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On April 28 2013 23:48 obesechicken13 wrote:Show nested quote +On April 28 2013 16:39 BirdKiller wrote:On April 28 2013 15:48 sluggaslamoo wrote:On April 28 2013 15:30 BirdKiller wrote:On April 28 2013 14:25 wUndertUnge wrote:http://kotaku.com/activisions-boss-got-an-800-raise-and-a-watchdog-doe-483773785"Activision has a lot of money. Bobby Kotick has fat stacks, too. The publisher's CEO saw his total cash-and-prizes compensation jump from $8.1 million in 2011 to $64.9 million in 2012, reports Bloomberg, a figure that would make him the second-highest paid CEO among publicly traded U.S. companies. Kotick is due for another $16 million if the company hits performance targets, too. The bulk of his compensation came in the form of stock awards valued at $55.9 million. (Though they vest over the next five years, Activision is required to report them all at once, now.) The cash salary he got was roughly the same as always, $8.33 million." How about reinvesting some of that money back into the company instead of feeding that fat double-chin of his? Sorry, but this kind of thing makes me so angry. Rarely does anyone actually deserve to be making this kind of money, not to mention the fact that no one could spend this much money in one lifetime. Has Kotick actually made any innovations, or did he just figure out how to turn it into a money machine? It makes me sad that Blizzard got into bed with these guys. I'm going to jump in here due to the gross inaccuracies and exaggerations you've put out. First off, Blizzard Activision has done extremely well during its last quarter, generating about $1.8 billion with a profit of about $350 million. Overall in 2012, the company generated about $5 billion (memory is fuzzy) with over $1 billion in profits for the year. Compare this with other publishers like EA and the video game industry overall, the publisher has been ahead of the curve in the industry. To shareholders point of view, this man absolutely deserves a raise, but it wasn't in form of cold hard cash, it was in the form of additional stocks, not directly from profits. This is absolutely not a 800% raise, nor is it a raise at all. Instead, he simply has more stake/ownership into the company now. In most cases, one would want to hold onto stocks for few years than to sell them in order to raise cash for reinvestment/capital. It's better to simply use the profits they have or take out a loan from a bank which the company has been doing. Now, you ask "how about reinvesting some of that money back into the company", and the company has indeed been doing that last year. Of the $1 billion profits from 2012, about $500 million went to shareholders, and most or rest of the $500 million went back into the company; Kotick's additional shares are not part of this. IMO, Kotick has made the company a money making machine, and from that viewpoint, deserves the compensation. I agree that the 800% raise title is quite sensationalist and not actually true. I think you are missing the point though. A games developer should not be solely looking at the bottom line, if it was all about the money, why is Blizzard even in the gaming industry at all? Second of all. Either the shares are invested back in the company, in which case, the company still loses the 55 million while Kotick earns 55 million. Or the shares are sold to the public, in which case, more money will have to be paid to shareholders in the longterm, and Kotick still earns a substantial amount of money which he doesn't even need. Either way its 55 million the company could have used to invest back into the company. There is no such thing as free money. Even though a game company should focus on making games, the company is owned by thousands of people, groups, and institutions of diverse profile with a common goal: increase the value of the company. They effectively own the company, and therefore, the company's ultimate goal is to increase the value of the company. Creating video games is a means to this as it should. I'm not understanding the logic of: "shares being invested back into company" = "company still loses $55 million" + "Kotick earns $55 million" In form of share buybacks, the shares are erased, reducing the number of stocks while maintaining the value of the company, and therefore increasing the value of the remaining stocks. The increase in value of stocks doesn't all go to Kotick, it gets distributed evenly among all the shareholders. Based on the current stats of Activision stocks, Kotick would only earn at most $510,000 more if Activision buybacks $55 million worth of shares. "shares being sold to the public in which case more money will have to be paid to shareholders in the longterm" In form of Activision owning at least $55 million worth of shares and selling them to the market in order to raise capital. That is financially a stupid decision that can only be seen as an act of desperation. There are far better ways to raise cash for capital, primarily through bonds and loans. Not only that, but it also reduces the value of the shares which goes against shareholder's interests. Furthermore, Activision won't being paying substantially more to shareholders, only about $684,000 more per year in form of dividends, that's not bad from cashing in $55 million, although it's still a retarded move. There is no such thing as free money that's true. However, this $55 million came from something the company shouldn't or can't use to reinvest along with money from interested buyers, not from the company's cash or profits. I've read most of the posts in this thread and from what I understand Kotick gained free shares. The shares are not a part of Activision's reserves so giving them to Kotick neither hurts nor helps the Company. But where are those shares coming from? So far I've heard that they just dilute the value of shares of other shareholders. And from you I'm not sure what I'm hearing. How would Kotick make $510,000 if Activision bought all his $55 million in shares 5 years from now? On topic: $55 million is a lot. If we assume that a good developer costs $100,000 if you want to keep them for a year, and then you double that for health care, then that's 200,000 per employee for a year. You could hire 250 developers for a year to work on any product you wanted (and have $5mil left over).. An educational tool. A next gen game. Anything, but the chances of that game catching on with so little invested in marketing against the big brand names is small. Kotick happens to work at a Company that is doing well in the short term. Activision, by continuing to release extensions to its successful brands, can make more guaranteed money. $55 mil could be used on just improving the lives of the current developers too. It's a lot of money.
