Activision-Blizzard shareholders say nay votes constitute ‘rebuke’ of company pay practices

    
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Activision-Blizzard shareholders say nay votes constitute ‘rebuke’ of company pay practices

Earlier this month, we covered moves by Activision-Blizzard shareholders and long-term investor watchdogs to agitate voting against the company’s “Say-on-Pay” policy. Critics argued that CEO Bobby Kotick is grossly overpaid, on the order of $100M in options and equity over the last few years, “consistently larger than the total pay… of CEO peers at similar companies,” while most employees take home less than a third of a percent of his regular earnings. Consequently, shareholders were being asked to vote down the current iteration of Say-on-Pay.

Well, the vote has now taken place, and according to the latest press release, only 43.2% of shareholders actually voted against the measure this year. ActiBlizz’s corporate by-laws (section 2.7) require only a majority, rather than a supermajority, of shareholders to affirm votes.

Nevertheless, the investor group spearheading the movement declared a spiritual victory, noting that this is a very large number of nay votes (and it is) and that the company will likely need to address the clear and growing unhappiness within its ranks anyway. But knowing Activision-Blizzard, we won’t be holding our breaths.

“At its recent annual meeting, a whopping 43.2 percent of Activision Blizzard (NASDAQ: ATVI) shareholders voted against the company’s “Say-on-Pay” policy, the highest level of opposition the video-gaming giant has received in its history of having votes on CEO pay on its ballot, a clear rebuke of the company’s pay practices. The CtW Investment Group called for a vote against the management’s say-on-pay proposal leading up to the annual meeting this year.

“’This is a clear vote of no confidence in the current pay practices at Activision Blizzard. We expect the board to step up and announce meaningful reductions in CEO pay. They need to address the elephant in the room – the size of CEO Robert Kotick’s equity awards, which for the past several years have been greater than the total pay of CEO peers at similar companies,’ said Dieter Waizenegger, the Executive Director of the CtW Investment Group.

“Especially in the wake of 2019 lay-offs, continued low levels of pay for many employees, and potential disruption stemming from the COVID-19 pandemic, the board should take this opportunity to rebalance its human capital management strategy away from outsize CEO pay and toward an equitable, long-term approach that rewards all stakeholders.”

Source: Press release

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kjempff

Modern top CEO leading is about making short term profit increases, by cannibalizing their companies. The better they are at this, the bigger the bonus. After a few years and before the negative effects of their “leadership” hits for real, they leave for another place to do the same.

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Bruno Brito

Yes, expect Kotick to “retire” next year.

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Eamil

I agree that’s a real problem, but it’s hardly the case here. Kotick has been with Activision for decades.

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Dobablo

Wow. That is a very large number voting against a board recommended position.

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Katriana

“Human capital management strategy”

Language like this is so abhorrent. Clear indication that management has ceased viewing employees as people and sees them only as assets or resources in much the same way as the computers and photocopiers are. And yes, I know this is standard terminology these days and isn’t particular to Blizzard/Activision. That just makes it even more abhorrent IMO. Anyone else remember when it used to be the Personnel dept and not Human Resources? At least then there was some shred of acknowledgement that they were dealing with people and not just with “resources.”

*Getting off the soapbox now before I start ranting too much and in an uncivilized fashion.*

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Dug From The Earth

if anyone ever doubted that corporations only see people as numbers, here is yet another perfect example of it.

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Harlow Games

“Human Capital” is the formal, academic term that separates workers from other forms of capital – it is literally to recognize that not all labor is equal, and that employees all bring different levels of economic value to the corporation that aren’t always accounted for (education, experience, abilities, creativity, etc.) – and if they’re not being accounted for, they’re likely not being compensated properly.

I understand how, if you’ve never heard it before, it sounds dehumanizing, but it’s not that different from “human resource management”. Human capital is a long-established term in business and economics, dating back to Adam Smith, and popularized by Gary Becker (Nobel laureate) that worked to include human capital as a key factor in economic growth. The term literally recognizes labor, and everything workers bring to the table, when previously those intangible assets/qualities were not properly acknowledged or accounted for, despite being absolutely necessary for economic growth.

“Human capital is the stock of habits, knowledge, social and personality attributes embodied in the ability to perform labor so as to produce economic value. Human capital is unique and differs from any other capital.”

Human capital is important because it is perceived to increase productivity and thus profitability. So the more a company invests in its employees (i.e., in their education and training), the more productive and profitable it could be.

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Bruno Brito

Human capital is important because it is perceived to increase productivity and thus profitability.

If you don’t think this is dehumanizing, no matter the historical context, i don’t know what to tell you.

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Anthony Clark

Things would get better if they would just get rid of Bobby Kotick.

He’s their cancer.

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Dug From The Earth

At this point, corporations are basically Hydra

“If they cut off one head, two more shall take it’s place… Hail Hydra!”

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Anthony Clark

We need a credit union like game company/publisher then.

It was better than a bank, might be better here too.

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Harlow Games

No, love. They’d hire another CEO who would have to top Bobby’s achievements in order to justify their compensation and to “make their mark” — rarely do you get a CEO that is content with maintaining the status quo, especially when measured against their predecessor(s).

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Anthony Clark

We need a credit union like game company/publisher then.

It was better than a bank, might be better here too.

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Bruno Brito

that the company will likely need to address the clear and growing unhappiness within its ranks anyway.

Oh boy, second round of layoffs, here we go.

By the way, i want to remember everyone that Acti-Blizzard doesn’t pay taxes. Which means every year, the american population pays them for just existing.

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Roger Edwards

“Put another baby on the rotisserie, it’s payday”

Bobby Kotick

Sixuality
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Sixuality

the investor group spearheading the movement declared a spiritual victory

…which differs from an actual victory only in that it’s a defeat.

flatline4400
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flatline4400