Activision-Blizzard’s Bobby Kotick made headlines back in March when on the same day the company was going through its (at least) fourth round of layoffs in the last few years, an investor group alleged that Kotick could pick up as much as $200M in bonus payouts, a direct result of the Shareholder Value Creation Incentive clause in his contract that investors have been complaining about. At the time, it seemed beyond ghoulish, and apparently, Activision doesn’t mean to let the press relations fallout happen again. According to SEC filings this morning conveniently deposited in our inbox, the company is moving to extend Kotick’s tenure – but also reduce his base salary and target annual bonus by 50%.
“The CEO voluntarily agreed to reduce his base salary by 15% in 2020. Under the Extension Amendment, effective January 1, 2021, the Compensation Committee and CEO agreed to reduce his contractually agreed-upon base salary by 50%, to align with targets established at the bottom 25th percentile of the Company’s peer group, despite the Company’s strong relative performance. The Extension Amendment does not provide for any guaranteed annual base salary increases. The Compensation Committee and CEO also agreed to reduce his target annual bonus by 50% (i.e., a potential reduction of $1,750,000 for each of fiscal years 2021 and 2022), to align with the anticipated bottom quartile of the Company’s peer group. The Extension Amendment provides that the CEO shall be eligible to earn an annual bonus for each of fiscal years 2021 and 2022 of up to a maximum of two hundred percent (200%) of his reduced base salary specified above (the ‘Annual Bonus’).”
This should effectively knock Kotick out of the top-paid CEOs in the country going forward. But don’t worry; Kotick has made between $30M-$40M annually the last few years, not counting whatever portion of the alleged $200M he’ll be pocketing, and half of that is still more money than any human could ever legitimately need. And hey, if he runs out, he can always participate in another dodgy stock sale scheme. He’ll be just fine. Wish we could say that for all the people he laid off!
MOP readers will recall that investors have been agitating against Acti-Blizz’s corporate pay practices for a while now; 43% of investors actually voted against its most problematic policy last summer, which the shareholder group categorized as a “clear vote of no confidence in the current pay practices at Activision.”