back to article Telstra chairman: If those darn kids can earn $5m playing Fortnite, why can't execs?

The chairman of Aussie telco Telstra threw a bit of a strop at the firm's AGM in Sydney today, comparing exec pay packets to the vast amounts a small handful of lucky millennials can earn by being good at gaming's current hotness, Fortnite. According to The Guardian, John Mullen told the meeting that big old money bags plonked …

  1. Philip Storry

    Let's settle this empirically.

    We'll replace the execs with a simple randomiser that returns Yes or No.

    We'll replace the Fortnite players with bots.

    If, in six months time, the companies are still there and making money, then the executives are overpaid and pointless.

    If, in six months time, people are still watching the streams in the same numbers, then the Fortnite players are overpaid and pointless.

    Full disclosure: I'd like to place all of my money on executives being overpaid, and Fortnite players not being overpaid. Providing I can find someone dim enough to give me good odds, that is...

    1. Jonathon Green

      Re: Let's settle this empirically.

      Or alternatively we could replace a few CEOs with pro Fortnite players and Fortnite players with CEO and compare results. I have strange feeling that the Fortnite players will turn out to be better at being CEOs than the CEOs will at being Fortnite players...

      1. Anonymous Coward
        Anonymous Coward

        Re: Let's settle this empirically.

        Can I suggest adding monkeys to both parts to provide a control? Maybe even two controls - one lot of trained monkeys and another lot of untrained monkeys...

        I don't expect it to make any difference to the results, I just want to provide journalists the option to use "..."the Telstra CEO, whose job has been scientifically proven to be able to be done by an untrained monkey..." in their articles.

    2. Anonymous Coward
      Anonymous Coward

      Don't forget the footballers

      Kick a bag of wind around a pitch and collect several million a year.

  2. Doctor Syntax Silver badge

    There must be a glut of straw. It's the only explanation for so many straw men. First of all, in the linked Forbes article we have the comparison with hourly rates straw man. Then we have the comparison with the streamed games player. Finally we have the straw man of the family firm where the firm whose members can choose to pay themselves as much as they think they can afford. All this to support what are essentially auction prices for top managers.

    We're asked to believe that if company A is prepared to pay more than company B for exec X then X must be worth that. But the comparison with the games player is worth examining more carefully. The earnings there directly reflect the fact that sufficient individual consumers are prepared to pay (I admit to wondering why) an overall sum great enough to pay the gamer. In this case the gamer is demonstrably providing value that justifies the payment. The issue which both this article and the Forbes article avoid is demonstrating that the high paid exec is providing value.

    We should not be arguing that the exec doesn't put in several hundred times more hours than the line worker nor that he works hundreds of times harder but that he demonstrably provides hundreds of times more value to the business. The fact that this argument isn't being made suggests that all too often there's no such demonstration possible. The bidding should have been stopped before it got so high.

    This becomes a particularly acute issue when - we can all put names to this - the big payments are being made to execs by companies which are visibly circling the drain if not heading directly down it.

    It's impossible to avoid the suspicion that the auction is being rigged. The people doing the bidding also have their incomes determined in like manner and have no incentive to question the mechanism.

    1. JetSetJim Silver badge

      History is littered with execs who fail spectacularly for several years while continuing to rake in the cash, whereas gamers who fail may well continue to get YouTube cash from their channel for a bit, but they stop receiving the big prize money, and I'd guess that their channels soon dry up.

      For execs, I'd imagine a big issue in determining their "performance" is that some/a lot of the decisions they might make have long lead times in terms of business impact. This is attempted to be addressed in share awards, rather than salary, which in theory accumulate value over a longer period, but even then the exec can still benefit out of proportion to their efforts due to either fortune or the actions of others.

  3. don't you hate it when you lose your account Bronze badge

    Oh dear

    Sounds like Trump, started with nothing except a load of money. Oh the suffering

    1. Steve Davies 3 Silver badge
      Alert

      Re: Oh dear

      Sounds like Trump, started with nothing except a load of money

      and lost it all a good number of times and he's still a [redacted] ass.

  4. d3vy Silver badge

    "35-year-old CEO who took over from dad blasts millennials for being entitled"

    "Millenial" meaning someone who "came of age" around the turn of the century... Most millenials are approaching 40 now and are far too busy telling kids to get off their lawns to be entitled.

    1. jason_derp

      Re: That's MY business plan

      You and your etymology and logic can just get out the hell out of here! It means whoever the hell I don't like right now!

      1. MyffyW Silver badge

        Re: That's MY business plan

        In my mind (a strange and purple-pink land of liberal sentiment) it goes a bit like this:

        Baby Boomer - born 1945 - 1960

        Gen X - born 1960 - 1980

        Gen Y / Millennial - born 1980 - 2000

        Gen Z born 2000 - 2020

        And Lord alone knows what we'll call the next batch of progeny....

        1. Anonymous Coward
          Anonymous Coward

          Re: That's MY business plan

          Gen [ is next.

