I'm extremely interested to see how this plays out. Giving large cash bonuses seems like it could wreck morale just as easily as it could boost it. And now when they're hiring in the future, they have to wonder whether the candidate is more motivated by the money or the love. And will the employees expect a similar bonus next year?
I'm not saying he shouldn't've done it. I am, however, extremely curious. This is the sort of thing that I have wondered why more companies don't do.
I used to manage a team within the Visual Studio team, and we regularly had people come in looking at a 2x-4x pay cut (because they were going from "CTO" or "Chief Architect" titles to "Software Development Engineer" positions). I never had any experienced developers fail to accept a position based on the lower salaries I could offer at MSFT vs. what they were making in other fields or higher organizational positions. Further, I made it clear at the time they were applying that we couldn't come close to their current salaries, and while it's been a long time, I can't remember anyone turned off by that.
Many people, particularly those at the top of their field, seem to be motivated by the opportunity to work on hard problems with people smarter than they are, so long as the pay is sufficient to maintain their family's lifestyle.
The "value of money" for an individual begins to diminish quickly once it surpasses the quantity required to comfortably survive. If you make $250,000 a year, it would be reasonable to take a 2x-4x pay cut for a more satisfying job. If you make $40,000 a year that's probably not the case.
This is something I discovered by accident over the last decade. At first I spent most of my income. After normal expenses I would spend what's left over on entertainment and status symbols like newer cars, etc.
Eventually I discovered that I have no real desire or need to spend more than $1500-1800 a month. That's probably very cheap to those living in silicon valley but I'm in the midwest and earn more than triple that amount after taxes.
Watching savings pile up is satisfying for a while, but eventually I had to come to terms with what I'd like to achieve in my professional and personal life, aside from money. I'm currently going back to school and it's the best decision I ever made.
Just out of curiosity: how old are you? I feel like I'm in the same situation, I make more money than I can comfortably spend and so I save it. But I do like seeing my savings rise, and thinking/dreaming about buying a house with no mortgage in the future. At what point did you stop caring about how much money you had saved?
This is the essence of lifestyle design. Finding the optimal balance between income, free time and mobility. (For me, free time is the most important one by far).
I have a pet theory: after a certain point, salary increases become a proxy for "what is my status in society?". If you don't give a shit about that, or derive your status from something completely different, the need to pursue money in a frantic manner goes away.
Probably none, though I'm putting words into their mouths. Many seemed to be looking for the mentoring, "office next door to <X>," and team aspects as well. Modulo health insurance, many of these people probably didn't really need any income at their wealth levels.
Extending that, a huge number of people I worked with at MSFT were quite wealthy and just hanging around because it (developer divison) was a fun place to hack. I think the biggest cause of retirement was reaching that point where the children head off to college and the spouse wants to move someplace less dark and dreary.
But, my experiences are certainly not a representative sample of the population!
That's a bit of a platitude, though, isn't it? You could say the same about anyone -- nearly all of us could be making more money, if only we'd give up family time, relationships, hobbies, whatever. But we don't judge those things in pure dollar terms, they're intangibles.
That's what makes stories like larsberg's interesting -- if we really were "just trading money for something else they valued greatly." then we'd see these types of stories more often -- but we don't.
Well how much of "just trading money for something else they valued greatly" works in real life is worth pondering.
After a while most people will realize that your spouse/kids would rather need money not time from you. Its far better to have a rich dad/husband than poor one who spends more time.
Over time even the guy who made this choices will know that, every time he sees someone buying a new car, going on a costly vacation, sending kids to a Ivy league and all the big money luxuries. Inevitable peer comparisons happen, and things get out of hand pretty quickly.
You generally get to hear 'How I learned to be happy with little' kind of stories from such people.
Its far better to have a rich dad/husband than poor one who spends more time.
No. And I don't even know where to begin to answer that, more than that you guys are talking extremes. From a millionaire that's never home to a guy not being able to pay his share of the rent but stalks his kids wherever they go.
Both would be far better of, in my opinion, by settling for something more in the middle.
We're not talking about working 100 hours a week at the investment firm vs. part-time at the burger shack here, though. larsberg's talking about managing a team at microsoft -- presumably the pay there is okay.
"Over time even the guy who made this choices will know that, every time he sees someone buying a new car, going on a costly vacation, sending kids to a Ivy league and all the big money luxuries. Inevitable peer comparisons happen, and things get out of hand pretty quickly."
I really don't know what to make of this? My family can't be happy if my kids don't go to Princeton? What are these "inevitable peer comparisons"? Will you really have a ton of marital strife if your wife isn't driving a German luxury car?
"Its far better to have a rich dad/husband than poor one who spends more time."
This is just plain wrong. Wrong and stupid. If you honestly think this... I feel really bad for you. I can't imagine what might have occurred in your life to lead you to this conclusion.
I think more than anything, the metaphysical view of what money is is totally bizarre. It's like money gets lumped into this special category of its own.
Money is just society's tickets to gain access to the collective productive capital that is the the totality of the economy. Money is just crystallized favors.
Try to replace "money" in your head with "favors" and you will see just how bizarre many beliefs about it are.
You may imagine that to be true, but more likely than not, you don't know what you are talking about. For one thing, Ferarri's aren't known for comfort...
OTOH, underground trains never suffer from traffic congestions. I feel more comfortable spending constant 0.5 hours in the underground than spending variable 0.3–2.5 hours in a traffic jam.
