Midway execs get rich while company crashes

by Alexander Sliwinski { Dec 23rd 2008 at 5:00PM }

While Midway collapses, the fabulous salaries of the executives who brought the company to its knees are coming under scrutiny. TGR has a great post up about the ridiculous compensation the higher-ups at Midway were receiving over the last couple of years -- right as hundreds of employees are set to lose their jobs.

Let's see here -- former CEO David F. Zucker made $4.5 million over the past two years. Current VP Martin Spiess made a little over a half million in 2007, which is about the same amount current CEO Matt Booty also made. TGR puts it in perspective: if the average industry salary is about $50k, Zucker's take over the last two years "could have paid for all 180 of those workers [who lost their jobs] to be employed at full pay for another six months." That logic and math might be a little fuzzy, but it's always disheartening to see the ineffective executives make out like bandits.

Tags: executive-compensation, executive-pay, midway

Reader Comments (Page 1 of 1)

Moptimus Slime @ Dec 23rd 2008 5:07PM

I thought the CEO of Midway was M. Fucker, who's this new guy?

Leobebes (BDF: Braid Defence Force) @ Dec 23rd 2008 5:09PM

Do not question your masters' tactics. They reached the levels they are at through hard work* and dilligence*.

player66 @ Dec 23rd 2008 5:17PM

Execs always get paid regardless of their personal performance and sometimes, as is evident here, in spite of the company's utter collapse.

aj @ Dec 23rd 2008 6:14PM

The New York Times just ran an article about how it is entirely possible that overinflated CEO bonus packages and salaries led to the US economy collapsing.

Oh yeah, that 800 billion dollars of taxpayer money? It's going to pay the executives that ran all these companies into the ground. So the next time you can't pay your rent because of FICA, thank the CEO.

Amdin @ Dec 24th 2008 5:59PM

@aj

The FICA tax is Social Security, it has nothing to do with that crazy 800 billion. What are you saying, you want to throw your grandparents out on the street??

Come on, stop being so selfish, you're not being a very good liberal.

aj @ Dec 25th 2008 8:54AM

Sorry, I'm an idiot. FICA was indeed the wrong thing. What do they call the income taxes, then? "Income tax" I suppose.

Rocko @ Dec 23rd 2008 5:19PM

huh, i was expecting really big $$ for the CEO's salary. Honestly, $2.25 million as a yearly salary for a (former) big-name video game company...doesn't seem too disheartening. Compare it to the CEO of EA Games' salary, and then maybe you'll draw some blood from my flesh.

CaptainProtonX @ Dec 23rd 2008 5:21PM

First rule of "CEO School":

RAM IT INTO THE GROUND

Seriously...WHO THE FUCK ARE THESE PEOPLE?

ice~ @ Dec 23rd 2008 5:33PM

Who cares, they're douchebags

NoHitHair @ Dec 23rd 2008 5:33PM

This is a shocking news story. I can hardly believe that such a blatantly exploitative system of capitalism would ever produce CEOs bilking their company for as much as possible despite its performance. At least that $700 billion is to bailout the rest of us who are feeling the brunt of a greedy and mismanaged Wall Street and is going into the pockets of a single investor. Right?

How could we have ever predicted this? I, for one, am stunned.

Minimalist360 @ Dec 23rd 2008 9:19PM

Um, last time I checked it's government that stole 700b from its citizens. Without that coersion, businesses would simply fail. With subsidies and bailouts, they don't. The private sector doesn't bail out, they buy assets on the cheap. Government is the douche here, and the people just bend over and take it, and blame 'big business,' even though most of them have jobs due to big business.

Again, businesses couldn't be getting bailouts if it wasn't for government. Subsidies got us into this mess, and now we're further subsidizing to get out of it.

EmptyEnergy @ Dec 23rd 2008 5:34PM

Maybe Midway should change their business from games to making items for Home. There's a profit in charging $10 for a lamp and couch for that summer house.

Danny F. @ Dec 23rd 2008 5:40PM

Welcome to business, its sad as an accountant myself to see stories like this. I cant see how they could at least cut their own salary by 25-40% to allow more cash flow within the business to operate better.

The same has been happening with the recent news with banks now, even after getting releif money from the gov't they are still screwing customers and borrowers over like its nothing and not lending out a single dime and still taking huuuge salaries and paychecks.
We need some od movement like in V for Vendetta, because theres something terribly wrong with the way business works nowadays....

NoHitHair @ Dec 23rd 2008 5:44PM

That would require Americans to abandon their deity 'Television' and get off their lazy asses and organize. Unlikely.

aj @ Dec 23rd 2008 6:16PM

Are you now, or have you ever been, a communist?

