Activision-Blizzard extends contentious shareholder vote on executive pay

Investor group calls the whole thing a 'charade'

    
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Now my stats are good!

MMO readers will recall that earlier this year, the industry erupted over a public relations fiasco Activision-Blizzard failed to adequately counter: In the midst of yet another round of layoffs for the company, CEO Bobby Kotick, already one of the highest-paid CEOs in the country, was poised to take advantage of a dodgy clause in his contract that could see him rake in as much as $200M more in payouts.

The backlash led to Activision’s board announcing that it would be halving Kotick’s base salary and annual bonus in the future, but not before the original reporting curiously vanished from the internet and a whole wave of new and identical counternarrative articles claiming the $200M number was bogus started cropping up in searches. (We reported on that whole weird situation at the end of the original article; it seemed to us that Activision was very invested in discrediting the $200M figure without actually going on the record to deny it. Bloomberg currently puts Kotick’s estimated 2021 bonus haul at closer to $155M.)

In any case, the movement forward this week is that Activision-Blizzard’s annual shareholders meeting was yesterday, and apparently while the company was able to vote on most agenda items, the board has extended the voting on executive pay by an extra week, contending that shareholders needed more time. Since the news was announced in an Activision-Blizzard press release, of course, the company recommends that shareholders approve the board’s proposal and reiterates its position that it’s already done enough to curtail executive pay excesses. “The Company’s Compensation Committee, after discussions with our CEO, took a significant step to reduce the originally-anticipated value of his 2021 performance-based equity award – reducing the value of its maximum payout opportunity by approximately 40%,” AB says.

But AB also uses the press release to disparage industry reporting on its C-suite compensation as “misleading” and implies that shareholders have traditionally supported the company’s executive pay, pointing to large majority votes in 2018 and 2019 but neglecting to mention 2020 when that was not the case. The shade appears to be directed at CtW Investment Group, which without a doubt has been the investor group at the forefront of agitation against corporate pay abuses in the last few years. The group, which purports to represent long-term Activision-Blizzard investors, declared a spiritual victory last year in its efforts to curb executive pay abuses when it convinced over 43% of AB shareholders to vote against AB’s “say-on-pay” policy. (It also successfully convinced a large majority of EA shareholders of the same.)

The group was back with a press release of its own last night, arguing that 86% of the votes were already in and that AB is merely trying to sway the vote. “Activision Blizzard board’s action today is desperate attempt to avoid losing the shareholder vote on executives’ pay,” CtW claims. “The Activision board should call an end to this charade.”

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Grimalkin
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Grimalkin

Dodgy company is using dodgy practices to justify dodgy behaviour? So, what else is new?

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Peregrine Falcon

Remember when they kept telling us that they needed to have lootboxes and micro-transactions (that were in no way micro) in order to even keep developing games?

Ok, have we finally realized that the real reason was just to pad the executives’ pockets? Do you realize now that when you spend a ton of money on these lootboxes, and microtransactions, that you’re just supporting the executives’ bonuses? You’re not supporting the games. Your money will not go to the developers. It just goes to lining the executives’ pockets.

So please stop listening to the devs who whine that people who don’t buy at full price are keeping a game from getting a sequel. Please stop listening to Extra Credits and their purchased opinions on why game companies are being nice by not raising the prices of their games to $100. Please stop pre-ordering games. Companies keep taking your money and then crap on you with a crap game. If you really don’t like that companies keep lying to you and launching broken games then stop rewarding those actions with your money.

Stefan
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Stefan

Lootboxes are luckily banned in Belgium, however i disagree with the notion that microtransactions are bad. They are a tool and depending on the structure of the game, how things are monetized in other words. Still a fan of a subscription model that gives you ingame currency to spend if there is a store.

Blizzard however has always overcharged both their cosmetic and services, which is also why they keep their revenue high despite losing players, a realm plus faction change cost upwards of 55 euros if i am not mistaken that is the price of a game.

I am not against CEOs getting bonuses but it sits wrong with me when the company is ill and firing people that are key to creating good products, speaking of how the Quality Assurance and testing department got gutted what shows in the increase in bugs across the board. I will agree that income inequality is another big issue a CEO is not worth 30 times that of a developer but thats a different debate and i have some rather colorful opinions about why MBAs are generally worthless for optimizing a company.

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Kickstarter Donor
NeoWolf

Oh it was ONLY $155 million not $200 million, that makes all the difference then sorry Activision-Blizzard ….. ugh, my head lol

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McGuffn

I regret to inform you that Bobby and the Activision board of directors have deemed that your apology was neither sincere nor sufficient. Please perform 100 self flagellations with the implement of your choice.

Stefan
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Stefan

The problem investors undoubtedly have is that the company faced quite a few lay offs, while their products do well there seems to be a complete lack of future vision, no new IPs at most you have more of the same even CoD is not getting the greatest reception any more.