Sometimes it happens that you have made all the money in the world after a hectic period of years. And by his definition "CTO" and "Chief Architect" perfectly fill in those roles .Anything more than that becomes delta. So you now decide to keep yourself busy in a less stressful job, for little money. And then do whatever you want to do, as you have all the money in the world to back you up. You can fail, get fired or go on long vacations without worrying much about your employment.
Not just developers, and not just people on top of their field, will take less money if it means a better quality of life, all the time.
This can be as simple as a shorter commute, or simply a less stressful job. As long as this still results in a minimum level of income they've decided they need.
That makes no sense. Plenty of people I know have applied to jobs that were more interesting to them than their current work, even taking paycuts in some cases.
That's not really the point I was trying to make. I also know people who have chosen lower paying jobs based on criteria other than pay. I've even done it myself. But it's still a job and I was still still being paid.
My point was that if it were possible, the vast majority of people would prefer not to work at all and would like to spend their time on entertainment and leisure activities.
The vast majority of people think they would prefer that because it's not a realistic option for them. But a lot of people who actually have that option choose to work anyway (quite hard in many cases). Any many of those who actually do choose to spend their time entirely on "entertainment and leisure activity" become deeply unhappy.
When money isn't an object, people would probably do things like ski and hike and travel until it became boring. Then they would happily work, especially if money isn't being worried about. When people are struggling, they will want to work, but will probably want to make as much money as possible.
I know I use "probably" a lot, but it is what I would do. I could imagine others following the same path. Just my $.02.
He never said he was doing code and math for his employment. He may be coding on his own projects. I guess this could still be considered as "improving their skillset"
jlarocco, I'm like you. I work for the money. If money were no object, I'd be spending my time skiing, rock climbing, and snorkeling in interesting spots all around the world.
I do wonder if the "vast majority of people" are this way, though. I've read that a lot of people derive great satisfaction from the social interactions they have at work, and that their work gives them meaning; when removed from work via retirement they just can't think of anything else to do with themselves.
Other people have the happy coincidence that they love doing exactly what they can be paid for (e.g. software development). It would be super nice if I could just get paid to go skiing every day, but alas that is not the way the world works.
What jarek said! ("And I'm sure his job duties never cause him stress and decrease his enjoyment of the skiing...")
I like skiing, not teaching people how to ski. I _have_ debated trying to get an instructor job in order to get more time on the slopes. But I've never lived close enough to a ski area to make this feasible. And in truth, I'm in no position to teach anyone how to ski; my skills are at the intermediate level.
Recently I moved pretty close to a ski area. Next season, I do plan to look into work as a ski instructor, teaching raw beginners. It should be interesting to see how this pans out, or whether I can even get a job doing that.
I have tried to get a job at a rock climbing gym in order to get more time climbing. I applied, without mentioning my dislike of customer service.... But I was turned down. I'm suspicious it might be because of my age - not young enough - or because, as a long-time software developer, I have completely the wrong background for it. Hard to say. But there you go, even getting an entry level job requiring minimal skills and paying a low wage isn't so easy.
My interest in programming was pretty high when I got into it. After years of working in jobs with various levels of aggravation and stupidity, my interest has waned to the point where it's hardly a bearable way to make a living. So for me, doing something for money can turn it into a real chore. At some point you just get a visceral nasty feeling when even thinking about this thing that used to excite you.
At this point in my life, I'm going to be extra careful about what I do for a living. I don't want to lose my love of rock climbing, skiing, or travel, by performing contortions to try to make a living out of those things.
In my experience, people who get paid for their hobbies still love the hobby, and accept that the job portion of it carries some extra responsibility which is pretty easy to accept when compared to "how would I ever get to ski this much or at this level without the job". Because in general the other aspect not being discussed, is full time leisure may not increase ability as much as having the accountability on it. Not everyone wants to be best, but it keeps the hobby interesting.
> In my experience, people who get paid for their hobbies still love the hobby
There is a world of people who liked programming and ended up burned out and unable to program after CRUD-for-enterprise jobs that would suggest otherwise.
"How would I ever get to program this much or at this level without the job," they ask. They've probably accepted it comes with responsibilities and managers and dealing with clients and clients not knowing what they want.
Then they are fools and or don't have a family. As a developer with around 10 years of professional experience, I've been conned so many times by this when I was young and foolish. "Work here because we have fooseball table, free beer on Fridays, and cool projects." (But please ignore the fact that you are being paid $20,000 below market value.)
There is a lot more to life than money. For a lot of people, as long as they make enough money to life a comfortable life, they are happy to make less to work on exciting projects. If I was offered $100,000 to do boring work vs. $50,000 to do exciting work I would choose the latter (provided the $50,000 covered my living expenses).
That does not make me a fool. I may not have a family but those rules would still apply. As long as I could provide for my family I would take the more exciting job.
There is a lot more to life than money. And that lot more can be done, more fun can be had if there is more money.
Imagine a situation where you have steady source of Income for life. There are better, interesting, challenging and more fun things to do than sitting in a cubicle for 16 hours and slogging till your bones hurt.
What are you are saying is a typical of 'Enjoy the journey, forget the destination' kind of message.
However you can be happy with you misery. That makes you happy, but still that does mean you live in misery.Earning little, making sacrifices and then being happy about it doesn't quite actually mean you are happy, rich and comfortable.
It just means you have come to negotiation with your self that you are ok with that.
I took a pay cut a few years ago to take my current job. What I got in return for that cut was way less stress, a more fulfilling work life, more quality time at home, etc. When people say "There's more to life than money" they are talking about things you literally can't buy.