These shares are likely to have come from Activision itself or Kotick was given a stock option to buy these stocks at a certain price that is most likely lower than the market price. Either way, these do not dilute the value of shares.
If Activision bought $55 million worth of shares, then this would increase the rest of the shares by sum of $55 million. Kotick, as CEO, would be considered an insider, a group that owns .93% of Activision. This would mean the group's stocks would increase in value by sum of roughly $55 million * .93% = $511,000. This is the maximum Kotick would earn assuming he's the only insider which is clearly false. So he most likely gains less than that.
$55 million to a company worth $16.50 billion that just generated $1 billion profits from last year is not a lot at all. It may be to us, but definitely not to the company. It's already put in about $500 million into the company itself from profits last year.
IMO, Activision is doing well because Kotick has been aggressive with release schedules and marketing of its key titles. Call him an evil bastard, but the company has done financially well, especially when compared to other game companies. I prefer this company with an audience that seems to both hate, yet more than able to give a lot of money to this company over a company like EA, Ubisoft, Take2, etc.
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For all the haters of CEO`s pay, i have to ask you, how come companies with less well payed CEOs do not outcompit the "fat cats"?
How come investors do not dump him and use his "overwhelming" sellar to hold into high-valued employees or just to make more profit?
Aperently, the overall CEO`s level of pay is justified, since the only corporate structure left, is the best one.
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Dirty CoD money 
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CEO of a company that makes the 2 most played game currently for like 5 years(WOW and COD) on top of a that all the other games they make. They are extremely profitable in a down economy the man has kept this business strong. Get as mad as you want but if activision paid him 200 Million I wouldn't even blink. If he keeps making them money and he is doing a good job who cares what they pay him qq all you want that you don't think people need that much money that is not how compensation in the business world works he will get what he deserves and in a years time if he is no longer working well he will be gone in a second.
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I don't mind anyone making big bucks, however how about all the devs at Blizzard and Activision. Do they get the same credit if all goes well?
I guess not...
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On April 29 2013 01:33 naastyOne wrote:
For all the haters of CEO`s pay, i have to ask you, how come companies with less well payed CEOs do not outcompit the "fat cats"?
How come investors do not dump him and use his "overwhelming" sellar to hold into high-valued employees or just to make more profit?
Aperently, the overall CEO`s level of pay is justified, since the only corporate structure left, is the best one.
blizzard was one such company, then they got merged with the fat cat yo
fat cats do not try to compete, they just absorb the competition
but it's ok that's the spirit of capitalism right?
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It's really pathetic, now you guys put the next disc.
"He doesn't even play games".
A CEO is required to run the company well, not to play games all day.
You just assume he doesn't know his product as much as he should.
Then what happened to delegation and those awesome people the make the games.
Pure disgrace... It's about minding your own business.
"Hey he is old, he must not know anything about games"
What about those CEO who knew about games and bankrupts their company. I can name tens of them.
About having fun making games... A company is not a kindergarten, professionals enjoy people acting professionally. When you run 50 millions $ budget, you can act like you are 4 friends making a game. It's clockwork, it's a factory, that's why talented guys go work in small studios all the time, start ups... Then when they fail, they get back to a big company, happy to have incomes... Until they try again until they make an awesome game.
Making game is risky, Venture Capitalist understand the risks.
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Honestly + Show Spoiler +, I'm sure Blizzard got into business with activsion for the best intentions and what resulted from that is just... well this. Activision tried to put "innovation" into the games and everyone basically shut them down because the idea was so profoundly retarded, however, they are trying to make a decent image in the community. So all-and-all everyone just have to deal with it as along as Activision is around the only way we can make them innovate is voice our opinions and hope that the best comes out of it.
Kind of like how everyone unanimously agreed that the original "Real ID" thing was stupid af.
