As a close friend of a stock analyst, I found this news very disturbing because I used to love the games made by Electronic Arts (especially the original Medal of Honor games).
In 2006, EA hired John Riccitiello as CEO to replace long time leader Larry Probst. John Riccitiello (JR for short, just like JR Ewing, the evil CEO from "Dallas" - that very addictive TV drama of the 1980's) was formerly the head of EA.com, a company within EA that was responsible for their online operations. Under JR's watch, EA.com failed miserably and was shut down. So it makes me wonder how in the universe this guy got to be top brass.
JR's tenure at EA saw the company rank third in console game sales for all three consoles (playstation 3, xbox360, wii), far behind rivals Activision and Nintendo. As a point of comparison, a year before JR's reign, EA was in first position by a mile.
But here's what puts JR into this very prestigious list of very, very, very Bad CEO's. JR makes $1.19 million per year, that's fine. But in 2007, he swung a deal that got EA to buy VG holdings' Bioware and Pandemic. Problem was that JR was a major holder of VG holdings stock (having been a former executive at VG holdings). And in that deal, JR personally profited a cool $5 million from the sale. EA of course overpaid for the 2 companies, dishing out $850 million. By contrast, Activision bought Infiniti Ward (developers of the world's best selling console game - Call of Duty, Modern Warfare) for $11 million in 2007.
Just a few days ago, news published at Yahoo (bizjournals) said that EA was closing down Pandemic studios and laying off 200 staff members. So JR made a cool $5 million and then ruined the lives of 200 people (probably 1000, including their families). And of course, this had to happen before the Christmas holidays.
Nice one, JR. Not only is he a scrooge, isn't he liable for conflict of interest? Perhaps the SEC should investigate this. Hmmm.
No comments:
Post a Comment