I am talking of the same thing. If you had that steady stream of incoming money you wouldn't even need your current job. You would have all the time for yourself, and more quality time for your family.
You're right there is: freedom. The most important thing for me in life is freedom. To get this, you need money.
You may be able to take the $50K and just get by, but I would suggest finding an exciting project that pays $100K instead and save the money you don't need for your future. I did just this 5 years ago and it gave me enough runway to start my own business when I lost my job.
"As long as I could provide for my family I would take the more exciting job."
You never know when you will need money. Doctor bills? you lose your job and can't find another one? kid's college education?
Kids are really expensive.
You also only have one life. Your employer is getting the majority of it (and most likely getting rich in the process). You should get paid what you are worth.
Most developers don't do this (I used to be one of them).
Yes, and that includes more being to life than work.
So, why'd would you work your ass off for someone for less, when you could be paid more and have more income/time to pursuit those other "more things in life"?
Nope. I'm not a fool and I do have a family, but I ended up in a very well-paid but soul-destroying job in a ReasonablyBigCo. I quit to work for a well-run SmallCo for less money because I am a happier person now. I don't regret it even for a moment.
I'm currently employed for less than 30K USD a year (trying to remain vague). Obviously there has got to be some sort of advantage somewhere..
- Foreign country
- Low cost of life
- High quality of life
- Learning interesting new things
- Current position prepare me to execute vague World Domination plan
- Heck, freedom!
Once done in my current position I'll even take a break for a couple of months working for free doing computer stuff with migrants.
I certainly made choices on the way but I don't regret not having a car, a house or a family.
How about you are the fool of your own decisions (mortgage loan, family expenses, etc..)?
Would you be willing to say a bit more about which country and how you got there? (My E-Mail is in my profile.)
I'm currently in Switzerland, but I plan to live in Mediterranean countries other than Italy and Spain for some time in the future. I only ever lived in rich European countries, so I would be interested in your experiences.
They are fools if the job they are going into is not actually a more rewarding work environment, or if they take an extreme hardship to work there.
But if they're still making more than enough to pay their bills and their mortgages, feed their families, build up savings, and have a substantial amount of disposable income remaining then it seems like a perfectly fine decision to me.
Working a job you hate merely so that you have an excess of money to buy things you don't want or need is a foolish and self-defeating choice.
What if the wording was "Work here because we've already increased length and quality of life for people with $ILLNESS, and we're working hard to find a cure. You wont be working on cat pictures. (But please ignore the fact that we're funded by charities and cannot afford to pay market values)".
When people are applying for a job you can be 99% sure they're motivated by the money
I would challenge the 99% rule (I know it wasn't derived scientifically so I'm not poking fun). Speaking purely from my own experience and my knowledge of two of my coworkers, money is always a factor, but once you get past enough to live comfortably, other factors start to come into play. I don't want a larger house (I'd like to pay it off, instead), I know I probably have a raise coming soon and I don't care how much it is for. About 5 years ago I cut my salary off at $60,000 before taxes. I get paid much more than that, but that's all I see in my main checking account and I'll probably drop that to $40,000 soon (a story for another post, perhaps). My closest coworkers (the ones who are the top performers IMO) feel the same way. The environment is good, the work is fun, the money is enough even though we could all do better elsewhere.
I've been given other offers, some that were very attractive and paid more. I've not accepted them because they tended to be too narrow in what I'd be doing. My job as a corporate drone writing software is fun and rewarding well beyond my salary, I have a great boss and great coworkers and I'd quit and head someplace else for $50,000 if that changed. Maybe I'm not a typical HN reader in that I have no desire to create a start-up (the business side of it is no fun) or work for one (there's no such thing as job security, but it's admittedly worse and while I'm no stranger to "crunch time", my desk will never have a sleeping bag under it).
I'd spend most of my days skiing
Are you sure about that? My dad's life plan was to retire at 35, and he did. His thing was golf, not skiing, and he did a lot of it for half a year before he took his family's retirement savings and purchased a quarter of a small business where he also took a job as the only salesperson. "You can only play so much golf" is the excuse he gave. I don't know his net worth, but he has two homes and one is on a lake that is exceptionally prime real estate. He's past his 60s and still working and I give him another 5 years before he tries to retire again.
I actually said to my wife yesterday evening that I'd rather ski Polar Star Couloir than found a billion dollar business (a terrible thing to admit on HN) - she was not amused....
[Of course, the right attitude to take is to found the billion dollar business then ski insane couloirs in the Artic ;-) - not that any of these are exactly on the cards at the moment].
[Edit - Apologies for the ski fanaticism, it's the time of year, I start foaming at the mouth when anyone mentions skiing].
More importantly, there is a lot of room for disruption in the ski industry, and some interesting startups are pushing the edge of ski design. For example DPS Skis has developed the Spoon--"the first ski built with reverse camber forward, back and torsionally." Also, I would be interested in another alpine touring binding to compete Dynafit and its clones.
Well, if I was a billionaire, most certainly my priorities would be pretty different.
However, if we're talking about people applying for a job in a field where a bit of grey matter is required, that's nonsense. Of course some of them are going to sign up to the highest bidder (like you, probably), but there are lots of us who prefer to be in a good environment, where we can grow and also have a good time while doing it.
Two years ago, I quit my job and joined a startup, taking a 15% cut in my salary. Today I make almost twice that in that same company, I've learned a lot, and haven't had a regret ever. I didn't do it for the money. I did it for the work environment and the chance to enjoy my work more.