BigD145 @ Dec 24th 2008 2:19PM

Banks, Auto companies, and basically every single corporate entity that even has a CEO. Corporations are classified as 'people' so everything a CEO does is the fault of the company. The CEO was just "doing their job" and "following orders" from the stockholders, so it's not their fault. That's basically how they see it.

Evan_ARRRR @ Feb 17th 2009 10:33AM

I can't figure out for the life of me why NoHitHair's comment here was voted down... unless you Joystiqers are so ashamed of your ritualized television worship that you refuse to accept the fact that that is part of the problem... which it is.

Bowser Rogozhin @ Dec 23rd 2008 5:46PM

Nobody has made any Booty jokes? For shame, Joystiq commenters, for shame.

Booty.

Levi @ Dec 23rd 2008 6:07PM

CEO's should all burn in hell.

How about that guy that asked for a multi-million dollar bonus despite his company losing big money? I don't really know the specifics, my smarterer friend told me about it.

Marty @ Dec 23rd 2008 6:07PM

CEO's making huge money while their company crashes and burns?

*puts on cowboy hat and affects his best southern accent*

Wel-come tuh Ameri-cuh, son!

Mr Khan @ Dec 23rd 2008 7:22PM

"but there was no cure for boneitis. One company was close, but i staged a hostile takeover and gutted it. Made a cool $100 mil"

Marty @ Dec 23rd 2008 7:26PM

Are you a shark or a sheep?

Premature ejaculation man @ Dec 23rd 2008 7:37PM

80's guy, you rule :P

ducttapeBigSexy @ Dec 23rd 2008 6:20PM

"...could have paid for all 180 of those workers [who lost their jobs] to be employed at full pay for another six months."

And then in 6 months they'd be out of a job anyway. Seriously, I'm sick of hearing about how these "evil" CEOs are making all this money - it's a private business, and if the stock holders feel they deserve it, then so be it.

Unless those CEOs have some say in the daily operation of the company I work for, they have no business saying what I make. Just like I have no business saying what they should be making (since I don't own any stock in Midway).

Seriously, this country has turned into a bunch of socialist liberals. If anything, I look at those CEOs and say "How can I make that much?", not "They should only be making as much as I do!"

Marty @ Dec 23rd 2008 6:28PM

I don't think you get the point, ducttape.

Let's say you worked at Burger King, and you could flip 100 burgers a day. Your boss thinks this is a good job, you get paid your hourly wages, and life is good.

Now say that over the course of you working at Burger King, your performance steadily declines. No longer are you flipping 100 burgers a day. Your average flips has fallen down to 70, 50, and now 40 burgers a day.

At this point, you're clearly not doing your job; you deserve a pay cut or to be fired.

This is essentially what is happening with the CEO's - while they continue to receive huge (and fantastical) amounts of money, they are not doing their jobs and are instead running the companies that they have been entrusted with into the ground. Why should they continue to receive pay increases and huge bonuses when they are laying off vast numbers of employees?

I'm not saying that CEO's are evil, and that they don't deserve pay - the ones who do their job certainly do. But you can't keep patting the captain on the back and telling him how great a job he's doing when he's busy charting a course further into the storm.

Whether or not the shareholders will (or can) do anything about all this is another story entirely, but we are entitled to our opinions.

player66 @ Dec 23rd 2008 6:35PM

I don't know that I agree with you there. I think the business principals of paying CEOs these exorbitant salaries only feeds on itself. The educational system has been practically bankrupted by having to pay million dollar salaries to former CEOs to run Universities. All businesses seem to have the same mantra, "if we don't pay them more, they'll leave and go to the competition". Well I'm sorry, but I'd much rather see 200+ employees who MAKE the products the company is trying to sell keep their jobs than have ONE person loot the rotting corpse that is Midway. We all know they're going to sell off their entire backlog of IP to the highest bidder, but in the meantime I don't see how someone who led the company into decline and certain doom should be given $2.25 million for his mediocre performance. I don't care what other CEOs make. It's time their performance is tied DIRECTLY to the company's health and overall performance. As an employee of a corporation, my bonus is tied to both personal performance and company performance. Therefore, if I'm doing well and the company does well then I stand to benefit. If I'm lousy and the company as a whole is in the tank, I get 0. I'm sure our CEO doesn't have the same incentives, but I don't see why not.

The Dark Wayne @ Dec 23rd 2008 6:51PM

why don't you quit your job for six months and then we'll see how you feel

ducttapeBigSexy @ Dec 24th 2008 1:20AM

Okay, now that I'm not in a bad mood (way too much last minute rushing around before Christmas), honestly, you guys raise some valid points. But, I do have a few questions before I think I could properly pass judgement.

First, could the CEO actually have done anything meaningful to prevent Midway from tanking? Or is this just a side effect of the recession? Second, if the CEO would have taken a substantial pay cut, would it really have made a difference? Or would employees just be collecting unemployment in June instead of January?