Why should that much money go to the bonus of the CEO when there is no long term vision, something the CEO is there for in the first place.

They follow existing trends and are finally after a long time going into the mobile market and even there they are outsourcing it aren’t they?

Add in other factors that the core group of creative design has been leaving the company, and factor in that gamers and blizzard fans also invested in blizzard and you have lot of reasons to be discontent even if this year earnings are up by milking their core base they clearly no longer give a damn about.

And that is completely disconnected from the fact that CEOs do earn too much.

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Bruno Brito

I think you have a point but i also think Kotick was never there for the long run. It’s pretty clear he has no long-term interest in Activision and he only stays because the board is favorable to him. I’m on the realm of him “retiring” in two or three years after basically all the looting that Blizzard is suffering is done and it’s funneled into the executives’ paychecks.

I think he knows this. We expect him to be a real CEO but i can’t see anyone on that board expecting him to be. They seem to only want to loot everything and pocket it then leave on their silky golden parachutes. I hope to be wrong.

Stefan
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Stefan

Impossible to say but if you take a look you will often see that CEOs do indeed merely rotate around.

I do not believe he is plundering the company but there is a strong disconnect between those who believe people need to be managed (i do not believe in strong and strict management structures as i do not look at people like animals) and those who create something, people that actually produce a product.

This is sadly not only present in Blizzard but also elsewhere as they are conflicting ideologies, especially when it comes to gaming because you do not go into gaming to make the big bucks there are better avenues for that, you go in there because it is a passion and when that passion is not present on a management level it shows and you got games that are a messy combination of systems and content that people did not really ask for or want.

I believe the leprechaun (kotick) is probably there to stay for a little while longer and is focused on maximizing profits, which he is successful in however with investors turning against him this might change although i have no idea how large that group is.

Another sour grape for people to eat up is that Blizzard is now just part of the group called Activision Blizzard, so long the group does well everything is alright. I do believe there is a vision there but the vision is to merely copy the working strategy of COD which is to milk fans of the genre and dump as much content in Expansions and dry the content up between the rest because there is no real money to be made there, and from an economic point of view they are correct they get more players back again with an expansion than with a content patch, so why invest that much when people are going to drop out anyway or just get some content in the final patch to lure people back in for the next big expansion drop.

How long that strategy will work in a genre that is no longer at their peak, now that is something else.

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Bruno Brito

I do not believe he is plundering the company but there is a strong disconnect between those who believe people need to be managed (i do not believe in strong and strict management structures as i do not look at people like animals) and those who create something, people that actually produce a product.

I don’t know if i agree with that. Kotick’s main MO for the past two years was to lay off people while to turn profits, which is unsustainable and anyone who plays WoW can tell you that the game lacks QoL control as bugs become more prevalent, and as bots and cheaters appear, there are less GMs with the same workload. It’s all the signs of a company under the loot phase. Kotick isn’t being strict with his workers, it’s exactly the opposite: Blizzard needs to be strict because they have less workers with the same ammount of work to be done, so crunching and infernal conditions of labor become reality for them.

Activision isn’t profiting despite Kotick, it’s profiting BECAUSE Kotick is pulling scheme after scheme to line their pockets. Laying off 800 employees would bit him in the ass down the road, and this is why he keeps repeating the “we’ll hire 2k people as time goes by” mantra while he prepares to step down. Why would he want to stay if he can simply retire and leave the problem to someone else?

Stefan
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Stefan

I mean he can loot the company even without really doing that they are are a rather cash strong company.

One thing is for certain he has made statements before he does not really care about games or gamers, so just putting products on the shelves to sell and not caring about the aftermath or real quality could be simply that.

Even before Kotick was present Blizzard had been struggling with producing something new, in my opinion they set the wrong focus for some of their games and gave up too soon on their Moba.

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Robert Mann

Summary:

“Some people are upset, but the people who make even more money for doing even less say that there’s nothing to be upset over. In a direct statement, they said ‘It really is not any skin off our backs, we will be fine’. Asked about workers, wages, and other things that caused the issue with public ire, they blinked as if they could not understand the question before they noted once again that they have reduced the pay of their yes-person, and will generously keep a larger share of the pie as a result…”

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Utakata

…decisions made in privilege are often made at the exclusion of everyone else involved. And benefits those who really don’t need any more benefiting, to put it mildly. /sigh

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Bruno Brito

“Misery is the only thing that trickles-down.”

EmberStar
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EmberStar

Actually there’s several things that trickle down from on high… but I suspect that the chat filter wouldn’t like it if I listed them. But do be sure to wash your hands if you notice any of them.

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Bruno Brito

That’s misery in solid form.

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Utakata

Either way, I am glad we are all concluding the same thing.