Not necessarily. It's easy to imagine mojang as a producer for indy game developers. Make the game you want, we'll support you with a paycheck, art, music, marketing, all the stuff around the game. In exchange, you get something like royalties for big games.
Honestly i'm surprised you don't recognize this model from movies and music and books and every other kind of media ever. It's possible to have endless debates about compromising artistic vision, but the fundamental idea is the same. We'll support you so you can create the art you love, in exchange we're keeping some of the profits.
There's currently no reliable way to predict what movie will hit the billion dollar mark and what won't. So I don't grasp why movie studios don't take "risks".
You can't dump $200 mil on a 15 minute silent short and expect to recoup your expense; unless you actually resurrected Charlie Chaplin.
However, I don't understand why Artist A needs $25,000 to make a multi-platinum record and why Artist B needs $2.5 mil. Personally I think you'd be better off spending $25,000 on 100 artists and see what shit sticks to the wall.
The irony is, if someone actually said "Hey we're willing to pay for you to write, but we're going to keep 80% of the profits" I'd say "fuck yes!" Because 1) I'm going to get paid less conventionally anyway, and 2) I might actually be able to produce something if I could quit my day job or even work 4 days a week.
When you only have time to write 1000 words or so in a week, how are you supposed to keep focus for 80 weeks to actually finish something. How are you supposed to focus on the same project, keep the same ideas/feelings/themes running consistent? In high school and college I usually got around 120,000 words written in the british summer holiday (like 6 weeks, if that). I wrote a novel and a half whilst doing a reviewing job after graduating. I can still do it, it's just finding the free time.
You can't dump $200 mil on a 15 minute silent short and expect to recoup your expense; unless you actually resurrected Charlie Chaplin.
Well, if you could make a $200 15 minute B&W silent short XXX movie with Angelina Jolie, Scarlet Johansson, Jessica Alba, Megan Fox, Brad Pitt, George Clooney, Will Smith, and Jude Law, I think you wouldn't need mr. Chaplin.
Your comment appears to be a complete non-sequitur. You have no reason to think I wouldn't recognize such a model. Such a model has nothing to do with applying for a job at a game studio when you don't need money. And Mojang isn't following such a model at this time, nor is there any serious reason to believe it will in the future just because it might be compatible with Notch's personality.
This may or may not be true, but before you can even start to make claims like that you have to consider (by which I mean place a monetary value on):
+ Perks of the job (not benefits package), for instance I regularly turn down very well paying jobs offered to me because my underpaying job as a university researcher gives me opportunities It would cost a significant amount of money to buy, if that is even possible.
+ There are plenty of people in the world who get paid to do the things they would otherwise call a hobby. This means at least doubling the salary to get them to switch, because they would have to figure out what to give up in their lives, and be compensated for that, because a job doing the hobby gives more time for more extra hobbies. Spending 8+ hrs a day on something else means less time.
+ Similar to the perks section: a good working environment is a good motivator to apply for a job, even for the same salary and work, over a bad working environment.
+ Family considerations, e.g. closer to spouse/kids, less commute, etc. all contribute in non-monetary ways.
All that being said, I still am not sure I agree with the PP, just stating that a one-dimensional characterization of job application is perhaps too simple.
I think that is completely opposite of the employees at Mojang. They promote a fun, take money off the table and make great games atmosphere. If people would rather ski than make games, then they wouldn't work there.
What the hell kind of blinkered world view is this?
I applied for my current job (a game developer at a small company) because I love the work. I took a 1k/month pay cut from what wasn't a spectacular salary in the first place.
And now when they're hiring in the future, they have to wonder whether the candidate is more motivated by the money or the love.
I'd be surprised if Mojang didn't hire in the same way as most small companies with huge industry respect (like 37signals or GitHub). That is, head hunting specific people they want rather than the usual free for all job application process.
(Update: I need to clarify that 37signals and GitHub don't always hire through headhunting. They're just the type of company I was referring to.)
A few ways. One way is that once employees receive a bonus, they will probably eventually register it as compensation. Then they will expect it. Then you there will be future employees that might expect it or feel bad that they missed it. etc etc
I don't think that's the case, I think that a big bonus such as this would generally tend to amplify whatever one's pre-existing sentiment toward their work place was. If they grudgingly go to work and do so only for financial reasons then a big bonus could lower morale. It could lead to a temporary emotional high which comes crashing back down once it's passed into a new low as folks re-evaluate their enjoyment of their work, calibrated to a new scale. More so, being more financially secure could lead to more pent up hostility coming to the fore, as people stop being polite or stop cooperating at work (the "fuck you, I'm fully vested" mentality).
However, if the work place is a good one and the people there honestly love working there then I don't think big, irregular bonuses are at all a problem. They will still go back to work, and they will still enjoy it, and perhaps they will be a little bit more comfortable in the feeling that they can choose their work based on how much they enjoy it instead of out of a perceived financial need to try to climb the management chain or such-like.
Also, the problem of trying to figure out whether candidates are just there for the money applies even when the company is merely offering industry standard wages.
That has overtones of the usual scam to get programmers to work for less money. "What you want more money?! Are you not happy here? Aren't you here for the fun? You're not just here for the money are you?"
a more typical way would be to give people equity based on impact with vesting - which, i think, avoids a lot of the morale downsides. i'm curious why he didn't do this instead.