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On April 29 2013 02:07 0x64 wrote:
Making game is risky, Venture Capitalist understand the risks.
They dont understand it, they do try to evaluate if its worthwhile or not based on statistics and whatever data on hand, but they never accurately predict what will happen.
Defend your economic ideas all you want but keep some respect for the disagreement of others.
If you ask me, and I'm an avid investor in stocks, short-term goals and results (AKA useless quarterly reports) are detrimental to actual growth. I'd rather have slower sustained growth over the knee jerk reactions we have everyday on the markets. Banking and greed is ruining everything except for a select few pulling the strings or deliberatly running the world under.
Its the same short-sightedness which puts politics at a standstill. Nobody is willing to take the risk or to wait for the results of major shifts in policies.
Any idea or long term development cycle is shunned on the basis that it is not immediatly profitable or observable.
Regarding the gaming industry in general, more and more we are seeing a shift to console or mobile (?) gaming and I believe computer gaming will become a niche market once more in the future or plain out dissapear. Games are nowadays built around a limited controller or with asinine depth, as they are targeted primarely towards kids or teenagers. Gamers who started out on the computer are trending out and spending less as they get older.
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On April 28 2013 14:34 Shiragaku wrote:
You do not have to be a communist, socialist, or even a social democrat to see the problem with this...
Yes you do.
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It's times like this where I'm proud to say, I bit the bullet and didn't purchase HoTS. While there are other complaints I have, a $40 dollar **** you will do.
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On April 28 2013 14:55 sluggaslamoo wrote:Show nested quote +On April 28 2013 14:40 yandere991 wrote:
It vests over 5 years and its stock based awards. That is roughly 10 mill variable pay per year without NPV taking effect. Hardly the sensationalist 800% raise. Yeah you're right, its hardly anything. If I had 55 mill I would want to spend that in a year. Show nested quote +On April 28 2013 14:48 Klipsys wrote:On April 28 2013 14:45 sluggaslamoo wrote:On April 28 2013 14:37 wUndertUnge wrote:On April 28 2013 14:36 sluggaslamoo wrote:
Meanwhile Activision developers are struggling to make a living... See that's what I'm trying to figure out. What are their salaries? Does this man really deserve all fo that compensation? Shouldn't it go to the people actually doing the work? Being a game developer for the giants (except probably Blizzard/Valve) leads to a pretty terrible lifestyle. You basically get paid almost a minimum wage even though you are much more qualified and more deserving than the rest of the population.Most developers such as myself, started out wanting to become game developers and then came to the shocking realisation that its not what its cracked up to be and shifted to much more lucrative careers in the software development industry like web-development, where you can work normal hours and get paid 4 times as much. More deserving....? MORE DESERVING? You think that developers are more deserving that say, oh; teachers, nurses, police/EMS/Firefighters, social workers, single moms, peacecorps, habitat for humanity, big brothers/bigsisters etc... How in the...? They make computer games Stop being ignorant. Making computer games might sound fun, but the reality is the complete opposite for a lot of people. Being humanitarian has nothing to do with making money, money should go to people who put in the most effort, the hardest working developers are games developers, and its a tougher industry than all those jobs you mentioned combined. Becoming a Teacher is a 3 year course, becoming a programmer is a whole lifestyle. Did teachers painstakingly spend hours and hours every day after highschool sacrificing their social life so they could learn how to program in C++? No they probably went out to parties and had a social life like everyone else. Do they work 16-20 hour days during crunch time and never get to see their family for weeks, while your diet consists of cans of soda and cheetos? No teachers work less hours than even normal employees. Yet they probably get paid about the same amount. Ignorance is bliss isn't it?
Even though i mostly agree with your post, i find it hard to believe that programmers are forced into an unhealthy diet. Drinking soda and eathing cheetos is their own choice.
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Hm... while I dislike filthy richness, I don't mind that much if said richness is achieved by working in a private industry and doesn't hurt people. Don't get me wrong it's still excessive and could be invested in something else, but who cares, it's his business I guess.
Completely different is the situation in which privates enrich themselves with state funding, or when the heavy enrichment hurts the public services. In my country the biggest examples are the education and healthcare markets. That actually sucks balls.
And WTF to whomever said developers work harder than teachers, and other service professionals. WTF man, teachers are a crucial part of education which forms a fundamental part of the entire society. And teaching is MUCH more of a lifestyle than game development. Most good school teachers I know spend most of their time doing school stuff, my few good teachers used to study and take care of lessons etc most of every day, way into the night, for a ridiculously low wage. Plus, if you feel you made a huge sacrifice to learn C++ then maybe you picked the wrong career? You chose to sacrifice your social life, that's probably not necessary.
