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.”