The CEO (and upper management in general) pay scale is total BS when viewed through normal compensation lenses, unlike normal people who are paid for their time, upper management is usually compensated on performance -but- they are compensated on the performance of their company (or division) and they get all the pie. Since nobody else's pay is scaling with performance (outside of bonuses which in my experience usually don't exceed 5% annual salary) their salaries end up inappropriate scaled into the stratosphere because the company's performance justifies increasing compensation to employees to retain them and sustain that performance. In actuality employee retention is bottoming out in the modern era (compare it to the 60s) and people are the top make f-u money that is so out of step with the people doing work at a company that it isn't even comparable.<p>Wealth and earnings inequality is a serious issue in this modern world and it's ridiculous, some people are more efficient than other people, nobody is 100x more efficient than anyone else. Take an arbitrary dude off the street and give them the experience of a CEO and I bet you that substituting him in would at most lose the company 40% of growth/whatever.
I feel like CEO pay is one of these emergent problems with our current system. We have this group of people whose salaries are just astronomical compared to the average person in the company, and whilst it's true their job could technically make more of a difference these payouts are totally asymmetrical and completely independent of how effective a CEO is.
Software engineer unions are coming, and it will start with the games industry. Attitudes within our field are changing! Used to be you couldn't mention the U-word without a dozen engineers jumping down your throat bellowing about "efficiency" (for whom and what?) but engineers are smart and you can only fool them with the same old anti-union propaganda for so long.
I believe CEOs are compensated what they are in order to get them thinking like “owners” which many “professional” CEOs are not ultimately. Mark Zuckerberg, Steve Ballmer, Gates, Jobs don’t/didn’t need large salaries because their identities were tied to their companies.<p>Owners eat sleep and breath their company in a way the average salaried employee plucked at random from +10,000 employee company will not. To the points made by other comments, the CEO is entrusted to make decisions that can ripple through thousands instantly. The amount of value they can create or destroy in an instant is probably roughly in line with the multiple they are paid over the average employee. Thus their negotiating leverage is high and equity holders are happy to pay the price.<p>Said differently, if you owned all the equity of Google, how much would you be willing to pay to ensure that equity is protected? I think that number is more than 10x the salary of the average Google developer.<p>This is subject to the laws of supply and demand like any other system and it is pretty rational.
If EA Board could snatch a CEO they like for $5M/year, they would. So why don't they? I'm sure there are thousands of professional managers with solid game industry experience who'd be ecstatic to be offered a CEO position in either company at $5M / year or less. The Board clearly think they are not good enough, and limit their candidate search to people with very special credentials (e.g., those who've served as top executives in large companies, etc.). Such a high bar limits the candidate supply a lot, and then the competition for those candidates between companies drive up the pay (quite similar to NBA or NFL).<p>Why is Board so obsessed with credentials? Is it because they want to play it safe (kinda like dumb execs choose Oracle over open source solutions because they want to protect themselves from criticism by going with a famous brand)? Or is it because those credentials are truly imporant for the success of EA?<p>I don't know for certain but I suspect the answer is kinda in between. The quality of a CEO candidate is really hard to judge. So the Boards think like this:<p>> We'll screen for all the obvious things (experience, references, track record, culture fit, etc.). Hundreds of people will pass that screen. We have no clue of how to choose among them, so we might as well go for someone who's done it before. Perhaps we don't need to be so restrictive. But there's a chance it actually does matter, say maybe 10% chance that a person who's been a top exec before will do better than candidates without such credentials. A good CEO can increase corporate value by billions of dollars over a few years, so even a 10% chance is worth a lot. So let's go bid for one of those bigshot ex-CEOs, even if that means we have to pay an extra $20M/year.<p>So in some sense, high CEO pay is due to the "religious" belief that whoever made it to the top is super good.<p>Maybe this religious belief is actually rational, maybe not. I kinda suspect the latter, since other countries seem to pay CEOs a lot less; I find it unlikely that the US CEOs have such unusually high skill compared to the rest of the world. But I don't have high confidence in my opinion.