Because giving out equity leads you down a path to going public? Not everyone wants to go public if you rather enjoy running your company as you see fit and just having fun doing it.
they have to wonder whether the candidate is more motivated by the money or the love
Personally, seeing this makes me want to work for him solely because in addition to seeing him as extremely competent and clever, I now see him as someone who is generous and clearly values those 'under' him. I would take a below-average salary to work in an environment like that, regardless of whether there is ever another big payout.
Dividend is generally taxed at 30% in Sweden so a fair bit of that will be paid in taxes. Depending on how Notch decides to pay out the money to the employees they may have to pay even more.
If it is paid out evenly and as wages it will be about 66k SEK/month per employee, that puts them well into the top tax bracket. Assuming the tax authority counts it as normal income they will be force to pat ~56% income tax a fair bit of social securities and employer tax. Assuming this they might get about (as a guesstimate) 20-25k SEK/m or 240-300k SEK total, after taxes. Not shabby at all, that is close to what an average worker in Sweden earns per year. And that is bonus alone.
None the less; Cheers Notch for thinking about your employees! : )
Edit: Gifts are no longer taxed in Sweden, luckily! but it is likely that the tax authority will regard it as income or bonus rather than a gift.
I don't see how it can be payed out as wages. The dividend is payed out to Notch. Thereafter, it is his private money, to spend as he see fit. When he hands out the money, it is coming from him, not from Mojang.
I can see how the tax office could disagree with this, though...
Not sure how it's going to work out in the end, but I'd like a followup to this.
I must be around that here in Germany, but my life quality is so insanely high that I can't complain. And if I become unemployed, go back to education, or become sick, it'll make zero difference to my living quality.
I know socialist sentiments aren't very popular on Hacker News, but some form of wealth redistribution is going to be _necessary_ in a couple of years if the richest continue getting richer (which they will, due to technological advancement) and automation becomes so efficient that most simple jobs disappear. A considerable part of the population will simply be unable to do meaningful work in the private sector. The Luddite argument will eventually be dead, at least for certain groups in society. So the choice is letting them starve, or subsidize them somehow.
How this "wealth redistribution" should happen is an entirely different question, but a flat tax rate including on capital (very hard to implement in practice) or simply flat taxation of everyone above a certain, very high net worth are possibilities.
Note that certain countries already have de facto subsidy systems for low-income/unemployable groups already, e.g. Norway.
The rich always kept getting richer over the years and the poor kept getting poorer. There's nothing new here.
Eventually, we all die. Plus business models and companies get disrupted by technology all the time.
taxation of everyone above a certain, very high
net worth are possibilities
In my country the contribution for health-care is 5.5% of my income. This means that I'm paying 10-20 times more than people that sit on their asses all day, doing nothing and complaining about budget cuts.
Giving money to the poor is not the solution. It just encourages sloth.
56% is a sane top tax rate if you feel that you make enough money and you feel that you want to contribute to the infrastructure and services that the government provides.
56% is a low top marginal tax rate. The United States had a top marginal income tax rate that was higher than 56% between 1932 and 1980. It was 90% between 1950 and 1963.
To be fair though, the effective net tax rate in the US was not much different than today back then. That 90% tax rate was essentially fictional in that no one paid anything close to it after deductions and loopholes. It was theater so that politicians could claim the wealthy were paying high taxes.
Reducing the marginal tax rates on income in the US was largely revenue neutral due to the incremental elimination of loopholes, credits, and deductions concurrent with those reductions. If we actually reverted to the tax policies of 1950s I do not think you would be impressed with the distribution of taxes paid.
Ironically, the low marginal tax rates we have today reflect the historical truth more closely than the nominally high rates of the past.
My personal opinion is that anything over 50% is too much. If I work hard and earn a lot of money I should at least be allowed to keep half.
That said, to reach the top income bracket and get a tax between 52-59.9% (Depending on where in Sweden you live) you have to earn somewhere around $80k/yr. Not entire sure about the number but it is in that region. I wouldn't consider that very wealthy, especially not if you live in Stockholm, expensive city to live in.
I haven't seen it discussed much, but i actually find it odd that tax brackets have an upper end. The tax rate should be a formula that keeps increasing with wealth.
Then you'd have a point where tax = 100%, or at least where income after taxes doesn't increase with increase in income before taxes.
Thus you completely destroy the motivation of some very important enterpreneurs that just want to earn more than anyone. And they build their business somewhere else.
I agree with Jarek, plus there's a law of diminishing returns from wealth above a certain level. Look at people like Bill Gates, calling for higher taxation and distributing their wealth voluntarily because (i believe) they find their wealth level absurd. Wealth inequality is a mother of lots of evils, and taxation would be the easiest way to balance an economy, which in the end would benefit a capitalist society.
Yeah, I understood that. But I tried to point out that it is really unnecessary as the total amount paid is much higher thanks to the fact that taxes are paid in percents. It's a really nice idea for populists but probably wouldn't be good in reality. What have to be done is limit the amount of loopholes where really reach are able to much less then they should.
I don't play minecraft.
I'm not a fan.
I wouldn't know Notch if I tripped on him.
I gotta say hats off to the man. Doing something good for others at your own ( great ) expense when not compelled to do so is unusual. Most people would have spent it on themselves somehow. wtg man.
iirc, Steve Wozniak did something similar: when Apple went public without giving anything to the early employees, Woz basically gave/sold (cheaply) them stock from his own holdings.
Let's also not forget notch likely already has another 3MM (and then some) in his bank account.
