A shareholder group of Activision Blizzard has filed a statement to the US Government asking other Activision Blizzard shareholders to vote to deny the Management Pay on the company’s June 11 shareholder meeting because the CEO, Bobby Kotick, is making too much money per year.
The shareholder group, CtW Investment Groups’ director Dieter Waizenegger, said in a statement that the salary of Kotick is much higher than that of other CEOs in the same industry.
Kotick makes around $30 million per year, before an additional $20 million in stock equity options.
“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,” the note says. “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.”
Per the released statement, Kotick has made $96 million from stock equity options in the last four years alone, on top of his yearly average salary of $30 million, which is much higher than CEOs in the gaming industry and in the entertainment industry.
“Specifically, over the past four years, Kotick has received $96.5 million cumulatively in combined stock/option awards alone,” he said. “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.”
The shareholder group says that the high pay is “problematic” and is asking other shareholders to vote no on the motion to keep the pay at that level in the next shareholder meeting on June 11, 2020.
An Activision Blizzard spokesperson issued a statement to GameSpot defending the CEO’s pay, saying that he has lifted the company from a value of just $10 million to $53 billion during his tenure of CEO.
“During Mr. Kotick’s tenure–which is the longest of any CEO of a public technology company–Activision Blizzard’s market capitalization has increased from less than $10 million to over $53 billion dollars,” reads a line from the statement. “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%.”