I guess ultimately, companies that don't have a good strategy for dealing with their CEOs (pay tied to performance, etc.) will be weeded out by the free market. I'm not saying it's fair that innocent people will be taken down in the process, but then again, life's not fair :-/

(@The Dark Wayne
It's a moot point - you're going to lose your job either way. It's not like they'd tell you you're going to be cut in 6 months anyway.)

Alberonn @ Dec 23rd 2008 6:39PM

This is very similar to what happened to Commodore in the '90s. The company was being run into the groung by execs who made insane amounts of cash.

I have no problem with execs making money. The problem is when they rake in the cash while runnng that company into the ground. Its not good for the employees or investors when a company goes under. What's going to happen to all of Midway's games?

Mr Khan @ Dec 23rd 2008 7:23PM

Collapsing company, overpaid and inept management, sounds like they've met the criteria for a government handout.

What will happen to our economy without Mortal Kombat to sustain us?

joeybeast @ Dec 23rd 2008 7:39PM

Same story with every company going under.

carg0 @ Dec 23rd 2008 8:16PM

(laughing)

uh, yea welcome to the real world people. this is not only common in all facets of big business but practically expected.

every time you hear of major corps "cutting back", "elminating redundencies", or "laying off staff" has always been bullshit-slang for "in order to sustain our (CEO's, board members) grossly inflated salaries and the lifestyle that comes with it, we must fire as many employees as humanly possible."

it's that mentality that's partly responsible for why the US economy is in a tailspin.

Graham Wellington (formerly tyrone washington, or marsha goldberg) @ Dec 23rd 2008 8:46PM

i believe him, he's wearing a tie in his avatar

carg0 @ Dec 24th 2008 1:52PM

what you believe is irrelevant. i was stating a fact.

Graham Wellington (formerly tyrone washington, or marsha goldberg) @ Dec 24th 2008 7:31PM

i was just joking, your avatar looks very serious is all i was implying

Emceay @ Dec 23rd 2008 8:39PM

Either CEOs need their pay directly tied to the stock, or they need regulation insuring that they must raise employee pay to stay in ratio to theirs. I don't mind that they make more money for being the boss, but ten-fold is absurd. Meanwhile the rest of us barely make it to the next paycheck let alone be lucky enough to have some left over to invest in shares that will just tank as the CEOs cash in anyway. The grind sucks.

bok @ Dec 24th 2008 12:02AM

Midway has only managed to stay this long because of speculative investments by the billionaire Sumner Redstone,80. Zucker, Booty and the rest of the executives plundered that company and only managed to eek out a few half-witted attempts at a decent video game. Mostly they made themselves money. The behaviors of the executives at Midway is not as interesting on the Madoff ponzi scheme. Nothing that complicated, its just a case of incompetent executive taking advantage of a aging fool with money.

air12ick @ Dec 24th 2008 12:41AM

This is why CEOs should be paid in stock, so they feel responsible in some way or form. They can either cash the stock out and make the stock price go down or keep the stock in and try to revive the company so they can increase the stock value.

PS Joystiq, your interruption ads are getting annoying, they would not let me close it out so I had to refresh so many times just to get to another page. I know you need money, but there has to be another way.

Popfrogs @ Dec 24th 2008 2:37AM

I agree. Oh and also, Protip: use Firefox3 with Adblock to keep annoying crap out of your browser.

Monte @ Dec 24th 2008 8:36AM

Ducttape,
could the Ceo have done anything to avoid this? in the short term probably not, tanking of this kind i imagine are generally the result of more long term problems... In theory, had the company be managed better over the years, it might have not been so badly hurt by the recession... For instance, the Ceo's are making huge amounts of money every year off the company, if they were to cut down their own profits to even a remotely more modest amount, that money could have been pushed back into the company and be used to help the company... hell maybe they could have even used the money to put together some kind of surplus that they can dip into any time profits are running on the low end so that they can hold on to their employees while they make new games and try to pull themselves out...

And you should not look down upon those 6 months... that's 6 more months for all those employees to look for new jobs elsewhere while still maintaining an income; it's far better then them jumping right away into welfare.

ya ya, i shouldn't pretend i know business and economics, cause god knows i don't, but what i can tell is that there is something SERIOUSLY wrong every-time this kind of shit happens and that their are certainly better things that can be done with all those millions that would be much better than just giving it to some greedy scum who is already incredibly wealthy.

tyetheczar @ Dec 24th 2008 11:46AM

NOW do all of you see why I'm a Democrat and support the little guy? Not to rub it in other's faces, but Republicans are big corporation's bitches. That's a fact. YOU look up articles for it on unbiased sites (And one would have to be an imbecile to count Fox "News" or any other Newscorp shit as unbiased).