That doesn't make his move any less glamorous, though. You don't often hear about people just giving away that kind of money - whether they're multi-millionaires or not...
Didn't he pretty much develop Minecraft single-handedly? If so, I don't think it's necessarily "right" to share the profits with employees who joined after the work was done.
It's his money of course, he's free to do what he wants and generosity is always nice to see. To my mind though, it would have made just as much sense to give it to charity or anyone else.
I'd be much more interested to hear that he's giving meaningful equity to new employees. That way they could actually make life-altering money if they help create another big hit like Minecraft.
I doubt his employees will appreciate getting another $3 million split across dozens of employees if they help create a new $100M game.
He developed it alone originally yes, but he retired in November 2011 and since late 2010 it's been developed (in part) by Jens Bergensten (http://www.minecraftwiki.net/wiki/Jeb)
Edit: also Mojang has revenue from the pocket edition of the game (for iOS and Android) that Notch has no involvement in, so it's beyond him being the only bread winner for the company.
Sweden has high taxes, depends on how he does it. If the money is first given to him and then he redistributes it then he'll most likely lose $1.5m on tax (50%). Otherwise, no idea.
I think that like share dividends in the UK, it attracts a lower tax rate. I think Sweden is 30%?
However, "gifting" monies to people is a strange area, with various odd rules.
You can only give away a certain amount of money a year in the UK, and that depends on who it is you are giving to or even the circumstance. (EG, you can gift £5,000 as a wedding gift.)
If I had to guess, I imagine he refused a dividend and instead had the company issue the equivalent sum in bonuses to the employees. Tax wise it'd make no sense for him to take a dividend and then create havoc by gifting it. (At least, under UK style tax law.)
Gifts are no longer taxes in Sweden but it is likely that the tax authority will regard it as income (Or bonus) and they will pay 50-56% taxes on the lot. Quite tricky but I assume Mojang has good accountants that will work it out!
Yeah, it should get caught somehow otherwise companies would just gift their employees every month ;-)
So I suspect gifting would still be tax inefficient, since he'd have paid taxes on the dividend and then employees would pay tax on the gift.. whereas skipping the dividend and just getting bonuses could cut out one whole layer of tax.
There's no tax on gifts in Sweden, and the dividend tax is 30%, compared to 50% or so on salaries. So if the IRS doesn't consider it a compensation for work (which they will, of course) gifting the dividends would mean less tax.
I don't know how it would work out in this particular case (there might be other juridical complications) but Sweden has no taxes (any longer) on gifts.
But once the dividend tax is paid to make the money Notch's, and not Mojang's, the money no longer comes from the employer, does it? </not-an-accountant>
If he gave the amount in shares, they have the shares and could sit on them. This may have problems with shareholders voting rights and such like. (Which is why you should always try to have 50% of a companies shares in the ideal world.)
If they wanted to sell them they need to find a buyer, and if one person bought many of the shares they may end up in a controlling position of the company.
This is one reason why, at US tax rates, it would be more efficient to split the bonus over 2 or more years. Also, that delayed vesting could help with retention.
Now if only more American bosses would take the money they earned with help from their employees and redistribute it to those employees, then maybe the economy (in America) wouldn't be as crazy as it is.
I don't see anything wrong with encouraging those with power and money to focus on benefiting those beneath them in the hierarchy, rather than solely themselves. You can dismiss it as "non quantifiable moralizing" while I'll just call it desirable ethics.
There are two kinds of jobs. Pay based on time, and pay based on transaction. Sales, mergers and acquisitions, medical malpractice lawyers, those kinds of jobs tend to be paid in proportion to the size of the transaction.
There are alot of people with computers on this planet. It's a testament to not only being a great game/experience out of the box, but also the constant updates and the lack of costly add-on content plaguing other games.
I think actions speak louder than words. Despite Notch getting a some flack among the community for being out-of-touch with Minecraft and some of it also going to his staff, I think this shows that Notch cares about his studio, his work, and staff more than anything else. And certainly unprecedented in among gaming studios and companies.
I have so much respect for Notch and Minecraft. It's the dream that pretty much everyone who wanted to build games has had--turning your game into a massive success both financially and artistically. All without the help of publishers or really the entire professional game industry. Amazing.
Notice how at the bottom of the article it says this move is very surprising 'in this day in age.' Is that just a cliche or was it that people really were more generous in these situations in years gone by?
I mean bankers are giving up their bonuses left right and centre these days ;)
An alternative reading: 'in this day and age' might refer to some future of extravagant wealth only surpassed by the generosity and grace with which the inhabitants thereof adorn themselves.
Assuming that the money is deserved by the employees, this is a very shrewd, selfish^ move on his part. Giving people their just deserts is in everyone's interest, and Notch's long-term reward will be a robust, growing business.
^I use the term to mean what it should mean - "what's good for Notch, long term" - and disavow any connotation about harming others. It's not truly selfish to hurt others.
A minor quibble, but I'd say that depends entirely on the action and the circumstances surrounding it. "Pure" selfishness is simply the maximizing of one's own gain without regard for others. It does not imply helping or hurting, although it allows for both.
To draw from a geeky example, Shane shooting Otis in the leg so the zombies would attack the latter, not the former, on the Walking Dead was selfish. So, too, would a Google donation to the EFF be selfish. One action hurts others, the other helps, but both help the actor.
It's partly a definition debate, but I think it's a mistake to try to label selfishness as everyone but selflessness.
