CEO Bobby Kotick has been around the news for his leadership practices and inflated salary, especially back 2019. Throughout that time, Activision Blizzard laid off more than 800 employees despite a profitable year, and then own it revealed that Kotick's salary came in at $30 million. Since that time, more layoffs have occurred and big names at Blizzard have already been shifting to pursue other ventures. Hawaii of Blizzard following its absorption into the Activision Blizzard umbrella is a constant source of scrutiny in the gaming community, especially when it comes to Kotick and his extravagant salary. Now, the CEO has decided to a 50 percent bonus reduction and a salary cut moving forward, as well as several other key changes that could be a positive step for the people at Blizzard.
The move found light when a part of the extension agreement filed with the SEC went public (via WoWhead). In the documentation, it was revealed that Kotick both agreed to slashing his salary and cutting his bonus by 50 percent. In addition to the pay changes, he also decided to terminate the Transformation Transaction Award and the Shareholder Value Creation incentives.
According to the SEC filing, "Under the Extension Amendment, effective January 1, 2021, the Compensation Committee and CEO agreed to reduce his contractually agreed-upon base salary by 50 percent to align with targets established at the bottom 25th percentile of the business's peer group, despite the Company's strong relative performance."
The bottom salary for the executive has been slashed from $1,750,000 to $875,000 on an annual basis. The 50 percent bonus reduction also offers a ceiling of $1,750,000 for each fiscal year, both for 2021 and for 2022. The moves made with the CEO's reductions derive from feedback from shareholders after a steady incline of concerns from the games industry, both on the consumer and the business side.
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ACTIVISION BLIZZARD
CEO Bobby Kotick has been in the headlines for his leadership practices and inflated salary, especially back in 2019. Throughout that time, Activision Blizzard let go a lot more than 800 employees despite a profitable year, and then have it revealed that Kotick's salary came in at $30 million. Since that time, more layoffs have occurred and big names at Blizzard have been shifting to pursue other ventures. Hawaii of Blizzard after its absorption in to the Activision Blizzard umbrella has been a constant way to obtain scrutiny in the gaming community, especially in regards to Kotick and his extravagant salary. Now, the CEO has decided to a 50 percent bonus reduction and a salary cut moving forward, besides several other key changes that could be a positive step for the people at Blizzard.
The move came to light when a part of the extension agreement filed with the SEC went public (via WoWhead). In the documentation, it had been revealed that Kotick both decided to slashing his salary and cutting his bonus by 50 percent. In addition to the pay changes, he also agreed to terminate the Transformation Transaction Award and the Shareholder Value Creation incentives.
According to the SEC filing, "Under the Extension Amendment, effective January 1, 2021, the Compensation Committee and CEO agreed to reduce his contractually agreed-upon base salary by 50 percent to align with targets established at the bottom 25th percentile of the business's peer group, despite the Company's strong relative performance."
bobby kotick for the executive has been slashed from $1,750,000 to $875,000 on an annual basis. The 50 percent bonus reduction also offers a ceiling of $1,750,000 for each fiscal year, both for 2021 and for 2022. The moves made out of the CEO's reductions are based on feedback from shareholders following a steady incline of concerns from the games industry, both on the buyer and the business side.
The CEO?s potential maximum Annual Bonus through the Employment Period, as defined in the Extension Amendment, was based on the median multiplier for target annual bonuses of ceos within the Company?s peer group. Therefore, the CEO?s target Annual Bonus is significantly less than the median target annual bonus of the Company?s peer group because the CEO? bobby kotick is in underneath quartile of the average base salary earned by ceos of peer companies while his maximum bonus payout as a share of his salary reaches the median. The Annual Bonus will be based eighty percent (80%) on the attainment of Company non-GAAP financial objectives (the ?Financial Metrics?) and twenty percent (20%) on the achievement of objective and measurable Environmental, Social, and Governance (?ESG?) initiatives for the fiscal year regarding that your Annual Bonus accrues, in each case, as established by the Compensation Committee.
Back in 2017, Kotick netted $28,698,375 even after a pay cut, which is around 300 times a lot more than the average employee. While a massive pay increase is nothing normal for an individual in a CEO position, eliminating 800 employees only to immediately turn around and say, "Just kidding, we need 2,000 more to fill those spots" isn't normal. At least, it shouldn't be. Seeing this new agreement is a positive first step, but one of many that must be made to ensure the integrity of Blizzard and to start the long road ahead of reparative actions carrying out a declining public perception round the work culture.
You will see another earnings call with stakeholders on May 4 to discuss another steps for the brand and what's coming for Activision Blizzard and all of the properties under that name.
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