite the bitch
Terrorsaur.
MuppetChrist
Posted 7:38 PM 2/7/08
I had no idea that so many executives and corporate shills read gaming blogs. Is it schizophrenia to defend yourself, or people like you, in the assumed persona of a neutral third party?
Someday, the dirty, unwashed mob will throw all these Marie Antoinettes, and their sympathizers, to the guillotines.
MuppetChrist
GOD
Posted 10:11 PM 2/7/08
@HenryJonesJr: I must be doing something wrong when it comes to making my millions. I guess I had better cut down this money tree.
GOD
changkhan
Posted 12:25 AM 3/7/08
@MuppetChrist: heh, paranoid much? :)
changkhan
Krondonian
Posted 1:50 AM 3/7/08
@Pete193: Man, you aren't going to last long here if you keep that up.
'you reveal your ignorance', 'Cuba is a miserable totalitarian state', 'pawnage'. Are you serious?
If you bothered to read it correctly, I said nothing of the situation in Cuba other than the fact that the age of mortality is one of highest in the world. That was only to highlight the fact that issues are never black and white.
Also, to call Cuba miserable is a ridiculously broad statement. With a population of 11.5 million, I doubt everyone is so miserable. It's a beautiful place.
When you learn that America is not the alpha and omega of civics, that other ways of running countries such as socialism can work, then you come back.
This is far from the original topic-- all I was originally saying was that I feel 'fat cat' salaries and bonuses are unethical in any situation considering the problems others face.
Krondonian
the_funny_thing_is
Posted 2:51 AM 3/7/08
@Krondonian: Unethical? So equity is the answer huh? All you have to do to see how socialism works, Eg. in the medical industry, to understand that it really doesn't. Look at any government with social medicine and check when the last time any innovations came from their system. It stifles innovation. If everyone should be equal then what motive do you have to work harder than anyone else?
the_funny_thing_is
the_funny_thing_is
Posted 3:53 AM 3/7/08
@jgw: Well said
the_funny_thing_is
jgw
Posted 3:39 AM 3/7/08
@Meohfumado:
I'd honestly be surprised if they don't. From what changkhan says, it seems like he is quite satisfied with his compensation. In industries where a company's product is only as good as its employees, it makes sense to keep employees happy, at least to the levels their competitors are keeping them. If pay levels rise, you follow suit or risk losing entire teams of developers. The low turnover shows that compensation at the creative levels is not broken. changkhan, are you at liberty to discuss any employee bonuses?
@MuppetChrist: how can a comment on a gaming blog (subjective by nature) be considered a "neutral third party?" I think you're mistaking rationality for objectivity. Perhaps it would make you more comfortable to hear a knee-jerk reaction, founded firmly in envy, replete with metaphors and florid sensationalist prose?
Most of the big video game companies were founded by programmers who created the games while people with a business education were brought in to run the company. When did all of you detractors become enamored with Activision? Kotick & Kelly have been with Activision since 1991. I'd say a $3 million bonus after 17 loyal years spent turning the company into the industry's top publisher is more than fair.
jgw
MuppetChrist
Posted 6:25 AM 3/7/08
@changkhan: I don't consider it paranoia. A string of comments appearing half-way through the comment life cycle, after enough time has passed so that person A can tell person B about such-and-such story on Kotaku, isn't exactly subtle.
@jgw: No, I don't see envy, I see individuals portraying themselves as other, less-invested individuals. I see narcissism.
I wasn't aware that two individuals were the only employees working to help the company succeed the last however many years. Thank you for enlightening me.
MuppetChrist
the_funny_thing_is
Posted 6:57 AM 3/7/08
@Krondonian: Understood
the_funny_thing_is
Krondonian
Posted 6:34 AM 3/7/08
@the_funny_thing_is: I just find these bonuses excessive.
I understand how capitalism works, I understand why this happens, I understand it's not going to go away.
Maybe unethical is a bit far, but it's not something I would want in an ideal situation.
Socialism has many flaws, I know that the lack of impetus to achieve is a bad thing. Yet some middle ground would be great.
Just like professional sportspeople who make tens of thousands per week, I don't see any way that these people can possibly warrant such a huge salary when there are so many problems out there. You can't fix them all, that much is obvious.
However, in this specific case I think that the £1.5 million could have been better spent within Activision. For example, funding some upcoming indie devs to create small downloadable titles. Funding gaming related activities, doing some good deeds to even out the 'big evil corporation' feel they give off, justly or not.
I don't know the ins and outs of Activision, they probably do a lot of the things I've said. It just feels excessive that a big CEO who already earns a big salary is giving such a high amount in bonuses. He's obviously doing a great job, but I don't see any job worth that much.
(This was too long, but I wanted to to be clear about my opinion, rather than just saying 'CEO's do nothing lolz. Giv it to teh devs'.)
Krondonian
changkhan
Posted 8:04 AM 3/7/08
@MuppetChrist: Well, I'm just a game programmer at Raven. I'm not in the corporate part of Activision and I'm not posing as a neutral third party. I've been with Raven for over ten years and I appreciate what Activision has brought to Raven and I'm happy with my compensation. This is a highly competitive field and skilled and experienced people are in high demand, so compensation tends to be pretty good, I'd say. Not $3 million bonus good, but a lot of companies have great benefits (nothing to sneeze at), good PTO, bonuses or profit sharing, stock purchase plans or stock options, etc, etc.