If something is win-win, it's not selfish. Attempting to label mutually beneficial actions "selfish" is Ayn-Rand era propaganda. If an action is good for you, and bad for others, it's selfish. If an action is good for others and bad for you, it's selfless (though it might turn out to be a good thing for you - that's karma). If good for everyone (including you), or something that benefits you and doen't really effect anyone else, it's neither selfish nor selfless, it's just a smart move.
Ultimately, selfishness describes motivations, not actions. If you think Google's action was selfishly motivated (and they had no concern for the positive or negative externalities of their action) then it's fair to call their action selfish. But unless you're a mind reader, it's hard to make that call.
But aren't we told by nearly everyone that it's better, morally, to be selfless? You're saying that it's better not to be selfless, but to make "smart moves"?
From what I've read, it doesn't appear that you think that selflessness is a good thing. Is this correct?
I think it's good to be selfless if there's a big net gain in doing so. I wouldn't inconvenience myself to give a tiny benefit to someone else - the "karma" would have to be worth the cost.
So, to be good according to your standard, there must be a big net gain for the beneficiary, and that beneficiary must not be or include you, correct?
How do you decide what constitutes a benefit that's great enough? Where do you actually draw the line? Is it moral to go out to the movies, when that same money could change the life of an impoverished child (for a month or two) in some faraway land? Is it moral to selfishly pursue a college education (college benefits the student first and foremost), when the money spent on tuition could be spent on charity, and the student's time could be given to service?
Also, why do you think that doing something morally good (though we obviously disagree about what constitutes the good) is any different from doing something that's practical (a "smart move")? I hold that the purpose of morality is to enable a flourishing life in the here and now, as opposed to something that's "tacked on," only theoretical, or somehow optional.
Nope, good for me is also good, as long as it doesn't cause much harm.
Once you start talking opportunity cost, it gets a bit more complicated. But I implement my standard using reasonable heuristics, not some platonic maximization.
Just because I believe in some underlying standard doesn't mean I act on it. I could cook up some underlying standard that's easy to meet (do what's good for number 1, do what "feel'), but that's kind of silly.
Going one level below the discussion about the correct definition of selfishness vs. selflessness (the answer here might help us understand what the definition should be):
What do you use as the standard for what "good" is? I.e., if you were to say that "healthy food is good," the question I'm asking is, "good for what?" Put another way, when you evaluate something as good or bad (or neutral) in a specific context, by what means do you decide which of these categories to place the thing in?
"Pure" selfishness is simply the maximizing of one's own gain without regard for others.
But each of us lives in a world surrounded by other people, many of whom are valuable to us. How could I be selfish (that is, gain the most, ultimately) without regarding the effects of my actions on the people and things that I care about most? I wouldn't want to live at all without my wife, for example.
How could it be purely selfish to live alone, without anyone to interact with? That sounds like misery, so I don't think that can possibly be what "purely selfish" should mean.
A little old now, so you might miss this. Anyway, here's my take: There's a difference between rational selfishness, which entails considering all the options and choosing the one that most benefits you (as you describe), and rash selfishness, which is simply acting for one's own immediate gain without thought for others. Both share the same motivation, that is, maximizing one's own gain.
Whereas the rash selfish person does this without regard for other people at all, the rationally selfish person does this with regard only for himself, but knowing that other people are key to his own gains and seeking to maximize same through others. Thus someone who wanted to be loved could well be rationally selfish in seeking out a mate and forging a good relationship with them.
When people get what they deserve (be it good or bad), that's justice. When justice is served, it's good for all parties involved.^
If the employees did not deserve the money (i.e., they really did not have a hand in earning it, and deserve only their previously contracted salary), and Notch gave this windfall to them anyway, that is both unjust and unselfish on Notch's part. In that case, Notch simply loses. His life, which is short - as every life is - is now made all that much shorter, less happy; even though his choices, apart from the unjust giving, warrant better and more.
Of course, simply receiving such a windfall itself isn't necessarily immoral. That depends on exactly how wisely the recipient uses the money, and how successful he is in doing so. In some instances, a recipient isn't good enough to handle such a windfall, and literally blows it on things that harm him. In other instances, he is good enough, and benefits. There are stories about lottery winners that go both ways to illustrate my point.
^At first glance you might not think this is true, but it is. It's easy enough to see that justice is good for the good, but what about bad people? Justice is good for all - even criminals evading it. Bernie Madoff stated in an interview that getting caught and prosecuted was a relief:
"For Madoff, prison offers a measure of relief. A man — and even a monster — who has put his greatest fear in the past is, in some way, a happier man, no matter what else has occurred."
I might be being naive since he seems to be rather bravado about splitting the money with everyone, but I like to think Notch is doing the absolute best thing for Mojang and probably for himself in the end. I personally would love to work at a company like Mojang for a boss like Notch who disperses the hard work of the company with the company.
It seems to me that executives like Gates, Page, Brin, or Jobs who take $1 salaries (discounting their travel subsidies and Jobs's Gulfstream) are better for their companies in a number of ways than someone taking a lavish salary. I'm not saying the latter is wrong, but it seems like the "selfless" executive at the very least demonstrates the need for the company to do well--a real connection between vision, company, and leadership.
I hope good things come for both Notch and Mojang as a result of his sharing the wealth, their focus on satisfying their customers, and their general attitudes of honesty and openness.
I applaud these guys.