Activision Blizzard <i>googles</i>
4k employees and..
Last year managed to re-make Crash Bandicoot & Spyro - and a CoD. That's it.
<a href="https://en.wikipedia.org/wiki/List_of_Activision_video_games" rel="nofollow">https://en.wikipedia.org/wiki/List_of_Activision_video_games</a><p>That boggles my mind.. That CEO salary seems rather on the high side.
<i>I</i> could have told them to "do another CoD" and rummage in the vault.
This is the actual report: <a href="https://www.asyousow.org/report/the-100-most-overpaid-ceos-2019" rel="nofollow">https://www.asyousow.org/report/the-100-most-overpaid-ceos-2...</a><p>The methodology "lists the 25 most overpaid CEOs, identifying the company, the CEO and his pay as reported at the annual shareholder meeting, and the pay of the company’s median employee."<p>Activision Blizzard's Kotick's $25M comes in at 306:1; Electronic Arts' Andrew Wilson's $35M is 371:1 .<p>Ronald F. Clarke of Fleetcor Technologies Inc is a generous 1517:1.
Reed Hastings founded Netflix and built it into what it is now, a dominant player in the entertainment industry. He did it through a long history of crafty, well planned technology and entertainment decisions. Not only this but he was able to build it up from so little and in such a small amount of time.
Somehow related, but what defines a fair salary? Are higher up employees actually bringing more value to their company or somehow extracting it from others?<p>If your pay doesn't match the value of your work, I guess someone logically profits from it?
As a data point:<p><i>”U.S. CEOs earn from 400 to 500 times the median salary for workers. For CEOs in the U.K., the ratio is 22; in France, it's 15; and in Germany it's 12.”</i><p><a href="https://work.chron.com/ceo-compensation-vs-world-15509.html" rel="nofollow">https://work.chron.com/ceo-compensation-vs-world-15509.html</a>
Why would anyone care about how much CEOs make? It is private industry, if the board or owner wants to pay, CEOs get paid. It is not like they are stealing tax payer's money to pay these people. When the CEOs expire, they are also replaced. It is called business.
This is the source cited in the article here <a href="https://news.ycombinator.com/item?id=19229502" rel="nofollow">https://news.ycombinator.com/item?id=19229502</a><p>I think the article is interesting enough to have it's own discussion.
Relevant book: The CEO Pay Machine @ <a href="https://www.amazon.co.uk/dp/0735212392" rel="nofollow">https://www.amazon.co.uk/dp/0735212392</a>
Technical comment: the table in the article is not scrollable nor zoomable on my Galaxy s6, I can see only the leftmost digit of the CEO salary. Quite a bummer in 2019.
This list appears to be missing the CEOs of banks. People like Jamie Dimon who profited from the financial crisis should probably be on this list for life.
large corporations seem more like corporate aristocratic states. the ceos are frequently so thoroughly divorced from the common plebs in the trenches doing the actual work that enables the company to actually exist. this divorce also seems to show up in how compensation and performance apparently has so limited correlation.
I think it's hard to find a more flagrant exploitation of overcompensation than that of Angela Ahrendts at Apple: given something like $70 million to join, quitting 4 years to the week after starting, as if just used Tim Cook's good will to profit, disgusted many of us hardcore engineers when hired that compensation saw someone with no technical history so rewarded.
Everyone is free to be a CEO. If salaries are really too high it should be easy to get a CEO position by undercutting everyone else.<p>It’s easy to sit on the sidelines and complain other people are making too much money. Remember that CEOs making less wont result in employees making more.<p>Maybe it’s just me, but HN lately seems dominated by whiny/complaining articles that don’t really contribute any knowledge or enhance our lives.<p>Wouldn’t it be better to focus on how one could become a CEO rather than knee jerk reactions to people making lots of money?