@jgw:
Sorry, I can't get into specifics about Activision's compensation for its employees, but I think most (realistic) people are pretty happy. And, in my experience, Activision is good to its employees (unlike some other publishers I've heard of...). I've seen some surveys about employee satisfaction and I believe Activision scores pretty high on being a good place to work.
changkhan
Pete193
Posted 9:34 AM 3/7/08
(sooooorry didnt mean to double post my comp is screwed it does this all the time)
Pete193
Pete193
Posted 9:33 AM 3/7/08
@Krondonian:
the reason i call you ignorant is because you are ignorant. everyone has an opinion about economics, regardless how little about it they know. its like me arguing nuclear physics with a scientist.
***every*** time socialism has been tried, in every country, it has turned out in exactly the same way. poverty, misery, totalitatriansm.
read your history. communist countries had to shoot people for trying to flee the country. that's not miserable?
please educate yourself before making even more of a fool of yourself. thank you for your cooperation.
Pete193
Pete193
Posted 9:27 AM 3/7/08
@Krondonian:
no you are ignorant. probably because you are uneducated when it comes to economics. everyone has an opionion about economics, however little they know about it.
***every*** time socialism has been tried it turns out the same miserable way, with poverty and totalitarianism. ***every*** time in every country. yet there will always be one idiot wanting to do it all again.
you really should study, take classes, improve the state of your brain my friend.
and to the jealous people: would you rather live in a country where everyone makes an equal $20 dollars a month? sheesh...
Pete193
jgw
Posted 4:44 AM 4/7/08
@Krondonian:
I understand where you're coming from. Out of context, $3 million is a lot of money to pay out to one person. I hope I can help put things into context.
Last fiscal year, ATVI netted $345 million (that's after all expenses, taxes, interest, etc.). This is an increase from the previous year's $85 million. EPS is this number divided by the total shares of stock outstanding. EPS is one of the main benchmarks that companies are compared against. $345 million vs $3 million is pretty small, especially when you consider that some companies who have negative net income still pay out million dollar bonuses to their CEOs. The top executives at ATVI earn just under $800,000 in annual salary, with bonuses on top of that.
Their bonus conditions were set forth last year, based on strategic acquisitions and EPS targets. Specifics weren't publicly made, but suffice to say they probably smashed them out of the ballpark.
I'm not sure if your examples of alternative use were specific or just off the top of your head, but you have to remember that, as a public company, Kotick & Kelly serve the shareholders, which means moves that they take must be in the best interest of the company. Strategic positioning is subjective, and can be difficult to sell. What is easy to show progress in is profit. These guys aren't Valve (private company), they have to answer for their expenditures on a quarterly and annual basis. Funding indie devs or "doing good deeds" are both nice things to do, I agree, but this isn't businice, it's business.
CEO compensation is an institution that isn't unique to video games. Building and running a company encompasses so many factors: competitive landscape, economy, product uptake, positioning, and many more. It's not as easy as just throwing the best video game out there and hoping you emerge number one. Executives and directors are paid for their industry insight, knowledge and connections. A lot of what they do can't be quantified on paper. It can be as small as one developer knowing the CEO from high school and thus deciding to award the publishing contract to them or as large as the decision to merge into Activision Blizzard. I agree, it can seem excessive, but normative statements only count for so much.
I'm not necessarily defending high compensation, I'm just saying that if ATVI doesn't pay them out relative to performance and to the competition, someone else will.
jgw
jgw
Posted 4:13 AM 4/7/08
@MuppetChrist: Companies tend to reward loyalty and performance. If an individual in a value-add position joins a company in the nascent stage that enjoys 17 years of explosive growth, emerging as a leader in a rapidly-expanding industry, they deserve to be paid out for their contributions.
On a year over year basis, Kotick and Kelley have DOUBLED Activision's stock value, adding almost 5 billion dollars of market cap to their company. They've grown revenues from $1.5 billion to $2.9 billion, their net income increased 400% to $345 milllion (vs 100% revenue growth, meaning the company is generating profit 4x as efficiently as before), and their EPS went from $0.28 to $1.10 (and this is after the previous year doubling from $0.14 to $0.28). These are MONSTER numbers (and publicly available from edgar.sec.gov), $3 million is a drop in the bucket if you netted $345 million. They're not doing a buyback because they are probably shoring up cash for an acquisition to stay competitive with EA.
These two aren't the only two employees working to make Activision better; I'm sorry if my previous comment made it seem as if that was my implication. However, these two are at the helm of the company, and they tend to reap all reward and all failure. They have been there for 17 years as well, and anyone else with that much seniority is bound to be pretty well compensated in both money and title.
I don't work for Activision; I work in tech finance. Part of my job is comparing companies in the same industry against each other to determine who is healthy, who is insolvent and who is ripe for M&A.
As far as narcissism goes, do you really think some dude who just got $3 million dollars is going to take time out from jetskiing with supermodels on champagne lakes to post a blog comment seeking to convince some video game enthusiasts that his bonus is justified?
jgw
ReadNLearn
Posted 9:15 AM 4/7/08
@jgw:
I really appreciate the time you took to write these detailed and highly informative comments. I certainly hope that people come back to this thread to seem them.
ReadNLearn
Arsenicberyllium
Posted 6:08 AM 5/7/08
@Pete193: What, you mean you can't afford a decent computer? Why don't you just work harder?
Arsenicberyllium
DaveStampeed
Posted 9:36 AM 2/7/08
these kind of bonuses only cause trouble.
DaveStampeed
JBunton
Posted 9:26 AM 2/7/08
Yeah, What do the developers get? They're the ones slaving away pumping out code and art.
JBunton