Activision Defends CEO's Staggering Salary Amid Calls For It To Be Lowered
As one of the highest paid members of the entertainment industry, Activision Blizzard's CEO Bobby Kotick is by no means scraping by.
In fact, the 57-year-old managed to tuck away $30.1 million in 2019 alone (via Hollywood Reporter) which I'm sure we can all agree is a pretty sizeable chunk of change. But it is actually a pay decrease on what he earned in 2018. Staggering.
Naturally, some people think this is a mite too much wealth for one mortal being alone to wield. Unfortunately for Kotick, it happens to be one of Activision's shareholders, The CtW Investment Group, who have called on other investors to vote against the games publisher having freedom to pay Kotick such a high wage.
The director of The CtW Investment Group, Dieter Waizenegger, called on other shareholders to vote against the "Say-on-Pay" proposal during Activision's upcoming annual meeting on June 11th, in a filing with the United States government.
The notes on the filing say: "Despite repeated low approval votes from shareholders, Activision Blizzard maintains multiple, overlapping opportunities for its CEO to earn outsize equity awards, even when performance-related vesting thresholds have not been met."
It continues: "Despite failing to disclose pertinent information on performance targets for its Short Term Incentive Plan, Activision Blizzard's proxy statement reveals significant human capital management challenges."
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But that's not all - the note also alleges that Kotick earns more than $20 million a year (for the past four years) for stock/option equity alone, before his annual salary.
This makes Bobby Kotick not only the highest-earning CEO amongst his video game industry contemporaries, but one of the highest paid people in the entire entertainment industry. When you couple this with the fact that Activision Blizzard controversially laid off over 800 employees in 2019 after a record-high year, you need to start asking serious questions about the distribution of wealth in the company.
"Specifically, over the past four years, Kotick has received $96.5 million cumulatively in combined stock/option awards alone," Waizenegger continues in the filing note. "In just 2019, he received over $28 million in combined equity, primarily consisting of options (over $20 million) that are substantially 'in the money'. While equity grants that exceed the total pay of peer companies would be objectionable in most circumstances, it is of special concern in this case because Activision Blizzard employees face job insecurity following layoffs of 800 employees in 2019, and typically earn less than 1/3 of 1% 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."
For their part, Activision has responded, suggesting that Kotick's salary and bonuses are well earned. A spokesperson for the company said: "During Mr. Kotick's tenure - which is the longest of any CEO of a public technology company - Activision Blizzard's market capitalisation has increased from less than $10 million to over $53 billion dollars.
"In the last five years, Activision Blizzard's share price has outperformed the S&P 500 by more than 120% and over the past 20 years, under Mr. Kotick's leadership, Activision Blizzard's share price has outperformed the S&P 500 by over 11,000%."
No word on whether or not this 'Activision spokesperson' was actually Bobby Kotick wearing fake glasses and a moustache, but it's fair to say they won't be backing down without serious opposition from the rest of their shareholders any time soon.
Featured Image Credit: Activision Blizzard