It's more about the money per se - it's about having a share of company profits. This, I find, is what a lot of companies get wrong. We go by the same old mentality that an "employee" should simply be compensated with a fixed amount. But why? People who work on the product should have a significant share of the profits as well. Allegedly a regular employee is "taking less risk" by having a fixed salary as opposed to the "risk takers" at the top - but in this day and age where there is no more guaranteed long-term job stability, that is not true anymore. And the continuing success of the company's products depends directly on the good work of its employees.
It'd be more awesome and effective (in terms of morale and team) to pay those in shares. Nothing boost productivity and care like owning a bit of a company. Even if it's just a tiny bit.
Speak for yourself. Other things being equal, I'd much rather get cash than shares in the company I work for. If the company goes bust, then I'm out of a job and my shares are worth nothing. If I want to invest in equity, then I will buy stocks in other companies and have a more diversified portfolio.
Of course, the situation would be different if I were a co-founder or a key employee with significant influence on the company's direction.
The company is question is Mojang and being a gamer myself, I know they have a very dedicated following and very open compared to other traditional companies. Short of a massive screw up, I'd doubt they'd go 'bust' easily.
If you had shares in the company, wouldn't you care more and push even harder? That's the point I'm getting across.
In my experience, the best game developers are primarily motivated by their desire to create awesome games and their motivation level is already maxed out. Some see shares and other bonuses more as a sign of distrust than as a motivator, as if their dedication to awesomositude is being questioned.
Besides, awesomest isn't necessarily most profitable, so if you encourage your team to optimise for profit, there's a pretty big risk that the awesomeosity output rate will drop. With time you might even end up with a team churning out click-grinding Skinner boxes, which is not very awesome at all.
With company of less than a few dozens employees everyone is a key employee and what he does affects the company. Thus I think shares really boost working morale and interest in company's success. Money does too. But I think that higher stable income more than a one-time big fat bonus.
In Argentina you could buy a house near the capital for about half of that, and the rest would pay frugal-ish expenses for several years. Not enough to retire on, but plenty of runway for the next project.
that depends completely on where do you live. here in eastern europe it'd be _almost_ enough if you had nothing to start with and was smart about handling it.
in the us, that's 3 years of entry-level salary in software development...
It's his money, he can do whatever he wants with it. It's not humble and awe-inspiring. He announced it to the world on twitter. I mean, it's nice of him, or whatever, but.. I don't care? Why should anyone care about this?
I could write a long tyrade about how this could be useful if more companies did this, because yes, the employees would have an invested interest in this company; and la la la; but really, this is just Notch tooting his own horn about giving his money away. Congratulations.
Yes, what you've done with Minecraft is absolutely amazing, and I love the game, but... very nice of you. Moving on.
awaits the downvotes
[edit: in seriousness, could someone tell me why the public, even the programming public, should care that Notch gave away his dividends? We're not told why he did it. He's not encouraging others to follow his example, he just did it and told everyone.]
it is INTERESTING it is different it sparks debate and it gives life to a conversation about bonuses and compensation in our industry. Lots of people here are also founders (or plan to be) so form that perspective it is interesting to contemplate the effects of such a move on early employees, it isn't so different from talking about vesting for early employees in that regard, something which is also a common topic here. I'm not sure why you would choose to make this a personal thing about notch, HN (for me at least when it is at its "best") is a place to come for NEW and INTERESTING perspectives, this absolutely falls into that category - for a number of reasons.
Your response seems to be "wow look at notch trying to draw attention to himself" the impression I have from the rest of the comments here isn't "wow look how generous notch is; he's so awesome" it seems to be more like "wow this is cool/different/unexpected I wonder how this will play out".
And that makes the HN comments interesting, which I will agree with. It's the initial creation of the article I'm questioning, is all.
I am absolutely not questioning that the resultant dialog isn't interesting; as I have read it, and that is interesting. I'm questioning the original article, which does not look like this dialog was the intended result.
[edit: addendum]
I also have nothing against Notch. If this were about where Page's, or Zuckerberg's, or any of the All Stars of our time's money was going, I imagine I'd have a similar response
So you're not actually questioning the act of giving away the money either? Your point of contention is "Why is he posting this?" ?
That's actually quite an interesting line of inquiry. I'd suggest it probably helps raise his company's profile, it helps draw potential employees to his company, and, admittedly, it also probably makes him feel good about himself - and it should - he's doing a Good Thing (TM) he should be able to highlight that. It cost him $3MM why shouldn't it buy him some goodwill?
Flaunting charity seems to negate the effects of the charitable giving some. Perhaps that's a pet-peeve of mine; however, it has effectively:
* raised his company profile;
* draw potential employees to his company, though I fear that might be for the wrong reasons: "bonuses here are ~amazing~" as opposed to "I love the work I do here" (money vs love-of-the-art)
Also, did he do a good thing? I know this sounds silly; but, why couldn't he have just had it in the employee contract that all employees will be getting X% of the dividends, based on some criteria; or, just given everyone stock so they could reep the rewards of dividends directly. The latter seems less effective in the spirit of the giving than the former.
I mean more "why should anyone care?" It's really not that unusual, and honestly tastes more like gossip, to me :/
I'm not saying that it shouldn't be on HackerNews. If someone posted it and it's receiving upvotes, clearly it's worth being on HN. I just don't understand why it matters at all
I'll admit to just enjoying the gossip from fellow techies and entrepreneurs. Note that it was used as another excuse to discuss tax rates, lifestyle choices, and healthcare in the comments - things we are all interested in in the choice of where to live and where to work.
I'm not saying he shouldn't've done it. I am, however, extremely curious. This is the sort of thing that I have wondered why more companies don't do.