As a doctor I don't complain, I get decent wages, but don't say service professionals work little. Doctors and nurses can go on 72+ hour periods at work, rest for 12 hours, then go on shift again, it happens all the time. I had a friend who spent 90 continued hours at the hospital. Freaking 90 hrs!!
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I'm not sure how to react to a majority of the comments here. First, it's nice to see a company besides EA getting some hate for once, but is this really something that controversial? I thought everyone knew that CEOs of big companies, especially the more successful ones, make biiiiig money. Are people here mad because they don't think he deserves it (which is up for debate; I would argue that CEOs have really difficult jobs that require their particular skillset, hence the ridiculous salaries to compensate for demand), or are people mad because they are just against the principle of one man making so much money?
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On April 29 2013 01:45 papaz wrote:
I don't mind anyone making big bucks, however how about all the devs at Blizzard and Activision. Do they get the same credit if all goes well?
I guess not...
Can't speak for Activision specifically, but stock options are pretty common in the tech industry for the rank and file employees.
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Being that they are the only company making greater profits in the biggest bear market since the 1980's for video games, Kotick deserves to be richly rewarded. That he gets 64million is American Capitalism for ya. Hell, a quarterback for Green Bay got 110million contract too. When you are at the top in USA things get obscenely good...
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On April 29 2013 02:27 AeroGear wrote:Show nested quote +On April 29 2013 02:07 0x64 wrote:
Making game is risky, Venture Capitalist understand the risks. They dont understand it, they do try to evaluate if its worthwhile or not based on statistics and whatever data on hand, but they never accurately predict what will happen. Defend your economic ideas all you want but keep some respect for the disagreement of others. If you ask me, and I'm an avid investor in stocks, short-term goals and results ( AKA useless quarterly reports) are detrimental to actual growth. I'd rather have slower sustained growth over the knee jerk reactions we have everyday on the markets. Banking and greed is ruining everything except for a select few pulling the strings or deliberately running the world under. Its the same short-sightedness which puts politics at a standstill. Nobody is willing to take the risk or to wait for the results of major shifts in policies. Any idea or long term development cycle is shunned on the basis that it is not immediately profitable or observable. Regarding the gaming industry in general, more and more we are seeing a shift to console or mobile (?) gaming and I believe computer gaming will become a niche market once more in the future or plain out dispensary. Games are nowadays built around a limited controller or with asinine depth, as they are targeted primarily towards kids or teenagers. Gamers who started out on the computer are trending out and spending less as they get older.
We fully agree. Sorry my wording was aggressive.
I think if we go deeper, there is much to talk about. Why is banking in such a situation, there are so many roots to the evil and in the end, it's hard to draw a conclusion on what is the reason for overpaid CEOs.
In France, In Finland, you are the same people sitting on the board of many companies, it creates a lot of conflict of interest; how can you deny a raise to the guy who approved your raise last week. Again this is a very short sighted outsider comment from me.
I don't like populism. I believe in competition, that if someone does things wrong, someone else will come to take their place very fast. I think there are few counter example to this (In politics, in advanced specialized tech fields (Medicine might be one hard nut to crack)
I think you are right on the gaming industry shift, but there is also now more opportunity to write once/run everywhere than there was before. Games are developed in easily portable way, that's the reason we still get pc games. Maybe we will start to see more multiplatform games in the sense that you pause your game on the PC, go to the bus and pick up where you left it, on your phone... Who knows...
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I don't necessarily see anything wrong with this. If the man is running the company, he has the power to set his payment to be whatever he wants, so long as the company can afford it. The man is doing a job and getting paid for it. Get over it.
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On April 29 2013 01:33 naastyOne wrote:
For all the haters of CEO`s pay, i have to ask you, how come companies with less well payed CEOs do not outcompit the "fat cats"? About 10. ~10 companies (giant companies) have CEOs with total comp in the $1 - $100k range (most of those are at $1).
So yea, not very common in the US.
What is common outside of the US (and China) is to not have this >1000x differential between the highest paid and average. For example in Germany. 100x maybe, oftentimes less. For example some of the biggest companies in Germany pay $10m total comp.
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To everyone who thinks that Bobby Kotick does something for the company - wrong.
If you think that the developers themselves are responsible for the terribly-repeative CoDs we get every year, well they're not - Kotick is the CEO.
He makes the decisions and yes - they make money but of what? Of all the (not adding a racist word) who actually like to get the same product every year and still pay the same premium price.
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EPT
