Atari's fiscal 2008 annual report shows just how dire the publisher's situation has become over the years. Beginning late in 2005, the company began a gradual and aggressive scale-back of its development activities, and by the end of 2007, it had sold away all of its development studios. The company now reveals that it's remained in debt just to sustain its operational costs.
Infogrames SA has long been a majority shareholder in Atari, and announced it would officially acquire the company (and loan it $20 million) in April 2008. One of Infogrames' founders, Bruno Bonnell, was Atari's chairman and CEO until April 2007, presiding over the company's decline.
On April 4, 2007, Bonnell was asked by Infogrames to resign, and the company agreed to pay him to step down. "Golden parachute" scenarios for corporate executives asked to resign during difficult times are not unusual. Yesterday, we reported that Activision chairman and CEO Bobby Kotick earned a $3,079,798 bonus for leading the company through a banner year. So how much did Bonnell receive in departure cash?
Infogrames SA paid Bonnell 3.0 million euros as part of his resignation agreement - that's 4.73 million dollars. In other words, Bonnell earned nearly $2 million more on Atari's poor performance (arguably attributable to his leadership) than Kotick earned in thank-you bonus for his leadership in Activision's record year.
Adding insult to injury, Atari's annual report discloses that Infogrames went over its head to form the agreement with Bonnell:
Neither our Board of Directors nor any member of our management was consulted about the agreement between IESA and Mr. Bonnell and our management was not provided with a copy of the agreement until more than two months after it was signed.
Atari details in its annual report the way that its current activities now largely center on North American publishing and distribution for games developed by Infogrames, though it still holds a library of titles licensed from Infogrames as well, including Dragon Ball Z (FUNimation), Alone in the Dark (IESA),Asteroids, PONG, Missile Command and Centipede (Atari Interactive), Dungeons and Dragons (Hasbro and Atari Interactive), Earthworm Jim (Interplay), RollerCoaster Tycoon (Chris Sawyer and Atari Interactive), and Godzilla (Sony Pictures).