Activision CEO Wins Executive Compensation Plan Despite Backlash
Activision approves the executive compensation plan for CEO Bobby Kotick, despite intense opposition and controversy surrounding recent layoffs.
Earlier this week, Activision Blizzard confirmed that the company won shareholder approval for a revised executive compensation plan. Activision Blizzard is the largest gaming company throughout North America and Europe, drawing a staggering $8.09 billion during the 2020 fiscal year. Activision Blizzard is responsible for publishing the Call of Duty franchise, Crash Bandicoot, Spyro, Diablo franchise, World of Warcraft, and The Game Awards 2019 Game of the Year winner Sekiro: Shadows Die Twice.
Activision Blizzard holds yearly votes concerning the Say-on-Pay proposal among its shareholders, yet in recent years the company has encountered backlash regarding its executive compensation plan. Say-on-Pay investor votes allow shareholders to vote on the compensation of top executives at a company per Security and Exchange Commission guidelines. Typically, the Chief Executive officer, Chief Financial Officer, and at least three other highly compensated executive salaries are decided in this manner.
According to GamesIndustry.biz, Activision Blizzard was able to win shareholder approval for a revised executive compensation plan, with a low number of 54% of investors agreeing to the compensation package. “We are pleased that, based on exceptional shareholder returns and responsiveness, Activision Blizzard shareholders again approved our Say-on-Pay proposal and reelected our Board directors with an average of 96% of votes,” a representative of the company said to GamesIndustry.Biz during a conversation. Despite the success and expansion of current Activision Blizzard franchises, not all parties involved are happy with the compensation package.
CtW Investment Group, an organization that advises several union pension funds in the United States and fights to hold companies accountable for unethical behavior quickly rebuked the agreement. CtW director of executive compensation Michael Varner gave the following comment to GamesIndustry.biz following the Activision Blizzard announcement. “Most importantly, keep in mind that Say on Pay votes in the 50% range are extremely rare: less than 4% of companies in the broader Russell 3000 index receive support that low and the average support for the Say on Pay proposal in the S&P 500 is 88.6%.” A reason for shareholders remaining skeptical of the deal revolves around the salary of Activision Blizzard CEO Bobby Kotick, who was originally set to earn over a $200 million payout via the executive compensation plan before revisions.
Recent pressure led Bobby Kotick and Activision Blizzard to reduce the CEO’s salary in half, but he retains the opportunity for a 200% bonus per stipulation in the contract. His salary would not be a point of contention if Activision Blizzard was not notorious for laying off several hundred employees during a time when the company was bringing in substantial profits. This move, considered questionable at best by the gaming community, has certainly cast the executives of Activision in an unfavorable light, and this recent victory, while healthy for their wallets, probably won’t win them any new fans.
Source: GamesIndustry.biz
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