An investment group has attacked the bonus package as “not justified” by the video game giant’s share performance.
Activision Blizzard CEO Bobby Kotick has come under fire from investors as he stands to earn a bonus payment said to be worth nearly $200 million.
The CtW Investment Group has issued a statement criticising the “Shareholder Value Creation Incentive” due to be issued to Kotick as a bonus payment.
Kotick’s employment contract contains a provision entitling the CEO to “additional rewards and payments” should Activision Blizzard’s annual growth rate reach certain metrics prior to 31 December 2021. A surge in the company’s share price met these conditions on 1 March, an SEC filing revealed earlier this month.
"While the increase in Activision’s stock price is somewhat commendable, as we stated last year and continue to assert, this achievement alone does not justify such a substantial pay outcome for the CEO," said CtW’s Director of Executive Compensation Research Michael Varner.
One of the factors in the company’s recent record performance, the investment group pointed out, is the COVID-19 pandemic. The video game industry grew to almost $180 billion in 2020, greater than the US sports and global film industry combined, as lockdown measures forced a shift in entertainment consumption.
Shares in Activision Blizzard now sit at $91, having reached over $100 in February – up from $56 in early 2020.
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This is not the first time the Activision Blizzard CEO has been criticised for receiving extraordinary pay packages. Corporate accountability organisation As You Sow’s annual list of “The 100 Most Overpaid CEOs” has regularly featured Kotick, who in 2021 was ranked at number 16 for his salary in excess of $30 million.
In June 2020, CtW called upon Activision Blizzard shareholders to vote against executive compensation packages at the company’s annual shareholder meeting, slamming Kotick’s annual equity grants in particular as having “consistently been larger than the total pay (the sum of base salary, annual bonus, and equity pay) of CEO peers at similar companies.”
The backlash to the Shareholder Value Creation Incentive follows news that Activision Blizzard is laying off nearly 190 employees, including 50 from its esports division.
