Activision Blizzard CEO Bobby Kotick's Pay 'Problematic,' Say Activist Shareholders

Activision Blizzard ATVI has come under fire from shareholders who are arguing that CEO Bobby Kotick's pay is too high.

Activist shareholders have recommended a vote to deny the management pay package on June 11, according to SEC filings.

The recommendation was supported by the CtW Investment Group, which said Kotick is earning much more than other CEOs in the same industry. Reports reveal that Kotick makes around $30 million per year, with an additional $20 million in stock equity options. The shareholder group said the high pay is "problematic."

Activsion CEO Pay 'Of Special Concern' After Layoffs, Says Activist Investor

"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," CtW Investment Group's statement said. 

"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."

Kotick has made $96 million from stock equity options in the last four years, CtW Investment Group Director Dieter Waizenegger said in a statement. 

"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."

Kotick Took Activision From $10M To $53B Market Cap, Company Says 

Activision Blizzard has spoken out in support of the CEO's compensation.

"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," a spokesperson told Gamespot

"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%. Over 90% of Mr. Kotick’s proxy reported compensation is performance-based, and he has delivered exceptional value for Activision Blizzard’s stockholders. Our equity dilution rates remain among the lowest of our peer group."

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