Boss Battle: 3 CEOs at the Top of the Video Game Industry

In a market as challenging as the video game industry, CEOs must have the talent and confidence to deal with the pressure that comes with the job. They are ultimately responsible for the successes and failures of their companies. These three CEOs are currently on top of the video game industry, but which is the best for investors?

Still active after 22 years
Robert Kotick is the current President and CEO of Activision Blizzard (NASDAQ: ATVI  ) . He was the Chairman and CEO of Activision from February 1991 to July 2008 when the company combined with Blizzard. Under Kotick's leadership, the company has gone from the verge of insolvency to the largest video game producer in the world.

Kotick's compensation comes from an annual bonus and long term incentives, in addition to his salary of $2 million. The annual bonus is directly linked to Activision Blizzard's earnings per share, free cash flow, margin expansion, and charitable initiatives. Every year a committee sets goals for each category, and bonuses are awarded based on whether or not the company reaches those goals. If the company hits its goals perfectly, Kotick receives a bonus equivalent to 200% of his salary. During fiscal 2012, the goals were exceeded by 11% and Kotick received a bonus of over $4.54 million. This bonus helps drive the company's yearly financial results, but Kotick's real focus is long term.

Kotick receives long term compensation through stock options and restricted share awards. He has also invested in Activision Blizzard beyond what the company gives him for compensation. In Activision's recent deal with Vivendi, Kotick and Brian Kelly, the company's co-chairman, bought $100 million worth of Activision shares with their own money. This shows Kotick's confidence in the company and in himself. Kotick personally owns 5,426,527 shares, or $88.67 million of Activision Blizzard. He has taken a long-term stance with a company that he's worked with for over 20 years. He's a CEO that will work for investors because he's one of them.

The $0 salary man
Strauss Zelnick has been Chairman of Take-Two Interactive  (NASDAQ: TTWO  ) since March 2007, and Chief Executive Officer since January 2011. The company's stock has had its ups and downs, but is roughly 70% higher since Zelnick arrived.

Zelnick's CEO status comes from a management agreement that Take-Two has with ZelnickMedia. Under the agreement, ZelnickMedia supplies Take-Two with a CEO, President, and other Vice Presidents and other senior employees. In return, ZelnickMedia receives restricted stock awards, performance awards, and a monthly management fee of $208,333. The agreement will expire in 2015.

Because of the agreement, Zelnick's salary as CEO of Take-Two is $0, and his total recorded compensation for 2012 was $11,424. His compensation is mostly in stock ownership, where he owns over 5 million shares, or 5.33%, of the company's common stock. This shows commitment to the company the same way it does for Kotick. The difference is that Take-Two has fewer shares outstanding. Kotick's 5.4 million shares translates to about 0.5% of his company's common stock, versus Zelnick's 5.33% stake.

The first timer
Andrew Wilson was chosen to be EA's (NASDAQ: EA  ) Chief Executive Officer in September. Since joining the company in 2000, Wilson has distinguished himself as the Executive Producer of the FIFA franchise and Executive Vice President overseeing EA Sports. During his time as Executive Vice President, EA Sports significantly exceeded its revenue and profitability targets due to the continued success of the FIFA, Madden, and NHL franchises.

Wilson replaced former CEO John Riccitiello, who stepped down after the company produced disappointing financial results for its 2013 fiscal year. Wilson got the job over higher-ranked employees Peter Moore, EA's chief operating officer, and Frank Gibeau, president of the non-sports EA games division. The pressure is on as Wilson takes the reigns of EA to see if he can replicate the success of EA Sports on a company wide basis.

Conclusion
Of the three CEOs mentioned I like Robert Kotick the best because of his long history with Activision Blizzard and his massive personal investment in the company. A very close second is Strauss Zelnick. He has also invested a large portion of his private wealth in his company, and the company has been successful under his leadership. Both CEOs have had success with their respective companies and are likely to continue this success moving into the next generation of gaming consoles. Andrew Wilson has had success in sections of the video game industry, but only time will tell if he can translate this success to his future as a CEO. 

Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2682950, ~/Articles/ArticleHandler.aspx, 4/18/2014 10:47:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement