Bobby Kotick Secures $155M Pay Package

Activision Blizzard shareholders have narrowly voted to approve CEO Bobby Kotick's $155 million pay packet, with 54% in favor of the approval. The approval comes after a year-long campaign by CtW Investor Group to cut down on Kotick's pay.

The vote had been delayed by Activision Blizzard in what some saw as an attempt to avoid it's being rejected. For its part, Activision Blizzard says the delay helped shareholders to become better informed.

"The additional time shareholders requested allowed them to thoroughly review the facts about Activision Blizzard's rigorous pay-for-performance compensation practices as well as changes the Board made to our executive compensation based on extensive feedback from shareholders," Activision Blizzard said in a statement.

The 54% shareholder approval is down from 56.8% from last year, which was in turn down from 58% approval of 2019. CtW Investment Group says approval is at the lowest it's ever been, and it's been critical of Kotick's high salary for some time.

"Activision Blizzard employees face job insecurity following layoffs of 800 employees in 2019, and typically earn less than one third of one percent of the CEO's earnings, with some employees, such as junior developers, making less than $40,000 a year while living in high-cost areas such as southern California," CtW said in a filing to the US Securities and Exchange Commission before the original vote date June 11.

Because the vote was advisory, Kotick could still have collected his $155 million at the cost of positive relations with the shareholders. Although the company cut Kotick's 2021 salary by 50% to $875,000 and reduced his target annual bonus by 50%, he can still make up to 200% of his base salary on top of that $875,000.

Analysis

Activision Blizzard defends Kotick's high pay by citing the company's ever-rising stock price.

“Mr. Kotick, the longest tenured CEO of a public technology company, has transformed Activision Blizzard, achieved record results, doubled the value of the company, and delivered more than $45 billion in additional shareholder value since his employment agreement took effect in October 2016," a spokesperson told Kotaku.

But Kotick has also presided over the company as it's significantly underpaid developers and laid off hundreds of workers. The company did all of this before slashing Kotick's salary — temporarily — and will continue to do it afterward. It's clear the priority for Kotick is his own compensation, even as his employees remain underpaid until they're laid off.

Michael Varner, director of executive compensation research at CtW, told Kotaku that the 54% approval vote is unusually low for such votes.

"Such marginal support for Say on Pay votes is extremely rare: fewer than 4% or companies in the broader Russell 3000 index receive support around 50%, with average support int he S&P 500 at 88.6%," Varner says.

If that approval number continues its downward trend, Activision Blizzard may finally see a shake-up at the executive level, but if Kotick continues to drive the stock price up he'll likely stay king regardless of how his company treats its employees.