    2. rmason Silver badge

      Correct.

      almost everyone who uses the term "millenial" , especially in the media, actually mean "teenager to 20 something". I.e not a millenial.

      As you say I'm a millennial, i'm 36. The guy speaking, at 35, is *also* a millennial. That's how well he understands the term.

      1. Anonymous Coward
        Anonymous Coward

        I'M A MILLENNIAL. IT'S SO UNFAIR.

      2. Danny 2 Silver badge

        There is a brilliant Netflix comedy special, "Iliza Shlesinger: Elder Millennial | Gather Round | Netflix Is A Joke"

        If you don't have access to Netflix here is the relevant taster: https://www.youtube.com/watch?v=CWsJPr3ML4M

    3. Doctor Syntax Silver badge

      "35-year-old CEO who took over from dad blasts millennials for being entitled"

      It ill becomes anyone who takes over from dad to let the word "entitled" into their vocabulary.

    4. ibmalone Silver badge

      Whatever he may be wrong about, he does get this right:

      "Winning, now 35, who works at his family's business, criticised his own generation for being entitled."

  5. Dwarf Silver badge

    One difference

    If you play computer games and win, then you must be better than everyone else (or have an aimbot or similar)

    Unfortunately the same doesn't apply in companies.

    1. Yet Another Anonymous coward Silver badge

      Re: One difference

      Australians are too modest to be interested in sporting success.

      If you win at cricket or rugby you don't expect to make a big fuss about it in Australia

      1. Anonymous Coward
        Anonymous Coward

        Re: One difference

        "If you win at cricket or rugby you don't expect to make a big fuss about it in Australia"

        I thought Australians did have to make a big fuss about it now that didn't win that often. And when they do we wonder if they're still sanding off the rough edges as they try to become a better team...

    2. Long John Brass Silver badge
      Terminator

      Re: One difference

      or have an aimbot or similar

      It appears that a lot of corporations do indeed have an aim-bot; Targeted directly at their own feet.

    3. AdamWill

      Re: One difference

      Yeah. The thing that really irks me is not so much "top management gets paid a lot" but "top management gets paid a lot *even if they're really fking useless*". That study from a couple of years back which looked at the correlation between executive pay and company performance and found out there basically wasn't any - even the CxOs who were literally running their companies into the ground were still getting paid millions - is the sort of thing that's really the problem.

  6. Brian Miller

    Streamers are entertainers

    Watching someone do something for profit means the person being watched is an entertainer. So Fortnite streamers are entertainers. Who else gets paid big bucks? NFL players. A top Fortnite player gets 1/6th what the top NFL players get. That's what the free market thinks is fair. The free market also thinks that the Rolling Stones is worth $88 meeelion per year.

    If a CEO wants more money, then work to make the company more wealthy.

    1. phuzz Silver badge

      Re: Streamers are entertainers

      I realise the "are computer games sport" debate is probably not a good one to start, but certainly pro videogamers have a lot in common with pro athletes, in terms of where their money actually comes from (ie sponsorship), and how precarious that income is.

  7. Marketing Hack Silver badge

    A few problems.

    I can fully understand that some skills and people are more in-demand than others, and great execs and managers are more economically valuable than even great line employees. For example, having worked for so long on the business side in Silicon Valley, I almost never made as much money as a similarly tenured engineer. However, that was a discipline that I never really wanted to pursue, even if I would occasionally get comments about how I would make a good engineer.

    HOWEVER:

    1) CEOs are not always great. They make big mistakes, which usually are first payed for by the line employees. When I was at Embarcadero Technologies, our then-CEO invested something like $40 million or $50 million of capital in a software product called "AppWave", which probably sold a grand total of $500K or maybe $1 million before being put out of its misery. The failure of this product had wide-ranging effects on the workplace security of Embarcadero employees, and spawned a wave of departures from the company of people who felt opportunities were better at companies that didn't make these kind of mistakes. Despite the failure, the CEO stayed on at Embarcadero for another 3 or 4 years as I recall.

    2) The multiple of exec income vs. employee income keeps going up. This is indicative of the "rich getting richer" and everyone else treading water or losing ground. You can't expect the majority of people who are treading water to be happy about that situation. An exec wouldn't be happy if their income was stagnant, or if the company's sales growth or profit growth was stagnant.

    3) You can't compare exec income to something like a performer, including a Fortnite champion. For every elite Fortnite player that makes millions, there is an army of less-skilled players who make a pittance. Their compensation is based on their empirical performance vs. the competition, and they are in danger of being overtaken by that competition and losing their elite status within a few months. That is not really the case with execs, where once you are in the exec ranks, you can expect to spend years there even if you are rather mediocre. Plus when you do get pushed out for marginal performance, you usually get a very good severence package.

    1. Doctor Syntax Silver badge

      Re: A few problems.

      "great execs and managers are more economically valuable than even great line employees."

