
Notch gives his $3,000,000 Minecraft dividend to his employees - citricsquid
http://www.minecraftforum.net/news/422-notch-gives-3-million-to-mojang-employees/
======
lincolnq
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.

~~~
jlarocco
When people are applying for a job you can be 99% sure they're motivated by
the money.

I love developing software, and I even spend some of my free time doing it.
But if I didn't need the money, I'd spend most of my days skiing.

~~~
larsberg
Totally untrue.

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.

~~~
sosuke
They were just trading money for something else they valued greatly.

~~~
jordan0day
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.

~~~
kamaal
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.

~~~
vidarh
Time and time again, surveys show that once basic needs are met, people get no
happier as they make more money.

Reality just does not support the idea that most people are better off with a
lot more money.

~~~
kamaal
Even if that is the case its far more comfortable to be sad inside a Ferrari
than a Bus.

~~~
easp
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...

------
Chrono
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.

~~~
driverdan
56% income tax? That. is. insane.

~~~
ontIgnoreRealit
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.

[http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...](http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213)

~~~
Chrono
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.

~~~
toadi
Why no tax on making money from money. These high tax rates are on money not
an people with a lot of money making money...

------
GoodIntentions
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.

~~~
iacvlvs
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.

~~~
redthrowaway
Before or after they went public? If before, that strikes me as the kind of
thing the SEC would frown upon.

------
staunch
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.

~~~
citricsquid
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.

~~~
GuiA
He didn't retire. He handed the lead of the Minecraft project to Jens, but he
is still very much working at Mojang.

~~~
citricsquid
Retired from Minecraft and any revenue producing projects for Mojang, as far
as I know.

~~~
zacharycohn
I thought he transitioned to working entirely on Scrolls.

~~~
reidmain
Nope entirely new unannounced game. Scrolls is being worked on by other Mojang
employees other than Notch and Jens.

------
therealarmen
For the lazy, that works out to $120,000 per employee if split equally. Anyone
know what kind of taxes this is subject to?

~~~
citricsquid
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.

~~~
AndyJPartridge
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.)

~~~
petercooper
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.)

~~~
Chrono
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!

~~~
petercooper
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.

~~~
m_eiman
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.

------
jeremyarussell
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.

~~~
odiroot
Isn't this something like investments bank do?

Not even trying to troll, just asking.

~~~
jarek
Yes, that's one of the bigger draws - that your opportunities and compensation
are _fairly_ closely correlated with your achievements.

There's still wonkery like facetime and being one of the guys, but compared to
many other areas it's pretty good.

How the money is earned is a separate issue.

------
bond
Amazing how the sales keep going on... Last 24H 8845sales=176500€...
<http://www.minecraft.net/stats>

~~~
muhfuhkuh
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.

~~~
Strom
I think an important point is also that Minecraft can run on very low spec
hardware, no need for fancy GPUs.

------
keithvan
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.

------
tdicola
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.

------
Tycho
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 ;)

~~~
Willwhatley
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.

------
maxharris
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.

~~~
redthrowaway
>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.

~~~
wisty
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.

~~~
maxharris
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?

~~~
wisty
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.

~~~
maxharris
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.

~~~
wisty
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.

~~~
maxharris
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?

------
bicknergseng
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.

------
vic_nyc
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.

------
justjimmy
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.

Now _that_ would be interesting to see.

~~~
nandemo
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.

~~~
justjimmy
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.

~~~
rufus_t
Push harder for what, exactly?

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.

------
DarkMeld
Stay humble my friend.

------
malkia
Top-Notch!

------
feralchimp
Giving $3M to employees is cool. But maybe next time, let _them_ tweet it.

------
lyime
Huge respect. I hope this will encourage more founders to follow.

------
jebblue
That guy just totally rocks. I wish I could work with him.

------
tonfa
Who are the other shareholders of Mojang?

~~~
citricsquid
As far as I know it is Carl Manneh (serving as CEO) Jahkob Porser (developing
Scrolls) + Notch.

Source: [http://www.forbes.com/sites/alexknapp/2011/09/16/mojang-
foun...](http://www.forbes.com/sites/alexknapp/2011/09/16/mojang-founders-
notch-and-jakob-on-minecraft-scrolls-and-the-business-of-indie-games/)
(paragraph #3)

------
zotz
That's leadership. He just solidified a good team into a better one.

~~~
yoklov
You can't really be sure about that, after all, his employees could promptly
retire now that they're rich. (Though, this seems very unlikely)

~~~
eurleif
$125,000 is a decent bit of cash, but it's not enough to retire on, especially
after taxes.

~~~
kragen
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.

------
erikb
He already got millions of $$ in his pocket. From his point of view $3M is not
that much, I think. Nice move, but nothing impressive.

------
sukuriant
Forgive me, but... why should we care?

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.]

~~~
antoko
Fine I'll bite,

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".

~~~
sukuriant
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

~~~
antoko
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?

~~~
sukuriant
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.