      They would say that, wouldn't they but where's the evidence?

    2. Anonymous Coward
      Anonymous Coward

      Re: A few problems.

      There's no such thing as the "football player merry-go-round".

  8. heyrick Silver badge

    Fortnite...?

    Isn't that the thing that just blew itself up in a very epic fashion leaving nothing but a black hole where the.. uh... world used to be?

    1. Tom 38 Silver badge

      Re: Fortnite...?

      Its already back. It was offline for about 12 hours, during which time people had meltdowns and withdrawal, and now its back with a new map.

      Don't quite understand it myself, in counterstrike we had a new map every 30 minutes :)

      1. Mongrel

        Re: Fortnite...?

        Well, new was a bit of a stretch. It was always Dust

  9. Pascal Monett Silver badge
    Stop

    "that it's somehow morally wrong they get rewarded for it"

    Oh, poor little rich exec would like some form of recognition other than a rather large bank account.

    Be still my aching heart.

    Okay, let's make two things clear : success in any computer game is a time-limited proposal because, as any StarCraft II top-lister will tell you, you get old and your actions per second are inevitably going to go down, meaning you will be replaced by someone younger sooner than later.

    So, just like professional sports players (which earn 10x more), your time in the limelight is on a schedule, and you don't have all that long to enjoy it.

    CEOs, on the other hand, not only get 1000 times the salary of the lowest ranks, they also have this thing called a Golden Parachute, which nobody else gets, and which allows them to absolutely screw everything up and drive a company into the ground and yet still waltz away with millions in severance pay.

    THAT is immoral.

    So cry me a river, asshole.

    1. JClouseau
      Meh

      Re: "that it's somehow morally wrong they get rewarded for it"

      your actions per second are inevitably going to go down

      "actions per second" ? Surely you meant "seconds per action" and "go up" ?

      Right ?

      Oh my oh my oh my (/goes back to playing Pac-Man. Slowly).....

  10. Oengus Silver badge

    What gets me

    What gets me is this idiot is complaining over his salary which is being increased by 34% when the company is fighting with the employees over their pay increases and offering a massive 1.5% per annum and dividends are down 30+% over previous years.

  11. Chrissy
    FAIL

    Worth every penny:

    https://www.theguardian.com/business/nils-pratley-on-finance/2019/oct/15/thomas-cook-bosses-clearly-had-heads-buried-in-the-sand

    1. Doctor Syntax Silver badge

      Perhaps those drawing large salaries for running the shareholders' business down the drain should be charged with fraud. That might concentrate a few minds about offering value for money.

  12. RunawayLoop

    The only way to describe this guy is 'wanker'.

    The big corporations in Australia happily screw over their customers on a daily basis, there was a huge inquiry into the banking sector here earlier this year which showed among their other misdeeds, banks charging fees to deceased people. Telcos also regularly screw people over (roaming fees, singing people up to premium services they never asked for).

    And he earns 40x more than the average worker.

    WTF has he got to complain about? Hence my assessment of this guy in my opening line.

  13. sanmigueelbeer Silver badge

    "Young kids are earning $5m playing Fortnite," he said, "but when a business executive devotes a huge portion of their life... that it's somehow morally wrong they get rewarded for it."

    Because these "kids" are very good at what they're doing (i.e. playing Fortnight), thus, fairly "compensated".

    Telstra executives, however, not so.

  14. This post has been deleted by its author

  15. The Central Scrutinizer

    Boo hoo

    I once had the gross misfortune to work at Telstra for 2 years. It didn't pay particularly well and management treated us like serfs. All I can say to John Mullen is.... shut the fuck up.

  16. Anonymous Coward
    Anonymous Coward

    Whatever esle you may think of him...

    ...the CEO who said " Inflated expectations due to posting the "best 1 per cent" of their lives on Instagram" is not completely wrong.

  17. PerlyKing Silver badge
    Pirate

    All that we learn from history...

    I can't help but see parallels with the French revolution, which was precipitated by the aristos who wielded political power not allowing any reforms which would have eased the lives of the masses (and overall improved France's economy) at the price of making themselves slightly less rich. In the same way, C-suite execs are the ones hiring each other on these sweetheart contracts and they're never going to change out of the goodness of their hearts. Unlike 18th century France most of these companies are ultimately answerable to shareholders so there is a glimmer of hope that change can be effected without the help of Madame Guillotine.

    1. lglethal Silver badge
      Devil

      Re: All that we learn from history...

      "Unlike 18th century France most of these companies are ultimately answerable to shareholders so there is a glimmer of hope that change can be effected without the help of Madame Guillotine."

      Aww cant we please get out Madame Guillotine.... Please? I can think of a few very worthy recipients of her attention...

  18. Wonder Dog

    Situation normal

    Telstra is full of toss pots like this guy. It's a company adrift and on the wrong side of the technology wave. My guess is that eventually it'll get reabsorbed by the government..in the guise of an NBN merger.

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